How should a phased retirement program be developed?

According to the Conference Board, the first step in developing a phased retirement program is to examine the organization's vulnerability or risk exposure as a result of retirements. Initially, this may be a high-level scan that looks at workforce numbers company-wide. Futher analysis needs to focus on selected, mission-critical jobs to assess strategic impacts and risk on a case-by-case basis.

After deciding to develop a phased retirement program, companies must ask themselves:

• What portion of the workforce is already retirement-eligible or will soon be and which business units, functions, job levels or jobs are most affected?

• What specific talent gaps will result and how long would they last?

• What kinds of firm-specific knowledge are at risk, such as an employee's relationship with key customers, knowledge of particular products, systems, etc.?

• Are there groups of people with specialized knowledge who will be hard to replace such as research scientists in pharmaceuticals or nurses in hospitals?

• What is the retirement risk for mission-critical or strategically important jobs?

• What is the retirement risk for individuals who are publicly associated with a brand?

Companies will also need to decide if phased retirement will be offered exclusively to retirees or also to active employees of a certain age or tenure; if all retirees will be eligible or only selected ones; and if the time-frame of the program is temporary or indefinite.

Organizations should also be aware of job variables that will affect phased retirement programs, including the:

• type of work;

• availability of talent supply;

• amount of interdependence with customers and co-workers;

• need for special equipment;

• amount of synchronicity needed with other tasks in the organization; and

• type of required knowledge.

Formal or informal program?According to the Conference Board, if an organization wants to promote phased retirement, a formal program is generally the best approach. Informal arrangements are a better choice when a company wants to offer phased retirement only to selected individuals, customize the arrangements or experiment. In the long term, if informal arrangements are offered to many employees, they can become increasingly difficult to manage, said the Conference Board.