ng to a new survey of 586 large employers by Watson Wyatt Worldwide, more employers will be embracing "phased retirement" approaches, such as shortening work hours and offering part-time or temporary work, to retain long-time employees. Sixty percent of the Watson Wyatt survey respondents say they are having difficulty attracting workers. And 70 percent agree that implementing a phased retirement program, along with other flexible options, is a viable strategy for addressing labor shortages (Valerie Pagenellli, 2001).
             Currently, 16 percent of employers interviewed by Mercer offer phased retirement, while another 28 percent say they are interested in establishing such programs in the next two to three years. Phased retirement programs are most common among employers in the education sector (36 percent), followed by public administration (21 percent). Employers with workers who average 45 to 49 years old are almost twice as likely to offer phased retirement than are businesses where the average age is under 45.
             Research also shows that although employees are often pleased with the incentive of extra benefits, they often feel a buyout is the best of imperfect choices (Xenia Montenegro, 2002). Those who would have preferred not to retire at that point in time often move on to new jobs at other companies, taking advantage of the recent labor shortage. Such "bridge jobs" have become much more common among older American workers who are, in effect, crafting their own phased retirement programs, usually without the support of a formal employer program. Some workers take bridge jobs because of restricted access to their retirement benefits while employed by the plan sponsor. Others have a desire to remain active and a greater need for financial security.
             Benefits of Phased Retirement Programs
             Looking at these patterns, businesses are now seeing an opportunity to address the labor shortage by cultivating the fastest-growing seg...