The economic consequences of the COVID-19 pandemic and the Great Resignation continue to challenge the national job market, with the unemployment rate holding at 3.5% as of December 2022. Even worse, the Federal Open Market Committee predicts that the unemployment rate will increase to 4.4% by the end of 2023 and into 2024 — the equivalent of an additional 1.5 million unfilled jobs.
This is dire news for companies already struggling with labor shortages, but relief might come from an unexpected source: recent retirees. According to Fortune, roughly two-thirds of recently retired workers in 2022 expressed a willingness to re-join the workforce should the opportunity arise. Of those returning to the workforce, 60% said they were “looking for something to do.” A lot of retirees struggle with filling their time after retiring and truly miss the social aspect that working brings. This is a good thing for companies looking to hire skilled workers.
Hiring retired employees carries a potentially significant upfront cost, as experienced workers will typically expect higher compensation. That said, the benefits to productivity and workplace culture more than recoup any additional payroll overhead. Hiring retirees is a viable method to overcome staffing shortages, so let’s break down the benefits of hiring retired employees and some strategies your organization can use to stand out to those looking to return to the workforce.
3 Benefits of Bringing Retirees Back Into the Workforce
Hiring retirees leads to a positive workplace culture. In fact, 77% of respondents to an AARP survey reported that multigenerational colleagues create opportunities to learn new skills, and 69% said older workers make for more productive work environments. Senior workers extol their younger colleagues’ novel ideas and faculty with technology, while the younger generation appreciates their veteran co-workers’ experiences and willingness to teach. Here are some other benefits of hiring retirees:
Perhaps the single biggest advantage to hiring retired employees is the addition of decades of talent and knowledge through just a single hire. Whereas younger workers might require months or even years of training or on-the-job experience to acquire the aptitude and soft skills necessary to excel in a high-level role, a senior hire arrives ready to perform from day one. Additionally, older employees have more than likely worked in multiple settings for numerous leadership groups and seen their industries change and evolve over time, leaving them capable of easily navigating office dynamics and company directives that might cause their younger colleagues to stumble.
2. Mentoring and leadership
“To be the best, learn from the best.” Hiring retirees provides a pipeline of highly experienced workers perfectly suited to train the next generation of industry experts. Older people, in general, often seek ways to give back to society and pass on knowledge and traditions, and the workplace is a perfect setting to do just that. Bringing aboard veteran workers doesn’t just give your company the benefit of their expertise, but also allows those workers to instruct younger employees, giving them head starts on their careers.
Another advantage of hiring retired employees lies in this demographic’s flexibility. Though younger workers might need the stability of a full-time, permanent position, seniors are perfect for part-time or contingent employment and, thus, ideal candidates for organizations in need of workers able to adapt to rotating shift schedules and temporary job assignments. Also, veteran employees likely are not trying to climb the corporate ladder. Although recent hires might want to make their mark and advance, senior workers are past that phase in their careers and are more likely to be content in supporting roles and serving as subject matter experts.
Top Strategies to Encourage Retirees to Join Your Company
When retirees return to the workforce, it’s not always so much that they’re “unretiring,” but that they’ve made the decision to spend a portion of their retirement working again — this time on their terms, not their employers’. So, if you intend to plug your talent gaps by hiring retired employees, you’ll need to ensure you’re satisfying the specific conditions they require before they’re willing to re-join the labor market, including:
The pandemic permanently altered the nature of labor in modern society by necessitating hybrid and work-from-home models. Even post-lockdown, remote working remains a popular alternative to on-site scheduling. The near-universal adoption of business and communication applications such as Zoom and Slack allows employees to accomplish their job tasks without leaving home — the perfect set-up for retirees. There might be a slight learning curve for retirees trying to get acquainted with remote work and getting set up. However, because of their prior experiences and willingness to come back to work, they will show their adaptability to new systems. Just make sure there is time allotted in their training plans to learn the new ins and outs of remote or hybrid working.
Competitive compensation and bonus plans
Many retirees find that their retirement savings simply aren’t enough to live on due to economic conditions, unanticipated expenses, or other factors. Add in the soaring inflation rate’s devastating impact on the prices of gas, medical treatment, food, and other essentials, and you can start to understand why a retired person would want to return to work. That’s why it’s essential to offer fair compensation to prospective senior hires, as well as lucrative bonuses. For example, you could provide additional bonuses they could use to invest in their 401(k)s after achieving specific milestones.
Some retirees learn that they miss the social interaction and sense of community that comes with office environments. In fact, senior isolation and loneliness are some of the most significant mental health crises in America and were only exacerbated by pandemic-induced lockdowns. A friendly and inclusive workplace provides newly hired retirees with a valuable social outlet, as well as structure and a sense of purpose.
There is a multitude of reasons a retiree might choose to return to work, running the gamut from financial necessity to simple boredom. Regardless of their specific personal motivations, this “unretired” demographic is a godsend to businesses in need of talented and experienced employees — a commodity currently in short supply.
Kara Hertzog is president of Innovative Employee Solutions (IES), a leading global employer of record in more than 150 countries that specializes in payrolling and contractor management services for today’s contingent workforce. Kara is a third-generation member of the IES team. She has been closely connected to the company for many years but officially joined the family business in 2006.