Flexible and Phased Retirement
Employers and advocates have merely talked about “phased retirement” for decades. Rather than enabling longtime contributors to ease into retirement, the last chapter of work has been marked by decades of mandatory termination or early buyouts. A common assumption: 65 is most people’s “sell-by date.”
There is a dramatic gap between what older workers want and employers offer. As the Boomer exodus continues and labor markets tighten, change is inevitable. The retirement model is broken and transformation is essential.
- U.S. Department of Labor: Workers 55-and-older are fastest growing segment of the workforce
- “64% of workers age 18-64 envision a phased transition into retirement”
- Majority of employees age 50+ consider formal phased retirement “‘very” or “‘somewhat important’
- 27% of Americans plan to “keep working as long as possible”
- Another 12% say they don’t plan to retire at all
- In 2016,11% of companies offer “informal phased retirement”
- In 2016, 5% of companies offer “formal phased retirement”
- Just 21% of workers say employers enable reduced work hours, shift from full-time to part-time
Times have changed. People want and need to work longer. Proven talent is growing scarce. And knowledge workers are departing with valuable intellectual property. More flexible, creative approaches – Respectful Exits – are required.
Beyond 62 or 65 and out, employers and employees can collaborate on customized schedules that extend individual work lives and yield continuing contribution, knowledge capture and intensive mentoring.
Proven Phased Options Include
Benefits for Everyone
Traditional retirement has outlived its utility. Reinvented and customized to the unique needs of employers and their workforces, flexible and phased retirement can deliver substantial value to its pioneers.
Employers can gain:
- Retention of highly valued employees 55+
- Capture of unique, hard-to-replace knowledge
- Enhanced mentoring, development efforts
- Focus of pre-departure employees on high value work
- Reduced payroll costs
- Enhanced collaboration skills
Aging Workers can realize:
- Extended work life and income
- Enhanced pension contributions
- Continued engagement, contribution, and satisfaction
- Role in knowledge transfer, mentoring
- Healthy means of easing into retirement
Societal benefits can include:
- Continued contribution to the economy and inclusion in workforce growth
- Enhanced physical and mental health of those spared sudden termination
- The restoration of Recession-ravaged savings and reduced risk of poverty
- Continued employee contributions to Social Security and Medicare taxes
- A positive impact on pervasive age-based assumptions and discrimination
- Support for this “care-giving cohort” to privately assist their spouses and elders
The term “phased retirement” is used far too loosely to cover employer practices as diverse as one-off deals between a manager and a favored employee and the widely used strategy of “terminate/rehire” older workers as contractors. True phased retirement — what we call “Respectful Exits – means enabling a modified or reduced schedule as part of retiring from a full-time position. Our design of flexible and phased retirement programs assumes:
To achieve the goal of retention of valued employees beyond “retirement age,” we recommend to employers that:
- The options have to be diverse enough to appeal to a range of employee profiles
- Each phased retiree’s work needs to be systematically re-prioritized to align with reduced schedules
- A clear plan for knowledge transfer and mentoring has to be well-designed and executed
- Mutual Respect skills training is essential for maximization of the employee and manager experience
In exchange for employees meeting these requirements, a mutually beneficial and respectful approach will:
- Assure extended employment on a flexible and/or reduced schedule
- Provide prorated benefits with no negative impact on pension terms
- Encourage the elimination of low-value work and systematic engagement in mentoring
Do you want more information on Flexible and Phased Retirement?
Respectful Exits provides employees with the processes and tools to propose and implement Extended Work and Flexible & Phased Retirement solutions with our free web-based tool, ThePhazer™.
Employers can learn more about these options with live and online presentations by our Respectful Exits Advisory Team. Contact us for more information.