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Healthcare Workers Delaying Retirement

 |  By John Commins  
   May 25, 2011

The uncertainties around a sputtering economy have prompted the nation's healthcare workforce to delay retirement, a new study shows.

Research by The Conference Board shows that the healthcare industry experienced the largest decline in retirement rates among all workforce sectors in the U.S. economy. In 2009-2010, only 1.55% of full-time workers aged 55-64 retired within 12 months, compared with almost 4% in 2004-2007.

The study --U.S. Workers Delaying Retirement: What Businesses Can Learn from the Trends of Who, Where and Why-- found that healthcare workers are part of a larger trend among U.S. workers, who have retiring later since the mid 1990s – a trend that has been exacerbated by the recession and uneven recovery.

"Retirement rates declined significantly during and after the great recession," Gad Levanon, associate director of macroeconomic research at The Conference Board, and author of the report, said in a media release. "However, we see that delayed retirement has been more prevalent for some occupations and industries. For example, the healthcare industry experienced the largest decline in retirement rates in recent years. Jobs in this field are also in great demand. On the other hand, there was almost no retirement delay among government workers, who are more likely to receive defined benefit pension plans."

Nancy Jennings, a vice president of clinical operations at Chesapeake Regional Medical Center in Chesapeake, VA, told HealthLeaders Media she was not surprised by The Conference Board's findings.

"I probably have 90 people right now who could walk in right now and hand in their papers. They just can't afford to. They're worried about the economy and whether or not they can live off their retirement," she says. "Maybe the 401(k) took a hit, or the husband might not have a job, or their kids have moved back home because they're unemployed."

Even with the uncertainty, Jennings says, the aging demographic can't be denied. "And as the economy improves those people are going to slowly retire and leave the rest of us hanging," she says. "This has helped the nursing shortage, no doubt. Unfortunately, from an economic standpoint it hasn't helped anything else. As these folks retire it's just going to widen the gap. There is no way that the rest of us baby boomers are going to stay home and not seek health services, and there aren't enough nurses in the pipeline to manage the rest of us."

Marcia Donlon, a vice president/CNO at Holy Family Memorial Hospital told HealthLeaders Media it's the same story at the Manitowoc, WI-based hospital, where the average age of the nursing staff is 47. "A big piece is economic. But a lot of them love what they do," she says. "They're saying 'I don't want to give everything up. I would just like not such a hectic pace, maybe work four-hour shifts. Maybe do education for patients or staff, different types of roles.'"

Donlon says Holy Family is doing a lot of "role transitioning" for nurses on the cusp of retirement. "We have had some groups looking at, 'if you want to stay in the workforce, what would keep you here?' We don't want to lose those years of experience. We are looking at different roles and that has been well received," she says.

Some ideas that have surfaced include more flexible working hours, including four-hour shifts, seasonal work, or teams that allow veteran nurses with years of experience to coordinate patient care.

Donlon says she's even more concerned about a looming gap in nurse leadership. "It's very difficult to find nursing leaders. People are somewhat intimidated by it," she says. "I was talking to the dean of nursing at a nearby school and she said only 10% of nurses are interested in a leadership position. We have a lot of work to do there. As leaders, what are we modeling?"

The Conference Board also found several trends in the overall workforce:

  • The construction industry experienced a large decline in retirement rates. This is likely the result of a long slump in the industry, which resulted in many laid-off workers trying to stay in the labor force to make up for lost income.

  • There was no retirement delay among government workers. That is expected, since these workers are more likely to receive defined benefits, making them more insulated from the decline in financial asset values in their pensions.
  • Mature workers in high-paying occupations were much more likely to delay retirement than workers in low-paying ones. Those in higher-paying jobs tend to have higher financial expectations for their retirement years. Also, high-paying occupations tend to have limited physical requirements, making it easier to continue working. Among lower-paid workers, there is often an increased physical demand, and unemployment rates tend to be much higher. As a result, even if those workers wanted to continue working, finding replacement jobs is often extremely difficult, forcing them to retire.
  • Delayed retirement has affected the demographic distribution within the U.S. Part of the decline in net migration to states like Florida and Arizona is likely due to the trend of delayed retirement. Fewer individuals are leaving the labor force and moving to retirement destinations. 
  • Those who suffered from a significant decline in home or financial asset values, lost a job or experienced a compensation cut during the recession were much more likely to delay retirement. Workers in states where home prices suffered especially large slumps (such as California, Michigan, Florida, Arizona) were more likely to delay retirement.

"Overall, the macroeconomic implications of delaying retirement are largely positive," Levanon said. "Delayed retirement allows households to consume more today and reduce the probability of a prolonged slowdown in the U.S. economy, and enables households to reach retirement with more financial resources."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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