The Wall Street Journal reports that "phased retirement programs - which allow workers nearing retirement age to cut back on their hours while keeping some pay and benefits - are growing in popularity … In a forthcoming survey of 1,736 HR executives world-wide from consultant Mercer LLC, about 38% say they offer phased retirement, more than double the 17.2% that did so before the pandemic.
"In the U.S. 23% of employers had these arrangements in 2021, up from 16% in 2016, according to the Society for Human Resources Management. A growing subset—8%, up from 6% in 2019—have introduced formal programs, which generally target older workers who meet certain criteria. Another 15% offer the option on an informal or ad hoc basis, frequently to employees in hard-to-fill roles."
Phased retirement programs seem to be gaining traction in part because during the pandemic, companies got used to the idea of flexible work schedules … and people nearing the retirement age found the whole concept to be attractive. At the same time, experts tell the Journal, developing formal phased retirement programs can help address the talent and brain drains that are affecting many industries.
It isn't always easy to create such programs because they can create legal and financial challenges for companies' HR departments. But Andrés Tapia, a senior partner at consulting firm Korn Ferry, says he encourages clients to add the programs to “find ways to leverage rather than lose that voice of experience.”
- KC's View:
This is a terrific idea, I think … especially when it comes to Baby Boomers who are not ready to stop working completely, but would like to find a gentle off ramp that will allow us to continue to contribute. There also will be people, especially now, who may find retirement less attractive because of the impact of inflation and the stock market declines that are affecting retirement funds.
Companies should be actively seeking out these people and reshaping policies to embrace their continued work and mentorship of younger folks.