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June 11, 2022, 8:10 a.m. EDT

‘I needed something to do’: How working in retirement is being embraced by older adults and companies

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By Richard Eisenberg

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At Colorado’s arc Thrift Stores, more than 10% of the 1,600 employees are 65 or older. That’s intentional, says the nonprofit’s CEO Lloyd Lewis, who says he has “a real bias toward experience.” Older workers, Lewis says, “value hard work. They show up on time. They help increase morale across the company.” 

Lewis also thinks employees tend to get better with age. “I’m in my 17th year [at arc Thrift Stores]. I am much better at what I do in year 17 than I was when I started,” he notes.

Like many advocates for older workers, Lewis believes popular assumptions about them — they’re unproductive, they’re technophobes — are myths. “Older workers, on average, are probably more productive because of their experience,” he says. “They’re very committed.”

As for not being digitally savvy, gerontologist Tracey Gendron writes in her new book “Ageism Unmasked” that “countless surveys show that most older people use the internet and are more digitally connected than ever before.” Notes Hannon: “We’re not digital natives, but we’re pretty close.”

One factor behind the growth in letting people work part time in retirement: The Great Resignation, which some labor market analysts dub “The Great Rethink” or “The Great Reshuffle.”

Loads of older workers have been re-evaluating how they want to work, how much they want to work and where they want to work. 

Others who are younger say they expect to follow suit, according to a January 2022 Harris Poll for Express Employment Professionals . In that survey, most employees said they’d be interested in a semi-retirement, either through a flexible work schedule, transitioning to a consulting role or working reduced hours with reduced benefits. (Just one in five of their employers offers a semi-retirement option, however.)

Center for Retirement Research at Boston College researchers estimate that 300,000 more of the nation’s 15 million retirees aged 50 to 70 could return to the workforce than typically would during an economic recovery. 

“We expect to see some more workers coming back than we normally would see,” says Geoffrey Sanzenbacher, a Boston College professor and research fellow at the Center.

Popular programs for retirees who want to work

The quest for flexible work and semi-retirement explains why two benefits programs at Principal Financial Group have become so popular of late with employees of the financial services company based in Des Moines, Iowa.

One is a phased retirement program known as the “easy ramp into retirement,” which lets Principal employees aged 57 and older with a minimum of 10 years of service glide from full-time jobs to part-time work. The other is a “boomerang” program that lets Principal retirees come back to work part-time for the company after at least six months of retirement. Principal retirees who agree to work 20 or more hours a week remain eligible for its health and retirement benefits.

“We see the retiree segment of our population as an incredibly important part of our overall talent strategy, especially now when you look at the talent dynamics that are happening in the marketplace,” says Jon Couture, senior vice president and chief human resources officer at Principal Financial Group /zigman2/quotes/201030797/composite PFG +2.61% .

Couture notes that his human resources team and managers are holding more conversations with older employees interested in retiring and asking them “What are you trying to achieve in this next phase of your life? Could you imagine a different work schedule that allows you to do all the things you want to do — have way more time and flexibility, but not completely decouple from work?”

Couture recently had that conversation with a Principal executive who’d announced plans to retire. “He definitely doesn’t want to carry the same type of workload that he had in the past,” says Couture. 

They’re working out an arrangement so the soon-to-be retired employee will get to do the work he wants to do without having to do a lot of the work he doesn’t want to do. “I’m confident we’re going to be able to work something out that makes sense for him and makes sense for us,” says Couture.

Lewis recently had a similar talk with an arc Thrift Stores employee who just turned 65 and had worked there 16 years. “I was able to make a flexible adjustment in his schedule going from five days a week to three and I’ve told him he can take as much time off as he’d like,” Lewis says.

Although only 8% of U.S. employers offer formal phased retirement programs open to all employees who meet specified criteria, according to SHRM (the Society for Human Resource Management), that’s up from 6% in 2019. SAP North America, and Owens Corning are adding or considering formal phased retirement programs, according to a report in The Wall Street Journal. 

Far more common, and also growing, are informal phased retirement programs available on an ad hoc basis, at the discretion of the employer. Employees must ask for them. SHRM says 23% of U.S. employers now offer informal phased retirement programs, up from 16% in 2016.

Companies such as pharmaceutical manufacturers AbbVie /zigman2/quotes/202428675/composite ABBV +0.37% and Abbott Laboratories /zigman2/quotes/203724446/composite ABT +0.90% , office furniture maker Herman Miller, building and construction-materials firm Owens Corning /zigman2/quotes/202113551/composite OC +1.08% and the Scripps Health system have offered phased retirement for years. 

Microsoft’s /zigman2/quotes/207732364/composite MSFT +1.70% chief human resource officer Kathleen Hogan says benefits remain largely the same for her company’s employees who downshift from full time to part time.

