When Ernie Nolan took a close look at the Madonna University staff a few years ago, he knew that they were headed for trouble: about 40 percent were approaching retirement age, and the institution had no formal plan in place to prepare for the exodus. The vice president for academic administration knew that the Livonia-based university had to act quickly to avoid losing all that institutional knowledge and experience.

So three years ago, Nolan and others at the university began developing a strategic plan designed to help the institution successfully navigate all the impending retirements. As part of that strategy, the university has created a phased retirement program that allows employees to scale back work hours for a set period of time prior to full retirement.

So far, the university has lost only a handful of its 166 full-time staff to retirement, but with an average age of 57, that likely will change in a few short years, he said. This year, about three staff members have retired. Next year, that will jump to five or six.

“It's as though one whole generation is about ready to leave the institution,” Nolan (pictured) said. “So far it hasn't occurred in a single department, so no department has been decimated – but that could happen.”

Madonna University certainly is not alone. With an estimated 78 million baby boomers headed for retirement, and 25 percent of the U.S. workforce nearing retirement age, employers everywhere are starting to grapple with the inevitable exodus of experienced, skilled employees. And while some employees still look forward to a traditional loll-in-the-Florida-sunshine retirement, many want to explore other options.

In response, many corporations are starting to offer employees other alternatives. According to a study released last week by Hewitt Associates, 61 percent of U.S. companies have or will develop programs that allow employees to retire in stages. The programs are designed to provide employees with the some of the benefits of a traditional retirement while still allowing organizations to benefit from employees' work experience and institutional knowledge, said Allen Steinberg, principal and senior design consultant at Hewitt, a human resources consulting firm based in Lincolnshire, Ill.

Of the 140 companies polled, 72 percent said retaining valuable employee experience and skills was the most important reason for offering phased-retirement programs. Companies with such programs said they help ease the problem of finding new talent, and also allow less experienced workers to learn from longer-term employees.

Now that 67 is the new 65, it is expected that these types of programs will continue to gain in popularity, Steinberg said.

At Madonna University, employees can opt for a phased-in retirement, which means that an individual remains on staff on a half-time basis for two years, Nolan said. This has allowed more experienced employees to mentor new department chairs and other colleagues before leaving the institution. “That has worked very well – particularly in areas where the human resources are fairly scarce.”

Coupled with an extensive orientation for new hires, the university also has developed a formal mentoring program, which pairs new faculty members with more experienced staff for their first year of employment, Nolan said. While some choose to continue the mentoring relationship beyond the first year, the program helps acclimate new staff members and helps educate them about the institution and its culture through topic-focused monthly programs.

Allowing employees to take advantage of a phased-in retirement also has helped the university do some needed succession planning, he said. And it has helped to ensure that the teaching culture of the university – as well as its institutional values – are passed on to newer, less experienced staff members.

“That has been critical in continuing the character of the institution,” Nolan said. Without it, “the institution would simply have a different character.”

Next week, read about how to bring a phased-retirement program to your organization, as well as how to prepare your workforce and company for more retirements.

Written by Jenny Cromie, certified human resources specialist (CHRS)