Respectful Exits: Rethinking “Phased Retirement”

By Paul Rupert, Rupert and Company

We are in the midst of a great transition in the makeup of the American workforce. All (or most) eyes are on the influx of diverse and younger workers. They have sought and secured significant progress in telework, flextime and parental leave—practices near and dear to our hearts. These options are not available on a uniform basis, but in general the welcome mat is clearly out for newcomers.

It’s a different story for older workers. The primary flexibility they have sought for years remains as elusive as ever. Phased retirement has yet to be phased into most workplaces. In recent surveys, 64% of workers said they “looked forward to easing into retirement.” Only 5% of employers offer formal programs in this area. For older workers, the welcome mat has yet to be unrolled.

This is the state of things despite there beinga longstanding business case. The rare companies that have offered phased retirement cite retention of proven staff, transfer of key knowledge and substantial mentoring as values of the practice. Retirees appreciate a healthy transition to full retirement, an opportunity to remain engaged in meaningful work and the chance to increase earnings and pensions affected by the recession. Yet these gains have not proven sufficient to normalize phased retirement.

Why Has There Been So Little Progress in Reduced Schedules for Pre-Retirees?

Under-estimating older workers. A major barrier to phased retirement—or what we call Respectful Exits—is a deep ambivalence in companies about the general contribution of older workers. A variety of myths and generalizations undercut any willingness to extend the work life—and reduce the schedules—of these long-term contributors. Among the leading myths, along with a counter view:

  • They are more expensive (counter: but not if used at their highest value and on a reduced schedule/comp)
  • They are less productive (counter: in a diverse staff, this is best assessed individually)
  • They are resistant to change (counter: Again this varies from person to person and is rarely a group description)
  • They block the promotional path (counter: Mentoring in well-done Respectful Exits can enrich promotions)

Organizational barriers. In addition to assumptions that devalue older workers, there is a set of widely held beliefs about phased retirement itself that discourage its use. They include:

  • Pensions paralyze. Reconciling reduced schedules and salaries with full pension payouts has been successfully  addressed, but is a major challenge.
  • Fear of discrimination. Leaders worry that creating different paths to exits and saying “yes” to some and “no” to others may lead to dissatisfaction and, potentially, lawsuits
  • Seeing part-time as reduced value. A common belief exists that reduced schedules mean a net loss in contribution, especially as employees age
  • Manager overload. The assumption exists that many managers lack the skill and judgment to make challenging decisions and manage the outcomes
  • Limits of knowledge sharing. The transfer of unique knowledge from older workers is held out as a major gain, but it has often failed in practice

How Respectful Exits Can Break Through These Challenges

The first step in moving past the status quo on phased retirement is reframing and rebranding the practice. In conversations with many practitioners and advocates, two equally strong reactions occurred. People thought there was growing interest in the practice of offering diverse ways for older workers to depart. At the same time they found the term phased retirement outdated, imprecise and misleading.

We think of it as a “Rorschach phrase.” Hold up the ink blot and people will have a strong reaction to it—although there will be much confusion about what “it” is. For many it’s a practice that was considered and rejected more than once over the years. Another large group shows up in surveys as believing that a strategy of retire/rehire—or terminating and bringing back retirees as contractors—is phased retirement. For others the reigning assumptions are those outlined above—a combination of perceived older worker limitations and seemingly overwhelming organizational barriers.

The strategy of Respectful Exits is simple. Redefine this approach to retirement as a mutually beneficial and respectful negotiation of a better way of working. Recognize that a diverse workforce needs a variety of choices in ending careers. Engage forcefully the common objections regarding efficiency on reduced schedules and effective knowledge transfer with proven tools and best practices. Conduct strong advocacy publicly and within firms to set the record straight.

Defining a Menu for Truly Respectful Exits

For those of you who, like me, began advocacy and consulting on flexible work in the 1980s, the task is familiar. In the early days of encouraging a menu of telecommuting, job sharing and more, confronting and dispelling strong objections based in longstanding habits was a long-term process. The road ahead of us will be a challenging one, facilitated by definition of a clear menu of Respectful Exits:

  • Partial Exit. A schedule reduction from 100 to 80% that lasts 1-2 years is the most common form of “phased retirement.” Respectful Exits can be set at other percentages and longer periods, such as 70% for 3-4 years.
  • Phased Exit. This rarely used option sets a path from full employment to eventual retirement with reductions in annual increments such as 100-90-80-70% or a variation. It fits the desire to gradually adjust to retirement expressed by many older workers.
  • Gig Exit. With the so-called Gig economy gaining steam across organizations, it makes sense to place retired/rehired contract workers in this context. The respectful element of Respectful Exits comes into play with how Gig retirees are treated. The argument for partial benefits and other terms is already underway for the larger gig economy and should be considered here.
  • Mentoring. There are many forms of knowledge transfer, a major driver of Respectful Exits. It can be integrated into Partial or Phased Exit and include specific mentoring commitments. Or it can be a part of work redesign that allows a “new” full-time job – combining a reduction in old tasks with new responsibilities in mentoring.
  • Full Flexibility. Older workers are not thought of as needing flexibility. And yet the desire to retire is often driven by the pressure to conform to traditional and unduly taxing ways of working. Long-term agreements to work from home or use flextime and compressed schedules alone or in combination offer a transition that may constitute or lead to other forms of Respectful Exit.

Turning this Respectful Exits menu into a common set of options available to older workers is both a demanding and valuable undertaking. It will take the work of thousands to make Respectful Exits anywhere near as common as telework or flextime. Hopefully the membership of the 1 Million for Work Flexibility will rise to this challenge.

Originally published at 1 Million for Work Flexibility

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