Organizations' Ways of Employing Early Retirees: The Role of Age-Based HR Policies

PURPOSE OF THE STUDY: We examine whether from an organizational perspective it is possible to distinguish different ways of employing early retirees and explore how the employment of early retirees is related to the application of 4 age-based human resource (HR) policies, namely demotion, offering training opportunities to older workers, offering early retirement, and allowing flexible working hours.

DESIGN AND METHODS: We perform a latent class analysis on a sample of 998 Dutch organizations in order to categorize them based on 3 dimensions of their employment of early retirees. We then run a multinomial logistic regression to relate the employment of early retirees to the 4 age-based HR policies.

RESULTS: We distinguish 4 types of organizations based on their way of employing early retirees: nonusers (52.6%), users for mainly standard work (20.8%), users for mainly nonstandard work (9.8%), and users for standard and nonstandard work (16.7%). We find that organizations that apply demotion, offer early retirement, and allow flexible working hours are more likely to be users for mainly standard work. Also, organizations that do not offer early retirement are less likely to employ early retirees.

IMPLICATIONS: Age-based HR policies, especially demotion, offering early retirement, and allowing flexible working hours, are conducive to the employment of early retirees for mainly standard work. Broader implementation of these policies may provide opportunities for older workers to make a more gradual transition from work to retirement.