Over the last two years I’ve had the privilege of speaking at a gathering for employees of the American Transmission Company (ATC) based in the Milwaukee area. The first time I spoke to one of the groups, the employees that had gathered ranged from age 50 up into their mid-60s. They sat in for a full-day workshop on the topics of well-being and retirement.
Before the day commenced, I asked the company’s CEO, Mike Rowe, what had motivated ATC to put together a day like this for its employees. His answer surprised me.
“Our company is only 17 years old,” he said, “and we have yet to see a single employee retire. We want to help our employees think through the issue and make the right choice for them and for us.”
ATC produces and operates high-voltage electric systems that provide pathways of power into communities. It was founded as the first multi-state, transmission-only utility in the United States. Its focus is transporting power from where it’s produced to where it is needed. Beyond just transporting power, it wanted to empower its employees too—to make decisions for themselves in the long run.
Too many corporations still force their employees to fit their lives into anachronistic models of retirement that no longer reflect current realities. These companies can no longer claim ignorance that a “phased retirement” model is right for the times—a model in which older employees follow a glide path into fewer hours and less demanding work. This is best for everybody, including the employees, the corporations and their communities.
Transamerica’s Center for Retirement Studies has been conducting a survey on this topic for almost two decades now, and little has changed in that time despite a growing awareness that the old model of pushing people into retirement at age 62 to 65 no long serves its purpose—if it ever did in the first place. According to the latest survey conducted by Transamerica, just 31% of employers let their employees shift from full-time to part time, and only 27% allow them to assume positions that may be less stressful and demanding. This is the case despite the fact that 77% of the employers believe their employees want to continue working and 47% believe their employees are envisioning a phased retirement.
The bottom line here is that companies are quite aware of this current state of employee mentality, but most of them are acting as if they weren’t.
And they’re talking out of both sides of their mouths on the issue. Of those 1,800 employers surveyed (those ignoring the demand for phased retirements), 71% say they are “aging-friendly” and that they offer work arrangements and training for employees of all ages to be successful. All ages up to 60 is what I think they meant.
The beauty of the phased retirement approach is that both the company and the worker have time to adjust rather than being forced to deal with the realities when the employee’s work suddenly stops. The problem for the corporation is a brain drain and loss of experience, intellectual capital and the network of relationships established by the retiree. The chief problems for the retiree include not only the retirement whiplash of waking up with no challenge or focus, but also the ensuing identity crisis and boredom that so many experience.
Phased retirement allows both parties time to adjust. Those employees phasing out of work can mentor their future replacements and download their decades of experience and knowledge. Without that approach, “years of institutional knowledge could be walking out the door,” says Susan Weinstock, vice president of financial resiliency at AARP. I’ve been pounding this drum since 2001 when I first published my book The New Retirementality (now in its fifth edition). I am stunned at the lack of progress our corporations have made. They are failing their workforces—and it need not be so.