Phased retirement allows staff to reduce their hours and/or level of responsibility rather than making an abrupt departure on retiring from their organisation. The employee gradually moves into retirement, whilst businesses are able to capitalise on their skills and corporate knowledge for longer. Offering your employees the option of a phased retirement should be considered a key retention strategy for valued employees nearing retirement.

• Benefits to employers
• Benefits to employees
• Tips for implementing and managing phased retirement

Benefits to employers

• Phased retirement can continue indefinitely and is a great way to capitalise on the skills and corporate knowledge of experienced workers.
• Providing additional time to ensure that the knowledge of your experienced workers is passed to other employees as part of your succession plan.
• Improved staff morale as your staff will know you value their experience and skills.

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Benefits to employees

• Phased retirement can assist valuable, skilled employees achieve a balance between work and other activities whilst preparing them for retirement.
• Allows staff time to share their knowledge with and support less experienced staff, possibly through a mentoring arrangement.
• Allows staff flexibility to balance personal responsibilities which can include caring, hobbies or volunteering, whilst still earning a wage.

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Tips for implementing and managing phased retirement

There are a number of ways for your employees to undertake a phased retirement, including:

• Redeployment to another role within your organisation, which can include becoming a mentor to less experienced employees or by offering training so they can be re-skilled to undertake a new role.

• Flexible working options are a great way to offer flexibility to employees considering a phased retirement, and can include part-time work, job sharing, flexible leave options and flexible working hours.

Remember to encourage your employees to review their superannuation and seek professional financial planning advice, as this may assist them to review their career and life aspirations and work out how they would like to approach their retirement.

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Maintain contact

Even after ‘officially’ retiring some mature age people continue working, often for their former employer. Employers can facilitate this by setting up:

• A Return to Work Pool, which is a listing of retirees who are available to work for their former employer as contractors.
• An Alumnus Club of all former staff to receive a regular newsletter. This opens up avenues for maintaining contact and conveying company information and social and work opportunities to ex-employees.

Wider opportunities

After retirement some workers have the capacity to perform periodic work for several businesses concurrently (this is sometimes called Portfolio Employment). These workers may be a good source of labour for small regular (eg monthly) tasks, to meet temporary workload increases, or for project work.

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Read more: Case Study: Phased Retirement