America\u2019s workforce is on the verge of an unprecedented transformation.<\/p>\n
More Americans are turning 65 in 2025 than any year before. That trend is set to continue through 2027. As millions of employees age into\u00a0retirement, employers will find themselves struggling to replace that seasoned talent with younger, less experienced workers.\u00a0<\/p>\n
Part of the problem stems from demographic reality. Birth rates have declined for nearly two decades, which means fewer young adults are entering the workforce each year. By 2032, the United States is projected to face the largest labor shortage in its history.<\/p>\n
Of course, there\u2019s no way to manufacture more young workers. But it\u2019s not too late for employers to stave off the impending talent deficit. To do so, they\u2019ll need to rethink prevailing workplace norms \u2014 and start treating\u00a0retirement\u00a0not as a cliff but as a gentle slope.\u00a0<\/p>\n
It\u2019s called \u201cphased\u00a0retirement\u201d in the industry jargon. At its most basic, it involves gradually reducing work hours and responsibilities for older employees while still leveraging their expertise, ideally to coach up the next generation of workers.<\/p>\n
Employers need their most seasoned workers to stay on. More than seven in 10 U.S. employers today say they can\u2019t find the skilled workers they need. And many recent college graduates lack the kinds of soft skills that today\u2019s jobs demand \u2014 including clear communication and leadership.\u00a0<\/p>\n
Keeping experienced employees on board as mentors is a simple way for companies to instill these critical competencies in newer cohorts.<\/p>\n
Phased\u00a0retirement\u00a0can also help companies to manage the consequences of the looming workforce contraction by forestalling brain drain and smoothing succession planning \u2014 all while preserving the institutional knowledge and relationships that help companies thrive.<\/p>\n
But phased\u00a0retirement\u00a0isn\u2019t only beneficial for businesses. It also serves the needs of older workers, many of whom are already breaking traditional\u00a0retirement\u00a0norms by staying in the workforce longer.<\/p>\n
Many retirees want to continue working in some form after they reach\u00a0retirement\u00a0age. Americans 65 and older are nearly twice as likely today as in the late 1980s to still be working.<\/p>\n
Why? Some older workers are seeking to make their retirements more financially sustainable by staying on the job for longer. Others wish to remain engaged in a job or a workplace community they enjoy.\u00a0<\/p>\n
Some new retirees are caught off-guard by the abruptness of the transition from full-time work to a permanent vacation of sorts. They may want the freedom\u00a0retirement\u00a0offers but are hesitant to step away completely from the structure, income, and social connections that can give their days meaning.<\/p>\n
The decision to retire or keep working has a direct impact on every area of a person\u2019s life. Work \u2014 at least in some capacity \u2014 can lead to better mental health later in life. Phased\u00a0retirement\u00a0has proven to help older workers maintain vitality and reduce fatigue. And recent surveys suggest that many people over 50 value having a sense of purpose more than feeling youthful.<\/p>\n
By contrast, completely withdrawing from the workforce upon\u00a0retirement\u00a0may actually accelerate cognitive decline in some older Americans.\u00a0<\/p>\n
I have personally seen the benefits of phased\u00a0retirement\u00a0among those who have participated in Abbott\u2019s Freedom 2 Work program. Employees approaching\u00a0retirement\u00a0can choose to scale back their schedules while continuing to earn income, contribute to their 401(k)s, and delay claiming Social Security.\u00a0<\/p>\n
Some have used their extra time out of the office to travel or be with family, while others appreciate the chance to rest and return to work recharged. For many, the flexibility allows them to continue doing the work they love longer than they otherwise could.<\/p>\n
Workforce development is not simply about training young employees in the skills they need to succeed in the workplace. It\u2019s about ensuring that our most senior, experienced workers continue to make meaningful contributions in their roles for as long as they\u2019d like.\u00a0<\/p>\n
Organizations seem to be realizing as much \u2014 and are increasingly embracing incremental retirement options. Nearly four in 10 human resources executives now say their companies offer some form of phased\u00a0retirement\u00a0\u2014 more than double the share from before the pandemic.<\/p>\n
Phased\u00a0retirement\u00a0offers a way to meet the needs of workers and employers both \u2014 preserving expertise while giving older employees the freedom to continue doing work they value even after they reach their golden years.<\/p>\n
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.<\/p>\n","protected":false},"excerpt":{"rendered":"America\u2019s workforce is on the verge of an unprecedented transformation. More Americans are turning 65 in 2025 than…\n","protected":false},"author":2,"featured_media":220570,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[49996,72,176,151,61,60,174,175,1611],"class_list":{"0":"post-220569","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-abbott-laboratories","9":"tag-business","10":"tag-finance","11":"tag-human-resources","12":"tag-ie","13":"tag-ireland","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-retirement"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/220569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=220569"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/220569\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/220570"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=220569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=220569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=220569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}