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Phased Retirement: A Work-Life Initiative
By Linde Harned

Much of the literature and discussion relating to phased retirement programs is focused on the organization’s needs — to retain key talent and knowledge. As the Baby Boomers are expected to retire in large numbers over the next five to 10 years, organizations are busy trying to find ways to keep them as active employees through part-time arrangements, job sharing, project assignments and more. 

Given this scenario, a look to “the other side” may create an opportunity to recast the issue and find a brighter outlook, or at least alternative solutions. 

The concept of Civic Engagement is being embraced by individuals and communities across the nation. There are endless opportunities to create meaningful experiences for Baby Boomers who may want to continue to work part time, but also want to learn and to give back to the community where they live. Communities are finding ways to tap into this experienced and valuable resource through pro-bono and even paid roles within small businesses and non-profits.

The Obstacles 
Historically, organizations have wrestled with restrictions inherent in their qualified retirement plans, which penalize individuals who want to work beyond normal retirement age. The economic crisis has caused significant reductions in retirement assets of many Baby Boomers. They want to retire, but many feel they must now hang in there another year or two to rebuild their nest egg. Also, from the individual retiree’s perspective, the challenges of finding and keeping health-care coverage in phased retirement (when not working as a “full-time” employee) are often overwhelming.

Why Phased Retirement as a Work-Life Solution Makes Sense
New opportunities to learn: Today’s Baby Boomers are not ready to stop learning, and many have built careers that lend themselves to continued learning and new life experiences.

Enhance the organization’s commitment to community: Business, especially now, needs to step up and do good in the communities where they operate and source employees.

More engaged employees are good: A phase retirement option that supports and encourages Baby Boomers to be involved in some form of civic engagement complements the concept of the work-life experience. Many Baby Boomers are staying in full-time jobs because they have to — the economics of full-time retirement are not feasible, and the reality of finding and purchasing health care as an individual is frightening. But, what if we could create a sense of future state for employees where they could blend their professional employment with a professional volunteer role or second career — an Encore Career. (1)  

One Possible Scenario  
Employees in certain key roles (those with skill sets and knowledge the organization wants to retain) who are approaching retirement age are offered a “transitional” retirement option. They can continue to be employed by the organization in an alternative work schedule option that meets their needs (part time, job share, compressed workweek, etc.) with assignments that retain the organization’s needed talent. In exchange, the individual employee has the opportunity to work part time in a meaningful civic engagement role. Think of the United Way Loaned Executive model.

The length of time and number of hours (per week or month) is determined by the three parties (the organization, the small business/nonprofit and the individual). Pay and benefit arrangements may vary and certainly must be financially feasible for the individual and the organization. It is likely that an ROI analysis could show that any incremental cost to the organization is offset by enhanced productivity because the organization has been able to retain Baby Boomer talent in critical roles. It’s good for the business, the community and for the individual.

The keys to successful phased retirement or encore career programs include:

• Flexible schedules for the individuals
• Meaningful assignments that utilize professional skills
• Measurable results for the organizations involved.

The original concept of phased retirement has been approached within the context of traditional retirement models; work for one or more organizations until you retire, then stop work and enjoy your well-earned retirement income. This new scenario is intended to offer an approach that encourages organizations to look to the work-life experience and to form strong partnerships with small business and nonprofits in their respective communities.

Reference notes:
IBM program – Transition to Teaching Initiative (engineers in second careers
as science/math teachers)

(1)  Encore Careers by Friedman
Civic Ventures
Experience Corp and Senior Corp programs
National Council on Aging Respectability Initiative

About the Author
Linde Harned is a seasoned HR consultant and past practitioner based in Scottsdale, Ariz. Her client engagements and work experience cover a broad spectrum of industries and are focused on designing and implementing pay and reward programs that align with the organization’s culture and drive business results.

Read the March 2010 edition of Benefits & Work-Life Focus.

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