They envision a phased in retirement for their employees– one that allows you to gradually move from full-time to part-time and eventually say adios.
They don’t want to lose their experience, their know-how, and their loyalty.
They really do value older workers and are working on ways to get programs in place to let their workers ease gracefully into retirement.
Since people 55 and over will likely make up 25 percent of the workforce in this country by 2020, it’s a good idea to be sure.
So you can imagine my interest when this new survey landed in my inbox this morning.
The Society for Human Resource Management (SHRM) found that organizations are unprepared for an aging workforce, with just over one-third of organizations examining policies and practices to address the demographic change.
SHRM’s The Aging Workforce Survey found that an additional 20 percent of organizations had examined their workforce and determined that no changes in policies and practices were necessary.
The survey of HR professionals, part of a three-year national Aging Workforce Initiative by SHRM and the SHRM Foundation and funded by the Alfred P. Sloan Foundation, reported that one-half of survey respondents said they track the percentage of their workers eligible to retire within the next one to two years, and 10 percent of employees would be eligible within two years.
About one-half of HR professionals did not think the potential loss of talent during the next one to two years would have an impact on their industry or organization. But one-third thought it would be a problem or a crisis for their industry and organization in the next six to 10 years.
To be honest, I wasn’t all that shocked just somewhat disappointed. (I will show you more of these findings in a minute.)
For several years now, when I meet with business owners and corporate leaders, I hear over and over again that the plans are underway to retain older workers. It has begun to sound like a broken record and almost as if they’re saying what they think I want to hear or the world wants to hear. It’s politically correct in some fashion.
“Phased Retirement” sounds good, but…
Little wonder that “phased in retirement” is buzzy these days in human resource circles.
It certainly is appealing. The idea of phased in retirement lights up the eyes of an increasing number of older workers. They envision working into their sixth decade and beyond, but at reduced schedules that allow them some autonomy and freedom to not run at quite the Mach speed they once did.
Older workers generally want to stay in the game for the money and the health and retirement benefits.
As Eileen Ambrose writes this month in the AARP Bulletin, with a phased in retirement program, “workers gradually start clocking shorter work weeks. Ideally, this option keeps them in the workforce longer and prevents them from tapping savings and Social Security early, bettering their chances of not outliving their money.”
Trust me, when I speak to audiences around the county, I’ve seen the palpable fear in the eyes of workers who are unemployed post 50 and are worried about outrunning their savings.
And typically, the mental engagement and the social network that bubbles forth at work, too, drives a worker in this age cohort to yearn to hang in there as long as possible.
The basic human drive to be relevant and feel needed and appreciated is undeniable. Some people may pooh pooh that emotion. But let them stay home for a few months. Wait for it…they get depressed, bored, perhaps even anxious. They are miserable.
The reality of “Phased Retirement” right now
But few employers actually offer a phased in retirement program. For years, AARP has shined a light on firms that value older workers and offer these kinds of programs. For example, one of my favorites is Scripps Health, where employees can elect to participate in a formal phased retirement program. Full-time employees are eligible to move to part-time work on a permanent or temporary basis, and if you work 16-plus hours per week receive individual and family medical coverage and more.
The reason for not offering this kind of program I suspect is because it’s a pretty expensive perk to offer an employee-fewer hours and full benefits. Even fewer hours and some access to health and retirement plans for a period of time isn’t economically feasible for many small firms and nonprofits who aren’t likely to forget the tailspin that 2008 recession unleashed.
So I’m delighted when I read about efforts by employers to initiate phased retirement programs in their workplaces, particularly those that include a mentoring element as part of the deal. Passing knowledge between generations is a key component of the human existence. We all win.
The federal government is modeling how it can be done.
A new federal-employee phased retirement program began accepting applications last fall. Federal employees who take phased retirement will work 20 hours a week and receive half their pay and half their retirement annuity payout. A requirement: to devote 20 percent of their time mentoring other federal employees, who will probably take over the reins from them when they finally move on.
This will be a slow moving show though. As Chris Farrell, my respected colleague and author of the insightful new book Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community, and the Good Life, wrote in a PBS Next Avenue post, the Congressional Budget Office estimates that 1,000 workers will take advantage of the program initially, a small fraction of the federal government’s two million-person workforce.
Still, forecasts are that the phased retirement will become available for many federal near-retirees in 2015 and 2016 and “the impact could eventually be huge.”
The hope is that this program will be a model for private companies to add formal phased retirement initiatives to their benefits offerings.
Private sector examples to applaud
Farrell writes further about private sector efforts in his must-read book for all boomers. For example, at Herman Miller in Zeeland, Mich., where about a quarter of the company’s workforce is 55+, the company has instituted programs with built-in flexibility, he writes. Workers can take six to 12 consecutive weeks off during the year. They aren’t paid during that time, but keep their benefits and length of service toward their pension.
The firm also has a “flex retirement” plan, allowing an employee who’s 60 or over and has at least five years of service at the company to plan an exit over six months to two years. “The retirement decision is irreversible and, in return for the planned reduction in hours, the flex-retirement employee puts together a knowledge-transfer plan to teach the ropes of his or her job to a replacement, Farrell writes.
Another example from Farrell’s book is AGL Resources, a natural gas distribution company based in Atlanta, Ga., lets its retired workers return on a part-time or project basis and participate in company benefits, such as its 401(k) plan.
There are plenty of innovative ways to offer phased in retirement that I know can percolate up with some elbow grease, if employers are willing to put their muscle behind their mouth.
I am, for instance a big fan of the Encore Fellowships program offered via Encore.org, a nonprofit organization that’s building a movement to tap the skills and experience of those in midlife and beyond to improve communities, and wrote about how Intel is offering its retirees an innovative way to segue to work in a nonprofit while holding their hand via paid health benefits and an internship.
Two years ago, the company introduced the Intel Encore Career Fellowship — a program that pays a one-year, $25,000 stipend to help retiring employees transition into post-retirement careers with a nonprofit organization.
Read more about Intel’s program here via my “Retiring” column, As One Career Wraps Up, Finding That Next Role, in The New York Times.
When SHRM’s survey hit my desk this morning, it got me twitching. There is a genuine sense of denial afoot I fear. So I had to write about what companies are really up to when it comes to tackling the issue of an aging workforce.
What are you seeing in your workplace? Have you talked to your employer about offering a program? Would you be interested in one? Truly?
- Here are some of the rest of the findings:
Two-fifths of respondents indicated the increasing age of their workforce has not prompted changes in retention, recruiting, or general management policy practices. (Thumbs down)
- Two-thirds reported that their organization employed older workers who retired from other organizations or careers before joining their organization. (I like this one. Gold stars)
- Sixty-one percent of the 1,900 randomly selected SHRM HR professionals indicated their organization had attempted to capitalize on and incorporate the experience of older workers in recruitment and retention strategies. (Kudos to them.)
- The top advantages of older workers were more work experience (cited by 77 percent of respondents), being more mature/professional (71 percent) and having a stronger work ethic (70 percent). (But, of course.)
To paraphrase the quote from an old vaudeville sketch: Slowly they turn, step by step, inch by inch.
Follow me on Twitter, @KerryHannon
My latest book is What’s Next?: Finding Your Passion and Your Dream Job in Your Forties, Fifties and Beyond. I am also the author of Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy … And Pays the Bills (John Wiley & Sons), available at www.kerryhannon.com.