When retiring employees walk out the door for the last time, they often leave with more than fond memories. Many depart with vast amounts of “intellectual capital” — knowledge related to the organization and their jobs that no one else possesses.
Unfortunately, few employers take the time to “debrief” retiring employees before they exit. Many organizations are now rethinking this approach and turning to “phased retirement” arrangements to capture departing intellectual capital while helping older workers ease into their golden years.
Arrangements and advantages
The arrangements may involve, in the months or years leading up to retirement, transitioning to:
- A four-day work week,
- Working from home,
- A job-sharing agreement,
- Part-time status, or
- Serving as a consultant.
There are many potential advantages to these approaches to phased retirement. For example, they can help preserve key external relationships. People inherently dislike change; if a connection with a long-time employee is suddenly broken, customers or clients may take it as a sign to take their business elsewhere. An employee working under a phased retirement arrangement can serve as a “bridge” between him- or herself and the new person handling the account.
You can also delay or lower hiring and training expenses. Finding an ideal candidate, winning him or her over with a job offer, and teaching the new employee the “ins and outs” of the position could take months or even years — and many, many dollars. You can ease the pressure by keeping the soon-to-be retiree on staff and involved in the selection and training process. Meanwhile, the older worker may be working fewer hours and, therefore, drawing less in compensation.
Risks to consider
Of course, there are risks. If an employee on the brink of retirement has “checked out” or is disgruntled or bitter, he or she may not be invested in passing along accurate or thorough knowledge. In addition, you should consult an employment attorney about the laws regarding how selective you can be in offering phased retirement arrangements.
Many employers also may be concerned with older workers driving up health care costs. This is a risk to investigate when considering phased retirement arrangements. But bear in mind that, with advances in the medical field and an increased awareness of healthful lifestyles, many people are taking better care of themselves, so a spike in benefits costs may not occur.
Easier for everyone
Many employees look forward to retirement but, when it finally arrives, anxiety and stress can show up as well. Phased retirement arrangements can make a difficult time of change easier for workers and employers alike. Contact us for more information.