The Weil Perspective
Managing Successful Transitions from Work to Retirement
By James Weil, Managing Director – Successful Aging

If Paul Revere were alive today he'd be riding through corporate America shouting, “The retirements are coming! The retirements are coming!”

In just four years, the leading edge of the “baby boomers” will turn age 62, the average age of retirement for men. (The average age of retirement for women is 63.) Once this happens, every seven seconds another American will turn 62 and likely begin the transition to the next chapter of life.

There are two polar points of view of this phenomenon:

Unfortunately, the first paradigm remains dominant in many organizations but savvy employers are quickly embracing the new paradigm. Why? The facts tell the story quite compellingly.

On the employee (“supply”) side of the labor market equation:

		AARP surveys have shown that 69 percent of boomers plan to work in some capacity during their “retirement.”
		34 percent will work primarily for enjoyment, while only 19 percent will do so because they feel they need the money.
		75 percent want to pursue their dreams and learn something new in “retirement.”

This translates to a strong supply of experienced workers who are ready to engage in new challenges with excitement and enthusiasm. In contrast, how many younger workers are anxious to report to their jobs each morning?

On the employer (“demand”) side of the equation:

		The 79 million boomers will be followed by 45 million Generation Xers, which means a great reduction in the traditional labor pool.
		In this decade alone, the 25-44 year old population will decline by 4.3 million individuals while the 45-64 year old population will increase by 16 million.
		The U.S. Bureau of Labor Statistics projects that within the next seven years there will be a shortfall of 10 million workers in the United States.

So what's an employer to do? First, assess where your organization stands with regard to workforce demographics by answering the following questions. How do your employees break out by age and job type? Where are you most at risk of losing key older employees? What skills, institutional knowledge and crucial relationships will be lost if a large segment of your older workers retires? What planning must be done to pass along critical skills and knowledge? Do you need formal mentoring and succession management programs?

The next step for your organization should be to create a plan for transitioning employees into retirement. This plan should take both parties' needs into account. What does your organization want, need and value in terms of its workforce? What do your older workers want, need and value in terms of their future? Where are the gaps and what are the solutions?

For many organizations, phased retirement programs will be a logical and effective means to achieve a win-win solution. Employers get to retain key individuals longer than they might otherwise, and succession planning becomes considerably easier to implement. Ultratech, Inc., CIGNA, and Monsanto all have successful phased retirement programs in place that allow employees to move from full-time to part-time and temporary status. Naturally, there are a number of details that have to be ironed out to make these programs work (e.g., regulatory requirements of the IRS and ADEA) but they're worth the effort due to the extraordinary benefits they bring at a small cost.

One of the main benefits, of course, is that these employees can be used as a “contingent workforce.” After all, they know and understand the organization and how it works, they want to work, and they're a known quantity to management—all of which makes them a much better option than temporary workers from an agency. Proctor and Gamble and Eli Lily formed a “talent bank” of retirees to use for special projects. These programs are young but seem to be very successful for all parties.

Older workers also can be leveraged as ambassadors. For example, Sears uses retirees to help open new stores. Chevron Texaco Corporation retirees help with letter-writing campaigns and regulatory developments.

Indeed, “the retirements are coming” … and quickly. Plan now and you can reap the rewards later.