I spoke to some specialists on the subject: Neil Costa, the author of the Fast Company article and the one who coined the time period flextirement; Cheryl Evans, director of the Milken Institute and co-author of a paper titled “Shifting the Retirement Paradigm”; and Jack Towarnicky, an employee-benefits specialist and creator of a Benefits Quarterly article titled “Aiming at the Wrong Target: What’s Holding Employers Back When It Comes to Older Workers?”
The advantages of flextirement
Costa, who’s the chief government of a digital recruitment advertising and marketing company, says a flextirement program may be attractive to each employers and to older staff. He got here up with the time period when he and a few colleagues had been speaking about find out how to make jobs at their 50-person firm extra possible for staff nearing retirement. One of these staff has now begun a flextirement, and one other is within the means of beginning one.
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“When we think of normal retirement, it’s an on/off switch, and it’s someone checking out and going off into the sunset,” Costa informed me. “We’re trying to define a new employment status where you’re still an employee and can still take advantage of the benefits and still have a more intimate relationship with the company.”
For workers, flextirement would allow them to proceed working part-time, maybe on considered one of their employer’s key initiatives or as a mentor — probably remotely. For companies (or nonprofits or authorities businesses), the profit can be that they might hold their useful skilled staff longer, “mitigating catastrophic knowledge gaps and empowering the younger generation of workers,” Costa wrote.
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A retirement paradigm shift
“A lot of people aren’t necessarily going to retire in the traditional sense going forward,” the Milken Institute’s Evans stated. “The notion of retirement, we feel, is changing. That’s sort of a paradigm shift.”
With flextirement, an worker’s wage and advantages — medical health insurance, 401(ok)s and the like — proceed on a prorated foundation, relying on what number of hours or days the particular person is working.
“If someone’s working 40% of the time, we’re willing to cover 40% of their benefits, but they could still be an employee,” Costa stated of his firm.
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Flextirement vs. phased retirement
The flextirement thought could sound just like phased retirement, however there are variations.
For one factor, the small variety of employers that at the moment supply phased retirement — during which workers step by step go from full-time work to working fewer hours — sometimes solely accomplish that on an advert hoc foundation, offering this selection to a choose variety of older staff who’ve the gumption to ask for it.
The newest Principal Financial Well-Being Index survey discovered that solely 16% of U.S. corporations work with workers frequently to create a phased retirement plan. Yet 52% of workers stated they need to step by step lower the period of time they spend working of their area and to finally cease working.
Similarly, about half of older staff in a Transamerica Center for Retirement Studies survey stated they anticipated to transition into retirement by step by step decreasing their hours or taking over much less demanding jobs.
Unlike phased retirement, flextirement can be open to all an employer’s older staff, letting those that need to pursue this selection begin a dialog with their bosses and give you preparations that work for each side.
Will employers supply flextirement?
I can see why many older staff would need flextirement. But the large query is: Will employers go for it?
HR advantages advisor Towarnicky, a proponent of what he calls “cost-effective, age-neutral, flexible employment,” is uncertain that many employers will supply the sorts of preparations he and Costa favor.
He’s not being dour, he stated — he’s only a realist.
“The human resources departments with legal counsel and the like, they’ve already decided what’s optimal. And that’s what they have in place today,” Towarnicky stated. “Until something disrupts that, it’s hard for me to see how they’re going to change the status quo.”
But, he requested, “Wouldn’t it be more interesting, and perhaps achieve a better outcome, if worker and employer objectives and goals intersected and matched?”
Which employers would possibly attempt it first
Certain sorts of employers could also be extra prone to take into account adapting with the intention to meet older staff the place they need to be.
“I think to the extent the employer is smaller, your chances are greater of people identifying your individual performance and accommodating things that would keep you employed,” Towarnicky stated.
Costa expects flextirement applications will attraction first to employers with staff who’re engineers, accountants and in artistic providers — “technical types of roles you can do from anywhere.”
By distinction, jobs like gross sales is likely to be more difficult, as a result of for these roles, somebody would nonetheless must handle the purchasers, Costa stated.
The push for change
Although his flextirement thought is new, Costa is optimistic.
“There’s nothing about it that’s super scary for employers, and we’re looking at a massive brain drain of boomers and Gen X-ers getting close to retirement,” he stated. “I think flextirement is a great opportunity to retain people and to bring in talent from competitors who aren’t offering it.”
The World Economic Forum agrees.
In its January 2024 Insight Report on longevity financial system rules, the group stated: “Companies need to evolve their job designs for flexibility to provide older individuals who wish to continue working with the ability to remain employed for longer.”
One firm that’s been doing this, the report famous, is the insurer Swiss Re, whose Flex+ program lets older staff flexibly scale back working time earlier than coming into “regular retirement.”
In a LinkedIn article by Janine Vanderburg, a advisor and author centered on ageism, influencers within the older-worker area supplied their predictions for 2024. Transamerica Institute CEO and President Catherine Collinson stated she believes “employers will increasingly adopt flexible retirement options to facilitate smoother transitions for themselves and their retiring employees.”
Since his Fast Company article got here out, Costa has obtained a whole lot of optimistic response from his skilled and private networks. “People love this concept,” he stated.
The Milken Institute, which ceaselessly helps its older staff transfer into advisory roles, hopes extra employers will likely be receptive to concepts like flextirement.
“We want employers to recognize that our population is aging and that people should not be quietly pushed out of the workforce,” Evans stated. “We really encourage employers to think about how they can use people in a different way and recognize and value what [workers] bring to the workforce.”
Unfortunately, she added, as of late “the onus seems to be on individuals.”
What do you consider flextirement? Has your employer supplied something prefer it? Let us know within the feedback.
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