How Phased Retirement Is a Win-Win for Your Organization and Its People

Retirement isn’t the full-stop moment it used to be. Rather than leaving the workforce altogether, many Canadians now prefer a gradual shift that allows them to stay engaged, maintain supplemental income, and enjoy the benefits of ongoing social interaction at work. This trend - commonly referred to as “phased retirement” - is reshaping both employee expectations and employer responsibilities.

Why is Phased Retirement Gaining Traction?

We recently took a deep dive into this trend in our whitepaper, and the numbers are pretty eye-opening. We found that 16% of retirees are still working in some capacity. But here’s the kicker: for those who retired after 2020, that number jumps to nearly 25%! 

That tells us something big is going on. People want to stay engaged, and honestly, who can blame them? Many have financial reasons for wanting to keep earning, and let's not forget the social and emotional benefits of staying connected to the workplace.

Beyond the individual benefits, phased retirement allows you to retain the valuable expertise of your experienced team members. This creates opportunities for mentorship, knowledge sharing, and a more supportive work environment for everyone. These are the people who know your clients inside and out, who understand your processes, and who can hit the ground running. Plus, it’s a fantastic way to keep key client relationships strong and ensure you have continuity in those vital roles. 

“How do we make Phased Retirement work for our organization?”

As leaders, making phased retirement work for your organization starts with adjusting your HR policies to be more supportive and flexible.

1. Flexible Scheduling: Offering part-time or fractional schedules is a no-brainer. It allows our more senior team members to scale back their hours gradually, which is precisely what they’re looking for. And for the organization, it means you get to keep their expertise on board, even if it’s not full-time.
2. Redefining Roles: Think outside the box here. Can you create specialized roles that let your veterans focus on what they do best? Maybe someone steps out of a management position but stays on as a mentor or consultant. This way, you’re using their skills effectively and paving the way for knowledge transfer.
3. Benefits and Compensation: This is where you need to be clear and transparent. As people transition to part-time or contract roles, what happens to their benefits? Adjust your plans to accommodate these changes and communicate those adjustments clearly. This will ease any financial anxieties and help keep these valued team members on board.
4. Knowledge Transfer: Before your long-tenured employees retire, get them mentoring! Setting up mentorship programs ensures that their invaluable expertise is passed on to your newer team members. This is essential for maintaining service quality and preserving your organizational culture.
5. Early Communication: Don’t wait until the last minute to talk about retirement options. Start the conversation early. Offer workshops, one-on-one coaching, or online tools to help your employees think about their retirement plans well in advance. This leads to smoother transitions for everyone.

Phased retirement models give employees more control over how they exit the workforce, fostering higher levels of engagement and satisfaction. In turn, employers can keep crucial expertise in-house while demonstrating a genuine commitment to employee well-being. It’s a win-win scenario that aligns with the current reality of extended lifespans and evolving career paths.

Want to learn more about the shifting retirement landscape and how phased retirement is changing the future of work? Download our whitepaper for in-depth data, insights, and actionable strategies on how to adapt your HR policies to support today’s multi-generational workforce.