The traditional notion of retirement--one day you're working, the next you're golfing, traveling and spending time with the grandchildren--doesn't cut it with a lot of people anymore. These days, many individuals want to keep working--at least part time--while they ease into retirement. And many employers would like to keep older workers on the payroll with a diminished workload, but they haven't found effective ways to help such employees stick around.
One possible solution is so-called phased retirement, a work arrangement that allows employees near retirement age to make a gradual transition to full retirement.
Laurie Barr, SPHR, employment manager at Oregon Health & Science University, an academic medical center in Portland, Ore., that offers phased retirement, says: "It's something every organization needs, to be flexible. Our workforce as a whole is aging. There are going to be more people retiring than are available to fill jobs."
Phased retirement offers pluses for employers and employees alike. Employers get to retain experienced workers--especially those with specialized or technical skills--who are hard to replace. And employees can stay engaged in work and earn income while getting a taste of the retiree's lifestyle.
Facing the Facts
Employee retention may not seem like a high priority given today's soft economy and recent mass layoffs, but employers must face the inevitable: As the population ages and baby boomers retire, there won't be enough workers to fill the gaps, HR experts say. Companies will have to find ways to shore up their staffs, and they'll have to adopt creative retention strategies.
"Some organizations will have huge drains if they don't do something," says Anna Rappaport, a Chicago-based principal of HR consulting firm William M. Mercer Inc.
Retaining older workers, in some capacity, will be key. Without programs like phased retirement, many companies will risk losing their most experienced workers.
Fortunately, older workers seem inclined to continue working. (See "Supply of Older Americans Demands Work," on page 54.) Last year, almost one-third of the 56.3 million Americans age 55 or older were in the labor force, according to the Bureau of Labor Statistics.
And that share will go even higher, if workers' expectations are any indication. Sixty-one percent of employees expect to work for pay after retiring, according to a survey report released earlier this year by the Washington, D.C.-based Employee Benefit Research Institute.
But many older employees who want to continue working don't want to do it full time. "More and more employees, when they think of retiring, think of it in a gradual way. It's no longer an on-off switch," says James Delaplane, vice president of retirement policy at …