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The last 15 years have seen a relatively large decrease in the numbers of older workers remaining in employment in Britain, Europe and the USA[1-5]. Much of this reduction has been due to the use of early retirement. Successive British governments have actively encouraged early retirement programmes as a way of creating jobs for younger workers, although this has frequently been at odds with the objectives of individual companies which have used early retirement to reduce the overall size of the workforce. Despite its cost, early retirement has been an attractive element in manpower planning. It enables "headcount reduction" to take place without undue opposition from workforces and trade unions. As we move towards the twenty-first century it seems likely that early retirement will become even more important in manpower planning. There appear to be minimal grounds for assuming that the generally poor performance of the post-war British economy will change, leaving us with the prospect of organizations continuing to go through periods when they need to reduce manpower. As demographic trends show an increasingly elderly workforce, early retirement schemes are likely to become increasingly important for achieving manpower targets.
Given the current and likely future importance of early retirement, it is perhaps surprising that, with some exceptions (e.g.[2,7-12]), it has not been widely discussed by either social or management researchers. The present article draws on the findings presented in a recent study by Maule et al. investigating the factors which are important in the decision to accept early retirement, the extent to which these factors are associated with a different quality of life in retirement and whether these vary across different job categories. The focus of the present article is, however, different and involves a reinterpretation of the findings from Maule et al. to achieve three primary objectives. First it sets out to determine the implications of these findings for the development of effective early retirement schemes which are attractive to potential early retirees, suggesting how they should be constructed to encourage targeted employees to sign up and leave. Second, it explores the implications of these findings for ways in which the early retirement process may be constructed and implemented so that it maximizes the likelihood that later retirement will be a positive and rewarding experience for those leaving the organization in this way. Third, the article considers the extent to which factors relating to the first two objectives are likely to be different for different job categories. For this study these different categories are explored by comparing salaried and hourly paid personnel.
To meet these aims the article is structured in the following way. First there is a brief review of previous research in this area, followed by brief descriptions of the methodology and findings of the Maule et al. study. This is followed by a brief discussion of these findings and a review of the implications of these for the development of effective early retirement schemes.
A selective review of previous research
Previous research on early retirement has suggested that finance and health are the key factors in the decision to take early retirement, with some researchers suggesting that one rather than the other is the more important[9,14,15]. The importance of other factors has also been discussed, including job related aspects, e.g. high workload and anticipated job change[9,16], and pressures outside the work situation (e.g. views of family members). Pollman's study also revealed a second and potentially very important finding showing that those with higher job commitment found early retirement more attractive. This suggests that companies may lose some of their more committed and productive workers through early retirement, further emphasizing the need to understand and manage the process carefully. Finally, Makeham and Morgan suggested that there are differences in the relative importance of factors across different employment groups, with health relatively more important for semi-skilled workers as compared with professional and managerial grades.
Although previous studies provide some insights as to the factors which are important in the decision to take early retirement, Maule et al. identified three major criticisms of this work. First, many studies used indirect methods to assess the importance of factors rather than focusing directly on the decision taken by prospective early retirees. For instance, published statistics showing earlier death among early retirees was taken as evidence that health was an …