Is Retirement a Risk?
Feb 20, 2020

True story: back in the early 90s a major insurance company came under new ownership through a big merger. The new managers decided to do some house cleaning and offered very attractive early retirement packages far and wide to reduce headcount. Employees flocked to the offer. Problem solved, eh?

Well, one Monday, two weeks later, management discovered that all eighteen of the engineers and software technicians in one critical IT unit had retired on the same day. No one was left who knew how to manage the old beast of a system that had been programmed in machine language in the 60s. A major entry in the Oops Log.*

Our point, you ask? Have you looked at retirement in your organization as a serious risk issue? Have you coordinated with HR on managing critical skill replacement needs to avoid interruptions? A recent item in The Society of Human Resource Managers' HR Daily blog has the title "6 Coping Strategies When Your Best Workers Start Retiring". SHRM takes an HR professional approach to the question, but is this really just an HR matter? At what point does the impending retirement of key employees, people with unique skills and experience, potentially impact risk management?

Keep in mind that many of these key employees are also your company's primary point of contact with major customer or supplier universes. We know that succession planning is always a key risk concern in the C-Suite, but what about the next couple of layers down? The article lists six possible remediation/control steps that might also be critical to containing the potential risks:


Help them stay longer


Mesh the generations


Show them respect


Capture their knowledge


Remember the soft skills


Bring them back

And while you're at it, take a look at how many critical task areas may be single threaded. You've got one person on the brink of retirement who knows how to operate a mission critical machine or one person who understands compliance in a key regulatory area. Are these risk matters? Well, you can just wait until one of these folks retires with minimal notice and see what happens. Bonne chance.

*Several of the Gang of Eighteen, as we called them, were brought back in as consultants with nice hourly gigs while retaining their full retirement packages. Cost reduction, you say?


Where Did Everybody Go?

If parts of your company are not involved in manufacturing, logistics, hospitality, or one of the industrial categories that require employees to be on-site doing physical work, chances are that you now have some number of people, often in important capacities, who work primarily or entirely remotely - from home or from shared work facilities. Back when your faithful correspondent worked at a big mutual insurance company, working from home was reserved for End of the World snow days when the governor had actually declared an official state of emergency. Otherwise, your butt was in your desk chair.

Now remote working has become altogether familiar - maybe too familiar, according to an article in Forbes. Here's the point:


The process of going remote may seem as simple as sending an employee home with a laptop, but sustainable change management requires more preparation in order to minimize risk, prevent informational isolation, and ensure sustainability. At the top of the list is compliance.

The Forbes article introduces us to The Remote Work Association (TRWA)* which has published analyses of the risks involved in distributed/remote work architectures. The article notes: "If you're new to remote work, chances are, you haven't thought of most of them, which is a liability for yourself and your business." Even if you're not new to the subject, a refresher might not be amiss.

As a starter kit, here are the top ten items to consider in reducing/remediating the associated risks:


Worker classification (state regs are changing in this area)


Industry regulations (information security and licensure, for example)


Salary considerations


Local employment laws


Workplace safety (yes, worker's comp applies here as well)


Career development/supervision




Information security (unique remote issues)


Remote employment contract


Remote working policy (setting standards for all such employees).

All of this seems pretty obvious and it is - until something happens and you find it wasn't done or hadn't been updated since the Clinton administration. This is yet another area where risk and HR need to work hand in glove. Don't assume the other party has the ball.

*It's true. Every group other than serial killers has a professional association. TRWA has a lot of good information and resources. If your company is moving further into remote work, it can be a useful tool to help you manage the risks involved.

comic of a mostly empty cube farm, with one employee saying to another that it's either a flu outbreak or another round of layoffs

Or it could be another wave of teleworking. Or maybe retirements - see above.


Quick Take 1:
Another Look at the Future

The notable lack of flying cars in the sky outside my office is a salutary reminder that predicting the future, according to the great philosopher of commerce, Peter Drucker, is like trying to drive down a country road at night with no lights while looking out the back window.

Nevertheless, Allianz Partners has commissioned a report on the "Mobility of the Future" as part of "The World in 2040" futurology series. Since mobility is a major driver (pun intended) of risk, a quick look at the report's conclusions is not amiss. Here's one: the number of road deaths in developed countries will be close to zero due to autonomous vehicles and smart streets. Another: private cars will largely be replaced by car subscription services (Uber without a driver). And, of course, fossil fuels will be a quaint anachronism.

But - you knew this was coming, right? - cyber security systems built into vehicles and roads both will have to be defended against hackers, thus traffic police will be largely replaced by cyber security forces. (As in: "Please show me your URL, computer ID, and Source Address, please.") If vehicle operations are a significant part of your responsibilities, you might want to check out the report for ideas about the trends that are already underway.

a photoshop of a car with airline wings attached and a propellor off the back

Flying car in 1954. Premature, alas.


Quick Take 2:
Beyond Coffee

As we've noted before in these august pages, lack of sleep is a serious but often hidden risk factor, and never more so than when the sleep-deprived person is one of your drivers behind the wheel of an eighteen wheeler with a load of, oh, say, full propane tanks. But tech is here to help. A recent item in the New York Times outlines new developments in wearable tech that can mitigate this risk. Biometric sensors are getting lighter, cheaper, and more accurate, and new models may help warn drivers before they become too fatigued.

While driver facing cameras are being used by some to monitor for signs of fatigue and inattention, the new wearable technology monitors the drivers in a more subtle way, and comes in a variety of forms including caps, vests, wristbands, and eye wear. Several different companies are bringing a variety of devices and supporting systems to market. If drivers and trucks constitute a significant chunk of the risks you manage, check out these new offerings if you have not already.

Self-driving trucks are still years away, so "it's a good bet" companies will continue developing monitoring technologies for drivers, Dr. Levy (a Cornell University professor who is writing a book on truckers and technology) said. "We're going to need an alert human for the foreseeable future." Having some of those alert humans does seem like a good idea.

A man cuddling with a teddy bear with a hat pulled over his head, sleeping in the space above a truck

Sleep here, not behind the wheel.


Say It Isn't So...

Every risk maven needs to know this. Recent research by a software security firm (CheckPoint) has discovered that your home security can be breached through a smart light globe! Yes indeed. The Phillips Hue globe uses the ZigBee protocol. When embedded in your home system, this becomes a point of entry for all of your connected devices. What? You say you use Hue bulbs in your office prestige areas? Katy, bar the door!


Words to Remember

From George Washington's Farewell Address:
"Every day the increasing weight of years admonishes me more and more,
that the shade of retirement is as necessary to me as it will be welcome."


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