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Key points
- Economies are feeling the impact of increased early retirement by people aged over 50.
- Our professional identity is often defined by what we do. As we start counting down towards retirement, that identity becomes less focused.
- A failure to replenish our networks in middle age affects us, as the key people we rely on start to retire themselves.
- As our networks retire and younger generations join the workforce, older workers can become isolated and lose their sense of identity.
Last month the UK government introduced changes to the cap on pension value for tax benefits. It was a move designed to encourage the over-50s who had retired early to come back into the workforce, particularly in industries that are suffering, such as medicine.
The impact of over-50s leaving the workforce early has been felt in many countries. According to a recent report by The House of Lords’ Economic Affairs Committee, economic inactivity has increased by 565,000 people since the start of the pandemic, and the biggest contributor to this change has been an increase in early retirement.
There are a range of factors for this, many are retiring early because they want and are able to, but many are either involuntarily out of work or want to get back into the workforce having discovered that they are not ready to end their working life just yet.
John Niland, author of The Self-Worth Safari, has suggested one factor for this exodus from the workforce: a failure to nurture connections, which can leave people retired by default. His work on professional identity looks at how people value themselves in life and in work.
Niland explains, “Professional identity is who we are, not just what we do. And of course, for a long time, people have got their identity from their work. So when you say I am a lawyer, or I am an accountant, or I am a consultant, that was much more than a job. But the pandemic fast-forwarded the questioning that was going on beforehand, so now there are many people who are counting down the years towards retirement. And very often that process starts somewhere in their 40s.”
Niland argues that, once people start counting down towards retirement, they mentally begin checking out of further development. And that includes not focusing any more on building their networks. If you have an established network of people you’ve known for many years and who have always given you the support, insights, and opportunities you have needed, and you set your sights on the end of your career, you stop seeing the need to replenish the existing relationships with new ones.
That can have unintended consequences. “Suddenly, one by one, and often within about 12 to 18 months, the dominoes start falling. Those five to ten key people start retiring themselves or become victims of the latest reorganisation, or just move on and decide to build a house in Spain and take it easy. And all of a sudden, the persons who imagined that the next ten years would look exactly like the last ten find their entire network has retired within 18 months of each other.”
Niland calls this phenomenon "precipitated retirement". People might have given health or other reasons for retirement, but, in fact, the real reason stems from disconnection: Having let their networks retire before them, they find themselves without that work identity or the relationships to help them to forge a new one.
Failure to develop new relationships doesn’t just leave people isolated, it leaves them unable to adapt to a changing environment or able to reintegrate into the workforce once they have left. Niland explains, “In Ireland, for example, we are now seeing a significant number of people who had retired trying to come back in. It’s not as easy as it looks, partly due to technology and other reasons, but actually more due to how it is that people communicate. Because, if you've stepped out of business-style communication for three years, the very language you're using may very well be making it hard for you to come back in.”
Such communication breakdown and the changes both in workplace demographics and working habits are going to have a long-term impact on people’s ability to reintegrate into the workforce and on their working identity. The last few decades have already seen a shift from working in one job for your whole career to multiple and portfolio careers. With longer lifespans and ageing populations, we are likely to see people work for much longer.
“If we’re going to have longer working lives, that means multiple careers. I don’t mean multiple jobs; I mean multiple careers," says Niland. "And if you have multiple careers, who are you across all of them? How do you get your equivalent of the 'I am a lawyer' statement when we’re in such a constant cycle of transition?
“A clear professional identity makes it possible for other people to open doors for us. If you are going to build your network, you first need to know who you are. That’s why professional identity is vital.”
References
House of Lords Economic Affairs Committee. 20th December 2022. Where Have All the Workers Gone? HL Paper 115.
Niland, John. (2019). 'The Self Worth Safari: Valuing Your Life and Your Work. VCO Academy.
