The expected mass exodus of baby boomers from the workforce has been temporarily delayed due to the economic downturn, subsequent job losses, and retirees working longer to recoup depleted savings.  

More companies adopt phased retirement strategies to ease baby boomer "brain drain"

The expected mass exodus of baby boomers from the workforce has been temporarily delayed due to the economic downturn, subsequent job losses, and retirees working longer to recoup depleted savings. 

Still, employers will remain on alert once the economic recovery takes hold. A survey conducted by Baby Boomer Knowledge Center cites employers' concern about knowledge drain when the most experienced employees leave the workforce. Seventy-four percent voiced this concern, and 62 percent believe that the retirement of their older workers will have a negative impact on their organization's productivity. In addition, 43 percent feel that exiting boomers will result in a decline in workplace culture. 

To manage knowledge drain, many employers are considering introducing technology that will help transfer knowledge to younger employees, implementing part-time work programs to transition employees into retirement and offering pension benefits. 

According to survey results released in August by the HR consultancy and outsourcing firm Hewitt Associates, officials in more companies are considering phased retirement programs to address skills shortages and to help employees transition to an easier and more affordable retirement. Hewitt's survey of more than 140 midsize and large U.S. employers shows that: 

  • 61 percent have developed or will develop programs to retain targeted, near-retirement employees.
  • Just under half, 47 percent, have some type of phased retirement arrangement available.
  • Almost 40 percent expressed interest in establishing a phased retirement program in the future.
  • While just one in five respondents, 21 percent, say that phased retirement is critical to their company's HR strategy today, that number nearly triples to 61 percent when employers look ahead 5 years

"A tremendous amount of subject matter expertise and institutional knowledge reside within Ceridian's employee population," says Jen Menke, vice president of HR for Ceridian Quality & Operations. "Ceridian's HR planning process looks at organization structures and talent to make sure we are well positioned to execute our business strategy. Our goal is to leverage our processes around succession planning, knowledge transfer and mentoring to ensure that we are sharing and capturing information before employees retire," adds Menke. 

Ceridian's internal process regarding knowledge transfer is designed to "download" all the great knowledge the employee has in his or her head and document it so it's not lost when they decide to leave. 

"We identify those situations and give them a pre-work piece to complete, which prompts them to think through a series of questions," Menke explains. "There are eight questions on how they work and where they go for the input they need, plus a structured interview section with a facilitator to find out details on how they do their job." 

Ceridian has implemented some phased retirement plans, such as allowing retirees with 15 years of service to work part-time and be eligible for post retirement health insurance. In addition, retirees who terminate employment at age 65 are eligible to work up to 75 hours a month and still collect their pension. 

Older, wiser and working longer 
Many employees phase in and out of retirement. Some retire, then miss work so much that they return to full-time work for several more years. Others retire, then return to part-time work due to financial necessity, boredom or for other reasons. Most employers think that the baby boomers, the oldest of whom are just reaching retirement age, are going to stick around in the workforce a few years longer than their parents did. According to a new MetLife and Asset International survey of 240 companies with at least 1,000 employees, two thirds of employers (69 percent) say that within three to five years workers will retire at even older ages than they do today. The firms believe that their older workers will retire at an average age of 67 in 2014 -- about four years later than today's average retirement age of 63. 

Unfortunately, continuing to work at least full-time in a job of their choosing is an option more than 4 million aging boomers may have lost in the recession. Statistics show that the unemployment rate among 60- to 64-year-olds increased from 2.9 percent to 7.4 percent between February 2006 and February 2010. 

Whether retirees opt to work longer or choose phased retirement, it's important for companies to educate retirees about their retirement options. Ceridian Health & Productivity Solutions offers practical resources that employers can provide to their employees who are weighing the pros and cons of retiring, such as assessing the role of work, exploring options for reducing work hours or learning how to bridge the gap in health benefits. Whatever the life stage, Ceridian's Health & Productivity Solutions resources can help boost productivity and satisfaction among your employees. And Ceridian's Health Savings Account and Health Reimbursement Arrangement solutions also can offer tax-free savings options to better prepare your employees for retirement.