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Pairing Phased Retirement with Knowledge Transfer

By Sara Zeff Geber, Ph.D., Retirement Transition and Life Planning Expert, Life Encore

Part 2 of a 2 part series on Retirement, Baby Boomers, and Risks for Organizations.  Read Part 1: Are Baby Boomers Going to Work Forever? Time to Assess Your Risk…

For a truly robust knowledge management strategy, you will probably need to combine some attractive incentives and options for your older workers with structured programs that ensure adequate preparation for those that remain – or are hired. 

Programs Offered by Forward-Thinking Companies

Today, forward-thinking companies are instituting many of the following programs and striving for a balance between structured knowledge transfer and more casual people-to-people exchanges.

Abbott Labs created a Freedom to Work program.

Abbott’s Freedom to Work program, available to eligible U.S. employees (those 55 or older with 10+ years of service), offers employees who are considering retirement the option to scale back their hours and/or change their responsibilities without affecting their benefits. Since Freedom to Work was launched in 2008, more than 500 U.S. employees have enrolled in the program. Freedom to Work offers employees two different options as they approach retirement:

  1. The Custom Schedule Program allows employees to reduce hours and pay/bonus without impacting benefits. This option allows employees to work four days a week all year or take up to an additional five weeks of vacation.
  2. The Emeritus Program allows employees to change their responsibility (for example, from managing staff to becoming an individual contributor) without reducing their pay or grade.    ( 

Chevron has instituted the Chevron Bridges Program for former employees who are interested in maintaining a relationship with the company.  Interested retirees can enroll in the Chevron Alumni Community on a special website, and are offered opportunities to consult on projects that could benefit by their technical or professional experience and expertise.  They are also offered opportunities to mentor and advise on their areas of focus. (

The MITRE Corporation, a non-profit in McLean, VA has had a Retiree Casual program for over a decade.  Through it, former employees can return to work up to 1000 hours per year on an as-needed basis, at market rate.  Retirement eligible employees can also try out retirement by taking a leave-of-absence for up to one year, with full benefits paid for 90 days.  Retirees can also work part-time with full benefits after retirement.  Coaching and workshops are offered to help with retirement planning.

Inova Health Systems estimates that 10% of its workforce is involved in its informal phased retirement program.  In some cases, employees step down their hours; people in administrative positions are offered the chance to telecommute, which provides more flexibility.  For nurses, if the job becomes too physically demanding, Inova provides opportunities to change the scope of the job – most commonly to a position in training and development.

National Institutes of Health – At the National Institutes of Health, a federal agency located in Bethesda, Md., employees may reduce their hours over time to gradually move into retirement. In addition, NIH has begun a trial program that allows an employee to return to the agency within one year of his or her retirement. With this approach, retirement is not a “be all-end all” decision. Employees can test the waters of retirement to see if they are truly ready. 

Mercy Health System – Mercy Health System, located in Janesville, Wis., has implemented a “Work to Retire” program that offers several phased-retirement options. Employees age 50+ can choose to work reduced hours, to share their jobs , or, in certain cases, to work at home and continue to be eligible for medical and other benefits—as long as minimum hourly requirements are met. Once employees reach age 55, they are eligible to receive benefits for the entire year, as long as they work at least 1,000 hours during the year. So an employee could work for six months of the year, take six months off, and still be eligible for benefits.

Central Florida Health Alliance – Central Florida Health Alliance, located in Leesburg, Fla., offers a “Summers Off” program that is similar to the “Work to Retire” program available at Mercy Health System. “Summers Off” is designed to meet the needs of “snowbirds,” who spend the winter in Florida and the summer in their homes in the North. As employees near retirement age, they can choose to work part of the year and have the summers off. Central Florida Health Alliance also works with employees to adjust their schedules and work status as needed to phase employees into retirement. The Alliance also helps employees make the transition into roles with more accommodating work hours.

Assessing the Risk & Taking Action

You really can’t know the level of risk you face unless you take a close look at your workforce.   The Impact of Retirement on Institutional Knowledge Retention chart below illustrates a step-by-step process for assessing risk in your organization.

