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Phased Retirement Emerging As One Solution To Labor Dearth

With changing demographics -- an older workforce and a labor pool that is growing by just 1% a year or less -- phased retirement arrangements soon may be commonplace and not just a fleeting phenomenon, says a just-released survey by Watson Wyatt Worldwide. Watson Wyatt found that one out of every six employers -- and 11% of manufacturers -- allow workers approaching normal retirement age to reduce their work hours and/or job responsibilities and gradually ease into retirement. And, in almost half the cases, the primary reason the company implemented the program was to retain skilled workers. To date, phased retirement arrangements are most prevalent in the professional/technical and scientific sectors. However, nearly 75% of those surveyed said that they considered such an approach to be a long-term viable strategy to address labor shortages. Nearly one-third of the companies that offer phased retirement allow employees to transfer to jobs with reduced pay and responsibilities. But the most prevalent arrangement, used by 75% of employers, is to hire retirees for part-time and temporary work. Some 60% offer reduced workweeks or work days, and 42% hire retirees as consultants.

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