November 27 2008 - Nearly one third of employers feel that phased
retirement programs are an important element of their HR strategies
over the next five years.
This is the main finding of a recent survey conducted by Hewitt
Associates, the global HR consulting and outsourcing company. The survey also
concludes that the impact of the present economic crisis on
retirement savings, together with Baby Boomers' increase in working past the retirement age
may make it easier to convince older employees to stay on the job.
John Tompkins, a senior benefits consultant with Hewitt said:
"Phased retirement programs allow employees nearing retirement to reduce
their work commitment, while still remaining active with the same employer. Older employees
are being offered reduced workdays/workweeks, job sharing and flex time, while
retirees may be rehired by their former employer as part-time employees or
consultants."
While 52.5% of the 171 respondents to the survey already had
formal and/or informal phased retirement programs in place, a further 33%
said that they did not currently offer phased retirement but were interested
in establishing a program. A survey conducted by Hewitt in the U.S. earlier this year
showed similar findings with almost a half (47%) of organizations currently offering phased retirement programs and
almost 40% planning to do so.
Linda Byron, a senior retirement consultant with Hewitt commented:
"The impending mass exodus of the Baby Boomers from the workforce has
employers concerned about the vast amount of knowledge and experience that
will leave with them. When we asked organizations for their primary reasons for
implementing these programs, they indicated their motives are to facilitate
the transfer of key skills and knowledge to less experienced employees, ease
the difficulty of replacing key skills, and have the opportunity to use
experienced employees in new roles or for special projects."
To create effective phased retirement programs, organizations should:
- Identify where departure of employees approaching retirement will
leave a skills shortage that is difficult to fill
- Determine the type of arrangement that would appeal to older employees
- Decide how they can accommodate phased retirement, while meeting
business objectives
"In many cases, employers that already offer flexible work arrangements
may not need to introduce special phased retirement programs for older
workers," Linda Byron observed.
At present, the most common phased retirement programs
offered by Canadian employers are:
- year-round, part-time employment (provided by 20% of organizations), and
- work on special projects (provided by 15%).
"For some older workers, the ability to continue to accrue savings will
be enough to keep them on the job - perhaps even full-time," added John Tompkins.
"However, financial considerations aside, employers realize that in order to
encourage near-retirement employees to continue working, they have to enable
them to make a valuable contribution to the success of the organization and
give them interesting, challenging work to do. They must focus on engaging
this group of employees, just as they do others in the organization."
