Companies Consider Impact of Upcoming Retirements

July 30, 2008 (PLANSPONSOR.com) - Employers facing an unprecedented talent shortage, with 25% of the workforce nearing retirement age, are considering the impact upcoming retirements on their organization.

According to a Hewitt Associates news release, its survey of more than 140 mid-size and large employers revealed more than half (55%) have already evaluated the impact potential retirements could have, and 61% say they have developed or will develop special programs to retain targeted, near-retirement employees.

While only 21% say phased retirement is critical to their human resources strategy today, that number nearly triples (61%) when employers look ahead five years. Almost half (47%) have some type of phased retirement arrangement available to employees, but only 5% have formalized those arrangements. However, 40% expressed an interest in establishing a formal phased retirement program in the future.

According to the news release, almost three-quarters of employers (72%) say retaining the experience, knowledge, and skills of older workers was the most important benefit to them in offering phased retirement programs. Other key employer benefits cited include easing the difficulty of replacing key skills (52%) and helping with transfer of key skills from experienced to inexperienced workers (50%).

A majority of employers (86%) say one of the largest benefits of a phased retirement program for near-retirement employees was the ability to gradually transition from the active workforce to retirement. Other benefits for workers cited include providing additional income to supplement their retirement income sources (67%) and/or providing workers with access to employer-subsidized health care (60%).