With 10,000 baby boomers turning 65 each day, manufacturing, financial services and other companies increasingly are concerned about an exodus of their most experienced employees. Some are seeking ways to ensure that veterans pass along their knowledge to younger colleagues before they leave the workplace.
One solution is phased retirement. Employers offering this benefit allow older employees to work part time or on flexible schedules for several months or years before they choose to retire. Fourteen percent of U.S. companies are currently offering either a formal or informal phased retirement program, up from 10 percent in 2012, according to the Society for Human Resource Management.
More companies need to do this if they want to preserve their best practices, innovations and customer relations. It’s a choice many workers in their 60s welcome. Instead of ending long careers all at once, want to stay engaged but in new ways.
Growing numbers of older employees also can’t afford to stop working when they reach traditional retirement age and appreciate the chance to work part time. Fifty-nine percent of American households headed by people who are 65 and older currently have no retirement account assets, according to Federal Reserve data analyzed by the National Institute on Retirement Security.
At First Horizon National in Memphis, employees can reduce their work schedules to 20 to 30 hours weekly if their duties can be performed in that amount of time and they’re willing to mentor successors. They also must commit to staying on for one to three years. The extra cost of keeping these veterans on staff is worth it, top executives at First Horizon National say, because they’re helping to train a younger generation of workers and managers.
Steelcase, the office furniture maker, started offering phased retirement in 2012 when it realized it would soon face a tsunami of retiring baby boomers, especially in its IT department and manufacturing plants. Currently about 800 employees or 15 percent of Steelcase’s U.S. workforce, are eligible to retire based on years of service and age. So far, 47 have elected phased departures and more are expected to in coming years. Among them are Steelcase’s most skilled electrician at the company’s Grand Rapids, Mich., plant, who’s 65 and now putting in 30 hours over four work days every week, instead of his former six-day-a-week schedule.
Phased retirement arrangements require adjustments on the part of both workers and their bosses. Managers must organize part-time work schedules which fit their work flows. Veterans have to get used to not always being the “go-to” workers when problems arise, and to accept that the younger people they’re mentoring will inevitably make decisions and do work tasks differently than they do. As one older worker who’s doing phased retirement at Steelcase said, “it’s like being a parent letting go of a child and not resenting that.”
But the adjustments are worth making. At a time when companies are competing for the best talent, employers can’t afford to let their most experienced workers walk out the door the moment they celebrate their sixtieth or sixty-fifth birthdays.
See how many older Americans are still working: read more here.