Diversity Insight

Making It a Win-Win When Retirees Return to Work

On any given day, it’s not unusual to walk past an office conference room and find balloons and a “Happy Retirement” banner floating over a group of coworkers gathered for a colleague’s send-off. But what happens after the party? Often, the life of leisure loses its luster, and the retiree seeks a return to the workforce.

Research from the Rand Corporation indicates that more than half of retirees are open to the prospect of reentering the workforce, and many are doing just that. After all, today’s retirees are often healthy and eager to keep contributing to an employer. Also, employers often want them back, since the low unemployment rate of recent years has made jobs hard to fill. So, retirees going back to work in some capacity seems like a win-win proposition. It’s not without complications, though.

Tips for HR

“There are some complex tax and labor rules regarding hiring retirees, which causes some companies to steer clear of this labor pool,” Brad Federman, chief operating officer of HR consultancy F&H Solutions Group, says. “However, these are not issues that should hold employers back.”

Employer policies can go a long way toward helping organizations reap the rewards that come from an age-diversified workforce. What can HR do to help create that win-win for both employer and returning retiree?

“The biggest thing an employer can do to help a previously retired employee be successful is to not stereotype them,” Federman says. “Generational differences have been over-emphasized and tend to stereotype people at an individual level.”

Flexible schedules and part-time work can help a returning retiree, but those benefits are also helpful for people at various ages, Federman says. “The key is to create an environment that allows people to contribute in the manner that meets their needs and the needs of the company.”

Training is also appreciated. “Employers should not be afraid of investing in training for older workers,” Federman says. “When employers do not train returning retirees, they tend not to be successful and the effort fails.”

Another suggestion for employers interested in bringing previously retired workers into their candidate pool is to partner with organizations that serve retirees, such as AARP, Federman says. Creating a company retiree alumni program is another way to develop a homegrown talent pool of retirees.

Compensation can be a problem if retirees accustomed to high salaries “price themselves out of the market or create negative negotiations during the hiring process,” Federman says, but such challenges can be worked out and don’t have to hold employers back.

“Most retirees returning to work are more interested in remaining active and making an impact. They are not thinking about climbing the corporate ladder as they already have,” Federman says. So, employers should “focus more on creating a good fit where the retiree can make a difference.”

Some employers may be concerned that a previously retired worker’s physical and/or cognitive condition can present a problem, but Federman points out that many older workers are more capable than younger ones.

“We should not discriminate based on age,” Federman says. “Focus on recruiting a diverse talent pool and developing a good selection process that determines whether an individual has the knowledge, skills, and abilities to do the work, rather than generalizations and stereotyping. You will make better selection decisions, improve your talent, increase the diversity of your workforce and strengthen your organization.”

Remember the ADEA

The possibility of unlawful age discrimination needs to be kept in mind. The federal Age Discrimination in Employment Act (ADEA) covers employers with at least 20 workers and protects employees and applicants who are aged 40 or older from discrimination based on their age. Many state laws also outlaw discrimination based on age.

In June 2017, the Equal Employment Opportunity Commission (EEOC) marked the 50th anniversary of the ADEA by holding a public meeting to address problems workers still face related to age discrimination.

Sean D. Lee, an attorney with Fortney & Scott, LLC, in Washington, D.C., reported on the EEOC’s discussion in the July 2017 issue of Federal Employment Law Insider. He noted that the EEOC discussion identified several barriers to hiring and continued employment, including:

  • Hiring requirements for maximum years of experience and “digital native” skills;
  • Recruiting efforts restricted to college campuses;
  • Required disclosures of dates of birth or graduation dates on job applications;
  • Requirements that applicants have a university e-mail address;
  • Forced retirement policies; and
  • Workplace cultures that tolerate age-based slurs and harassment.

Retirement a “Fluid Concept”

A 2017 research brief on Rand Corporation’s American Working Conditions Survey calls retirement “a fluid concept” and notes that more than half of people aged 50 and older who weren’t working and not searching for work said they would work in the future if the right opportunity came along. The research also found that 39 percent of workers aged 65 and older who were employed had previously been retired.

The research brief notes that there are various ways to keep older workers engaged and even coax them out of retirement. The brief says older jobseekers are less likely than younger jobseekers to rate benefits such as dental insurance, life insurance, or paid time off as essential or very important. What was more important to the older jobseekers was “having some control over how they do their work, the ability to set their own pace, and the physical demands of the job.”

The research notes that working conditions are important in “unleashing the substantial work potential of retired workers or those close to retirement.” The research recommends keeping older workers engaged by “giving them control over when and how they do their work, accommodating their changing physical capacities, and improving their connection with coworkers.”