When does voluntary descent make sense?

Who voluntarily renounces wages and responsibility? One who has done it is Gustav Lee. As a human resources manager at the insurance group Swiss Life, he had reached the point at the age of 62 that he realized it was time to take a step back. “The last few years in this role have been stressful. I’ve noticed that I need more time to recover after stress,” he told the newspaper of the commercial association.

Until then, he had led a team of ten people and been responsible for special projects. A restructuring in the organization offered him the opportunity to reduce his workload to 70 percent of his full-time position and downsize his department to three employees.

This step, which at first glance seemed unusual, was possible because employees of the insurer from the age of 58 can voluntarily choose between different working models for a smooth transition to retirement.

Cut back without losing your pension

Swiss Life’s “58+ model” is aimed at employees who want to cut back on their time or work and can also imagine working beyond normal retirement age. They can reduce their workload or relinquish their managerial role without their future pension being reduced. At the same time, continued employment up to the age of 70 is possible. At the insurer’s Swiss location, 39 employees are currently working beyond normal retirement age.

“This is how we ensure long-term labor market and work ability, from the start of a career to retirement,” says spokeswoman Fabienne Schneider. The company also benefits from this: the experience and network of long-standing employees are not lost from one day to the next, the transfer of knowledge to colleagues of younger generations is ensured, and succession planning can be better tackled.

Five career stages

In science, the gradual withdrawal from working life is called a rainbow career. The term comes from the American psychologist and educator Donald E. Super (1910-1994). In his research papers, he distinguishes between five career stages:

The middle of working life is the zenith of your professional career. From then on there will be a gradual reduction in requirements, wages and managerial responsibility. For this reason, today one speaks of rainbow or bow careers.

As the journal “Wirtschaftspsychologie” writes, in the maintenance phase you become a real professional in your field. New opportunities for management positions and career steps are opening up. Your own expert knowledge is required.

Towards the end of this period, partial retirement or early retirement can also interrupt gainful employment prematurely. In this phase of decline, professional activities decrease. From this age, performance can be noticeably limited.

A comparison of the performance of older and younger employees shows that older employees work more slowly but make mistakes less often than younger ones. According to studies, they need more light, longer rest periods, and they find it difficult to multitask. “Older employees are more likely to be distracted in open-plan offices because they are less able to switch off background noise. They are absent less often than younger people, but the absences last longer,” says the Zurich sociologist François Höpflinger, who researches age and generation issues.

Surprisingly, according to Höpflinger, productivity in old age can be the same or even higher than that of younger employees, since older people work more carefully on average and, thanks to their experience, are better able to deal with difficult situations, for example with demanding customers.

Rainbow careers are common

A look at the statistics shows that rainbow careers are widespread. According to the Swiss Labor Force Survey, the employment rate (percentage of employed persons in the population) generally decreases from the age of 50.

While one year before the minimum age for drawing a pension from the second pillar (57 years), 90 percent of men and 82 percent of women are still active in the labor market, the employment rate for 64-year-old men falls to 56 percent and for women 63-year-old women to 52 percent. The average age at exit from the labor market in 2020 was 65.2 years.

The corona pandemic increased the popularity of early retirement at SBB

SBB also offers its employees the opportunity to reduce their workload and continue working beyond the retirement age. The company has offered four models for working hours and retirement since 2015. With the Activa model, employees have the opportunity, in agreement with their supervisor, to reduce their level of employment before regular retirement and to continue working at reduced hours for a maximum of three years.

Every year, around 130 employees over the age of 58 reduce their workload by an average of 30 percent at the Federal Railways. This corresponds to a low single-digit percentage within the age group.

However, the number of SBB employees who decide to retire completely is currently even larger. “In the last two years we have observed a decrease in partial retirements. Employees tended to prefer full early retirement,” says Sabrina Niederhauser from SBB’s Future Models department. This trend is likely to be related to the difficult working conditions for railway employees at the beginning of the corona pandemic.

The rule used to be: work “to the grave”

From a historical perspective, the possibility of a phased retirement from professional life is not a matter of course. Well into the 20th century, people would have worked “to the grave”, says the sociologist Höpflinger. “Economic security in old age largely depended on the possibility and ability to continue working in one’s original profession.” Poverty in old age was a common risk, especially in occupations where physical strength determined income.

With the expansion of old-age provision, the number and proportion of women and men who continued to work after the age of 65 fell. “Only in the last few years have the employment rates of 65 to 69 year olds increased again slightly,” Höpflinger notes.

There are various reasons why the labor force participation rate drops rapidly, particularly from the age of 60. Some employees are tired of work and thanks to solid financial resources from their pension and savings, they can afford the additional free time. Or they no longer have the opportunity to continue working for their previous employer.

Flexibility is key

Employees who can envision a rainbow career need to ask themselves if they are willing to downgrade and hand over their managerial position to a younger person, and also accept a pay cut in the process.

In addition to downgrading, there is also the option of reducing your workload. The willingness to take such a step is also based on one’s own realization that one is no longer always able to perform at the same level as before.

Another reason to downsize at work is that older workers often struggle with the fact that the best years of their careers are already behind them. «We have found that in a company it is often not the age of the employees that is the problem, but the generation difference. Suddenly older employees get younger women as supervisors. Or younger researchers are more successful with new algorithms than the older ones,” says the sociologist Höpflinger.

Regardless of the design of the working model, the following applies: Even with a lower workload, you have to be open to further training. Last year, 40 percent of 55 to 64 year olds took part in further training. It was 19 percent among 65 to 74 year olds, although the pandemic effect led to fewer participants than in previous years. For comparison: Among the 45 to 53 year olds, 51 percent attended further education courses.

Plan retirement early

Whether you opt for a rainbow career or regular retirement: It is worth not only planning your gradual retirement early on, but also the timing and modalities of retirement.

Sabrina Niederhauser from the SBB Future Models department says: “The SBB do not give any recommendations as to when you should start thinking about your retirement.” Consultations or courses such as “precaution in sight” are offered from the age of 45. This is about retirement planning and budget planning. “It is important to observe notice and registration deadlines. That’s why certain questions should be decided six months before regular retirement.”