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Phased Retirement: a Win-Win Strategy
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BY GLORIA DUNN VIOLIN
By 2030, more than 20 percent of U.S. residents are projected to be aged 65 and over, reports the U.S. Census Bureau. This expected avalanche of baby boomers seeking retirement will severely impact businesses, many of which continue employment policies that don't reflect this changing demographic. The most successful companies will be those that develop new policies to keep these seasoned and skilled workers. It is clear that there is presently no other way for businesses to compete in the marketplace if the workers who make it possible are gone.
Many employers are already experiencing a shortage of qualified workers. In fact, a third of employers expect staffing problems to continue in the coming years reports a 2016 Society for Human Resource Management survey. The report also shows that only fourteen percent of U.S. companies offered either a formal or informal phased retirement program this past year.
A phased retirement strategy often refers to a broad range of flexible arrangements, both informal practices and formal workplace policies. Within these parameters, employees approaching normal retirement age can reduce hours they work or work for their employers in a different capacity after retirement. It can include job sharing, telecommuting, consulting/contracting, flextime, part-time, or reduced workdays and weeks.
"There's a need for more companies to do this if they want to preserve their best practices, innovations, and customer relations," says Paul Irving, chairman of the Milken Institute Center for the Future of Aging. "And there's receptivity among older workers, a majority of whom want to stay engaged and keep working, but in new ways."
The value of keeping these seasoned workers is paramount in helping companies thrive. By providing potential retirees with a phased retirement option, organizations won't experience the sudden loss of needed skills. At the same time, the retiring employee won't feel the void of a major lifestyle change by losing a long career. It's a win-win for both.
Although many organizations are unprepared for an aging workforce, some companies are beginning to phase baby boomers into retirement by offering older workers part-time jobs and flexible schedules. One example comes from AP reporter Matt Sedensky, who told the story of David Warsen.
Warsen has refurbished hundreds of machines at Steelcase's Kentwood, Mich., plant. When a press stopped operating recently, the 39-year veteran and principal electrician at the office furniture maker diagnosed and fixed the problem in minutes. So his boss was relieved when Warsen, who turns 65 in February decided to take advantage of the company's phased retirement program rather than simply end his career.
Another example comes from Stanley Consultants, a global engineering firm in Muscatine, Iowa. The firm is among the U.S. employers that offer workers a softer landing into retirement, allowing them to scale back hours and move into part-time positions. Dale Sweere, Stanley's human resources director, noted that "phased retirement gives employees a way to maximize their retirement savings and [offers] the company a way to retain an experienced employee who often has built close ties with clients. It also slows costs and productivity losses tied to turnover, and responds to a desire from employees who want to remain engaged in work, just not as much."
Implementing appealing work arrangements that attract and retain workers 50 plus—who were one-third of the U.S. labor force in 2016—may become increasingly important in an organization's bid to survive in today's marketplace. At the same time, it's important to note that keeping older employees does not take away jobs from younger workers. "There's no evidence to support that increased employment by older people is going to hurt younger people in any way," said Alicia Munnell, director of the Center for Retirement Research and co-author with April Yanyuan Wu of Are Aging Baby Boomers Squeezing Young Workers Out of Jobs?
Economists say the macroeconomic view gives a clearer picture. Having older people active and productive actually benefits all age groups, and spurs the creation of more jobs. At the same time, experienced workers are able to mentor and train younger employees, and help them get on a faster track toward achievement and higher-level positions.
The projected labor and skills shortage poses a pressing need for change that employers need to plan for today. To keep prized, seasoned employees from leaving their jobs, companies need to institute policies and programs that attract and retain them. These workers need to know their employers want to accommodate them by involving them in customizing their "new jobs." The companies also need to offer attractive benefits, like profit sharing and healthcare.
"It's like maintenance on a piece of equipment: You can't just close your eyes to the problem and wait for it to break down," claims Steve Kempner, manager of skilled trades at Steelcase.
What is your company doing to ease the potential impact of unfilled jobs and declining productivity due to the loss of retiring employees?
The New Retirement: A Paradigm Shift is a recurring column by Gloria Dunn-Violin, whose new book ReVivement: Having a Life after Making a Living will be available March 1. 415-259-7090, www.havingalifenow.com. Gloria is a professional speaker, pre-retirement workshop leader, and a business consultant through her company, HAVING A LIFE After Making a Living. She has over 25 years experience in organizational behavior and development as a trainer, facilitator, consultant and coach. She also advises financial, insurance, and other businesses on how to provide their clients and employees with meaningful advice about aging and retirement; and consults with businesses on how to close workplace gaps caused by retirements.
By Gloria Dunn-Violin|2018-01-22T15:40:07-07:00March 16th, 2017|North Bay Business Journal|0 Comments
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