The alternative to the “Great Resignation” — phased retirement
Challenges to the supply and growth of today’s and tomorrow’s workforce are mounting everywhere. The slogan “Great Resignation” describes millions of people fleeing their jobs due to mistreatment, low pay, limited childcare or poor development. Scary reports abound of historically low and plummeting birth rates and the end of the traditionally important immigration flows to fuel our growing economy.
Calming labor market turbulence
Now also comes the recognition that hidden in this massive COVID-inspired unrest is the unexpected and highly unusual early retirement of millions of aging workers. Washington Post columnist Helaine Olen observed, “Goldman Sachs estimated last fall that more than half of those who left the workforce during the great quitting of the COVID era were over the age of 55.”
“However, many older employees say they would like to stay in touch with their jobs in retirement, but fear they won’t be able to. In a recent survey conducted by the Harris Poll… a large majority of respondents expressed interest in semi-retirement, where they could either work flexible hours, reduce their hours, or consult – but only one employer on five offered such an option,” she said. added.
So, what new proposals are suggested to stem this dangerous wave of departure? Expert after expert is falling back on an outdated “solution” – the decades-old entrepreneur option that critics call “retire and rehire” with no benefits or other values of regular employment. But times have changed – and quite dramatically. This new systemic challenge requires bold, new and enriched solutions. While the old offerings have probably lost their luster, a relatively simple solution is at hand.
Enter phased retirement
Allow regular employees on benefits to reduce their full-time to reduced-time schedules on an agreed path can meet the employee’s desire for so-called semi-retirement and the employer’s need to retain the mature workforce and transfer essential knowledge to younger employees seeking development.
Phased retirement programs are not the idealistic stuff of HR think tanks, but business-beneficial initiatives that pioneering companies have implemented for years with great success. Successful programs have been operational for more than a decade at companies ranging from furniture makers Herman Miller and Steelcase to pharmaceutical giants Abbott and AbbVie.
A 2017 report by the US Government Accountability Office, “Phased Retirement Programs, While Uncommon, Offer Flexibility to Workers and Employers,” documents the feasibility and desirability of this approach to addressing the challenge of retaining older workers. . The report observed that “eight of nine employers surveyed by GAO said they were able to meet a variety of design and operational challenges and cited program benefits related to worker retention, knowledge transfer, transition to retirement and workforce planning.
Habit trumps innovation
If such an obvious solution is available, why is this option rarely mentioned or adopted? In my consulting firm’s experience, several factors have contributed to keeping this practice a well-hidden secret. An underlying and pervasive age bias, as well as the widely held – and short-sighted – assumption that older workers are simply too expensive for many companies to consider.
Additionally, myths abound about the complexity of these programs and the formidable legal barriers that make them nearly impossible to implement. These outdated assumptions are rooted in the challenges once posed by now virtually non-existent pension systems that required complex and costly overhaul. With the near extinction of pensions and the near universal adoption of 401ks, these problems and obstacles no longer exist.
But the simplest challenge – and the hardest to overcome – is the power of habit above all else. Simply put, the dominant view at the top is: We’re not doing this because we’ve never done this.
We have a great lesson of this principle in action with the recent mass adoption of remote working. This successful practice that had only been allowed sparingly to a small number of high-performing workers for decades was suddenly forced into employers by a once-a-century pandemic. COVID-19 and the survival imperative have accomplished in months what far-sighted advice could not. In a few months, the unusual became common sense.
Perhaps the strength of demographics, chronic labor shortages, and the need for an age-friendly workplace will combine to adopt practices that support a “longevity agenda.” Forward-thinking employers will consider:
- Ending the usual sell-by dates of 55, 60 or 65
- Provide flexible and robust schedules, including phased retirement initiatives
- Ensure career-long training and development, regardless of age
- Strengthen retirement and 401k options
- Add personalized and ongoing financial wellness advice to benefits
However, employers seek to pursue this valuable source of mature and reliable manpower, failure to do so would be a grave mistake. Creativity and determination in this effort will be amply rewarded. There’s no reason 2022 shouldn’t be the year phased retirement went from a rare success to an obvious solution to a service and chronic problem.
Paul Rupert is CEO of Rupert Organizational Design, has been a consultant on workforce recruitment and retention strategies for four decades. Its customers include hospital systems, healthcare organizations and large enterprises.