Why do employers prefer ad hoc phased retirement programs to broad-based formal ones? Partly, to avoid potential complexities with benefits rules. Also, says Boston College’s Sanzenbacher: “My guess would be that there is a fear of getting the wrong kind of people to stay” with a program available to all employees of a certain age and tenure. 

He notes that some employees grabbing a formal phased retirement benefit might do so because they need the money, not because they want to continue working. Adds Driver: “We have to be frank and say that there are some older adults whose performance does decline.”

The hot job market is leading some retirees to use their leverage and negotiate re-entering the workforce on their own terms.  

Peter (he prefers not to reveal his last name), retired from his Seattle engineering job at 60 in 2019, but has since decided to look for contract work. A hiring manager at one company he spoke with asked him to work there full-time, but when Peter said he preferred a contract position, he was told: “We’re not really looking at doing that right now.” Peter’s response: “OK, well get back to me when you are.’”

His view of this experience: “I don’t want to sound arrogant, and I appreciate the position that I’m in — that I can have a choice and I can choose to spend more time doing things I want versus working full time.”

AARP’s Weinstock says she’s hearing about employers eager to work with older job applicants and figure out what works. Determining how to let older employees switch to part-time work with fewer responsibilities in retirement means an extra lift for managers already dealing with hybrid work and pandemic rules.

“If you have two part-time employees instead of one full-time employee, you’re doing a little bit more work on the management side of the street,” says Burrows at JFS of Colorado. “I won’t sugarcoat it; it’s challenging to make sure that we can get those puzzle pieces put together.”

Finding retirees who want to work part time can also necessitate revising job postings to attract them, notes the University of Iowa’s Kaskie, who’s leading a team to help Colorado employers hire and keep older workers. 

One landscaper told Kaskie that older workers were his best workers and he needed more of them. Kaskie told him to say explicitly that the job didn’t require heavy lifting and would let them get at least 5,000 steps a day. “That’s going to get a guy like me going,” Kaskie noted.

Organizations can do much more for “late career rejuvenation,” giving people “a change of pace and a chance to be more fulfilled,” says “What Retirees Want” co-author Robert Morison. “That’s the missing piece in most organizations — encouraging the retiree or the pre-retiree to stay around longer.”

American Transmission Company (ATC), in Waukesha, Wisc., has been doing just that since 2019, with its annual one-day program called The ATC Retiree Experience. The company first targeted employees 60 and older, plus their spouses, and invited ATC executives to attend. After the first program’s success, ATC broadened the event to employees 55+; it plans to invite all 555 workers in 2023. 

Lori Steckert Casetta, ATC’s manager of total rewards, said the company launched the program after hearing employees say they weren’t sure how to transition to retirement. 

“The more we heard that, we thought: ‘Let’s make that transition into their next phase of life as positive of an experience as them entering our organization,” she says. 

The company’s HR team uses the event to explain work options for its retirees including its fixed-term assignments that come with insurance and 401(k) benefits. Says Casetta: “If there’s a way we can encourage employees to stay on in some fashion, we absolutely talk about that.” 

/zigman2/quotes/201030797/composite
US : U.S.: Nasdaq
$ 79.51
+2.02 +2.61%
Volume: 1.62M
Aug. 12, 2022 4:00p
P/E Ratio
4.84
Dividend Yield
3.22%
Market Cap
$20.09 billion
Rev. per Employee
$929,220
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/zigman2/quotes/202428675/composite
US : U.S.: NYSE
$ 142.60
+0.52 +0.37%
Volume: 5.21M
Aug. 12, 2022 4:03p
P/E Ratio
20.18
Dividend Yield
3.96%
Market Cap
$252.13 billion
Rev. per Employee
$1.15M
loading...
/zigman2/quotes/203724446/composite
US : U.S.: NYSE
$ 111.48
+0.99 +0.90%
Volume: 2.81M
Aug. 12, 2022 4:04p
P/E Ratio
23.26
Dividend Yield
1.69%
Market Cap
$195.23 billion
Rev. per Employee
$403,080
loading...
/zigman2/quotes/202113551/composite
US : U.S.: NYSE
$ 91.19
+0.97 +1.08%
Volume: 449,776
Aug. 12, 2022 4:00p
P/E Ratio
8.10
Dividend Yield
1.54%
Market Cap
$8.78 billion
Rev. per Employee
$464,550
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 291.91
+4.89 +1.70%
Volume: 22.62M
Aug. 12, 2022 4:00p
P/E Ratio
30.27
Dividend Yield
0.85%
Market Cap
$2177.03 billion
Rev. per Employee
$897,149
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