Partial retirement, logically enough, affects older employees and has an overproportional impact on the know-how carriers of the company. 20% personnel reductions through partial retirement equals 35% reduction in know-how. This reduction, regulated by the appropriate works agreements, proceeds without any opportunity to hire experts from outside to compensate for the loss. Generally speaking, partial retirement measures are initiated as part of reorganization programs. While the processes being performed may indeed become leaner, they do not necessarily become simpler. Complex system support grows correspondingly. The remaining team is more than overwhelmed by the results. 

An additional replacement of personnel with the above-mentioned experts (Figure 2, Position 1) would offer relief for lost jobs. The remaining employees should be prepared for the future requirements for their jobs during qualification programs (Figure 2, Position 2) before the partial retirement measures go into effect. Moreover, the transfer of the work from the partial retirement candidates to their successors must be regulated. A positive framework of appreciation and a constructive leave-taking phase can prevent any harm to the corporate image. The loss of know-how cannot be completely compensated in this way, but the effects can be kept to an acceptable level. The difference must be made up by a motivating, inspiring management team and time (Figure 2, Position 3).

 

 

 

That is not how it works in reality: the released employees frequently return to their former companies as consultants, subcontractors, or freelancers, charging daily rates usual on the market, because they are needed to close the know-how gap described above. The difference between the savings in personnel expenses and the external daily rates is far greater than a generously calculated risk surcharge.

The solution approaches described here begin too late. From an economic and business viewpoint, the instrument of partial retirement is a misguided development.  When the young and the wild leave 

During reorganization periods, the decision not to extend limited-term contracts is quickly praised as a “quick win”. The employees affected by this decision are in general young, intelligent, and performance-oriented people who are well motivated. Most of them are already completely familiar with their jobs and integrated into the company, know the rules, processes, key movers, and are image factors to the external world because they have a good relationship and positive attitudes toward the company. So when they leave the company, it creates a vacuum in the labor situation. Since it is not possible to explain to the affected employees why they are the ones, despite above-average work performance and output along with (frequently) below-average earnings, who must leave the company without receiving any compensation, the company’s image suffers substantial harm. Another consequence is the overwhelming demand made on managers who are not in a position to compensate ad hoc for the loss of their key performers. 

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