Phased retirement – answer to knowledge transfer and succession planning

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72% of pre-retirees over age 50 believe their ideal retirement will include paid employment – and plan to stay on the job, according to recent studies.  Concerns about retirement and the fact we’re living longer are two main reasons driving this trend.

RetireesWith older workers staying employed for longer, there’s less room for younger workers to advance.  All companies need both experienced and young employees to sustain the business into the future.  Phased retirement could be the answer.

Phased retirement: Win-win for employee & employer 

The concept of phased retirement is simple.  In a company with phased retirement, an employer lets workers shift to working part time.  This helps ease workers into the next period of life, while staying involved in their careers.  It also gives them a taste of what life is like with less income.

And companies benefit too.  Phased retirees can transfer their decades of knowledge to the younger generation, by mentoring them providing advice and insights.

Retirement patterns are changing… and so should our thinking

A recent report predicts one in six Americans will be older than 65 by 2020.

It’s costly to replace experienced workers – from $7,000 to $32,000, depending on the industry.  Businesses concerned about losing their top staff and specialised knowledge, or worried about not having enough employees, can benefit from phased retirement programs.

America is leading the phased retirement movement.  They have designed phased retirement to allow federal workers to ease their transition into retirement, while also helping their agencies get replacements up to speed.

Amy Jo Lauber, a financial planner in West Seneca, New York summed it up.

“One of the biggest challenges is where there’s a gap between expectation and reality.  You take a busy executive who has a successful career.  He’s looking forward to retirement, but when he finally does it, he finds it difficult.  He’s used to being useful.”

Retirement is no longer looked at as one event, but rather a slow transition out of the workforce.

Mentally and financially, phased retirement programs can be the bridge from full time work to full time retirement – with both sides benefiting.  You can design your own phased retirement to suit you company.

Talk to Wendy Perry, Head Workforce Planner, if you want help implementing phased retirement so you can utilise the knowledge and skills of your experienced workers, email wendy@wb.switchstartscale.com.au.

May 2016

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