Phased Retirement Infograph

Start at the top of the chart and work clockwise:

1.  Take a look at your demographics and forecast future needs, based on the 5- or 10- year strategic plan.  What percentage of your workforce is 55 or older? 

2.  Identify those 55+ employees with key knowledge and experience – a kind of talent inventory.  Remember…this knowledge doesn’t just exist in the heads of salespeople and marketing gurus who have the relationships with key accounts.  It also exists in the heads of engineers who understand the entire history of the organization and how products have been developed; it exists in the minds of people in finance that understand the risks that have been averted, have applied financial models and know what’s worked and what hasn’t; it exists in the heads of administrators and assistants who know how to get things done in a timely way. Use the Four Rs to help you:

  • Who maintains key Relationships?
  • Who has been key to creating and preserving the Reputation your organization has built?
  • Who holds in his or her head the history of product line development and the evolution of core processes? Who knows how to get things done in your organization?  Losing this information incurs Re-work, and that is costly to any business.
  • Who can re-create the steps that led to your company’s latest breakthrough?  Who knows what it took to get the latest product to market and gain the market share you now can boast?  Without that experience, your organization will likely spend tremendous time in Regeneration – again, costly.

3.  Pay attention to your future needs.  Don’t forget to factor in where your organization is headed and what knowledge and talent you will need in the future.

4.  Figure out what gaps are going to be created when key employees leave.

5.  Create knowledge transfer vehicles, processes, and programs built around the gaps you have identified.

6.  Support the knowledge transfer efforts with flexible opportunities that entice older employees to stay longer – this is your phased retirement program.

7. Design educational opportunities for age 55+ employees that would help them plan their future at the company and beyond.

Options for Capturing Institutional Knowledge

The following table is a laundry list of strategies other organizations have embraced as ways to capture institutional knowledge and offer incentives for older employees to stay a little longer.  Not all strategies work in every environment, so consider your culture and your specific needs as you make decisions about your own knowledge management program design.

Knowledge Management Strategies

Phased Retirement Strategies

•  Create or revive succession planning practices

•  Create cross-training programs

•  Formalize mentoring and shadowing opportunities

•  Ensure multi-generational work teams

•  Make a policy of action reviews or post-mortem meetings on every completed project and capture the information

•  Conduct knowledge audits where junior employees present a project outline and ask questions and get input of senior SMEs (subject matter experts)

•  Conduct story-telling sessions in which older SMEs recite a personal story of a lesson learned – a failure or a success

•  Create user-friendly repositories/data bases for information capture and encourage its use

•  Analyze existing reward systems to make sure seasoned employees are appropriately incentivized to share what they know

•  Flexible workweek

•  Sabbaticals or extended leaves of absence for qualified employees

•  Telecommuting opportunities

•  Project-based work

•  Job sharing opportunities

•  Alternative career tracks for older workers (fewer management and administrative responsibilities)

•  Mentor/coach-oriented job descriptions (customized for the individual and situation)

•  Opportunity for employee to retire and return as a contractor

•  Contract with an employee leasing agency or job shop with the aim of bringing back retirees on a part-time, project-by-project  basis

•  Form an alumni organization for former employees

People-to-People Interactions Critical to Success

In previous research studies on knowledge transfer, one common finding is that the most successful programs are heavy on people and light on technology or databases. In past years, many elaborate information cache systems were instituted by some of the largest and most successful companies in the U.S. as ways to capture this tacit knowledge from their older workers.   Most failed.  It seems you just cannot acquire that kind of information from a database.  Successful knowledge management systems involve people-to-people interactions – mentoring, shadowing, coaching – more like the apprentice systems of the middle ages than machine-driven knowledge transfer vehicles.

Remember, it’s also important to open up the conversation about retirement planning. Encourage discussion of knowledge transfer and retirement plans within departments. In addition, offering retirement planning workshops for eligible employees will go a long way toward increasing the ability of your organization to do meaningful and realistic workforce planning.  Most senior leaders and company SMEs want to share their knowledge and will do so eagerly when given incentive and opportunity. When you know what people want for their future, it becomes much easier to meet both the needs of the company and the needs of your older employees. 

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