Normalizing Phased Retirement
Normalizing Phased Retirement
Rupert Organizational Design leads in the mobilization and engagement of our aging workforce. It has been a habit of employers for decades to treat workers 55 and older as approaching or already past a “sell-by” date. Denied ongoing training and the flexibility they need, in times of severe retrenchment and cost-cutting, longer tenured and higher salaried employees offer tempting targets for dismissal. Times have changed. Historically low birth rates, the end of limitless immigration and the persistence of basic and applied skill shortages have combined to make aging workers an invaluable cohort.
While surveys show 60% of 55+ workers want to continue working and ease into retirement, only 5% of employers offer such options. Our firm pioneered the mutually respectful Phased Retirement systems that add value in multiple ways: the retention of mature contributors on reduced schedules, the capture and transfer of vital knowledge, and the creation of long sought-after intergenerational development pathways. The mainstreaming of part-time schedules open up similar possibilities for other populations, while the defeat of age bias strengthens such success with other forms of discrimination. Our proven models and tools virtually eliminate the risk that discourages many employers from pursuing this option.
To explore the value and challenges of flexible and phased retirement, click on the colored panels below. To see some of the unique and proven forms of phased retirement that creative firms can apply, view the descriptions below.
Partial Reduction
A schedule reduction from 100% to 80% that lasts 1-2 years is the simplest version of Phasing Out. The duration can be set at other percentages and longer periods, such as 70% for 3-4 years or a mutually agreed-upon alternative.
Phased Reduction
This less common option offers reductions in annual increments such as 100-90-80-70% or a variation. This more flexible reduction process can fit the desire of many older workers to gradually adjust to retirement.
Full Flexibility
Retirement or the desire to phase out is often driven by the pressure to conform to traditional and unduly taxing ways of working. The combination of remote work, flextime and compressed schedules can offer a customized schedule that blends the goals of retention and eventual departure with a range of time commitments on a full- or part-time basis.
Collaborative Contracting
The option of converting from regular employee status to a contract position of varied lengths can supplement the formal phasing options if done with fair compensation to offset the cost of lost benefits.
This well-designed initiative retains key talent and transfers knowledge
Client Challenge
In the US, over 3,000 of biopharmaceutical AbbVie’s 29,000 employees were eligible to retire. Having spun off from parent company Abbott, it placed a premium on retention of its highly skilled, technically unique workforce and turned to a phased retirement program as part of its strategy.
Our Intervention
In the face of manager skepticism, we assisted in the development of a voluntary, manager-approved approach that included annual enrollment, a formal proposal process with a knowledge transfer and work redesign plan. We helped develop manager and employee communication tools that contributed to a smooth rollout.
Organizational Outcome
Participants in the program could reduce to 80% time, take an additional 5 weeks of vacation with a full-time schedule or reduce travel or supervisory responsibilities in their current positions. Benefits were prorated in all cases and pension benefits were kept intact. Over 300 AbbVie employees have participated in the program in the past 14 years and in internal surveys, managers and employees reported high levels of satisfaction.