Why Are Retirees Going Back to Work?
In October of 2021, more than 2.5% of retired workers in the United States made the decision to return to work, according to Nick Bunker, the Director of Economic Research at Indeed Hiring Lab. This marked the highest percentage to date during the pandemic. Between vaccination rates, labor shortages, and increased wages, there is no surprise that we are seeing such a number of retirees returning to work.
The Effects of Increased Vaccination Rates
Increased vaccination rates are one of the more prominent factors leading to retirees returning to the office. According to data presented by the Center for Disease Control and Prevention, or the CDC, approximately 195.3 million people in the US are now fully vaccinated. That number equates to roughly 59% of the population.
As of Oct. 11, 84% of Americans over the age of 65 were fully vaccinated. These increased rates are the primary factor driving retirees back into the workforce. There were also many grandparents or older Americans who took on childcare responsibilities amidst the pandemic. These individuals are likely more available now that schools have resumed in-person learning. Sarah House, Senior Economist with Wells Fargo says, “I think the health risks and then the financial improvement in terms of the balance sheet were a really potent combination that supported these early retirements.”
The initial fear of COVID had led to some 3 million workers’ early retirement. After combining these numbers we begin to see the correlation between vaccination rates and this return-to-work trend. As vaccination rates continue to surge we are likely to see more and more retired workers returning to the office.
The Impact of Looming Labor Shortages
Currently, there are more open positions than there are candidates. Employers are engaged in a hiring frenzy that boasted an increase of 7.4% from October to November, which is an increase of 5.7% over pre-COVID rates. This has led to a surplus of available positions for workers seeking employment, however, it has had the inverse effect on organizations at large. With all of the available positions and a lack of candidates to fill them, the market now bears witness to a concerning labor shortage.
According to a ManpowerGroup survey, the U.S. talent shortage has grown by more than three times over the last ten years. 69% of employers are finding it difficult to fill all of their needed positions. This is up from 14% in 2010. Korn Ferry suggests that by 2030, we may very well be looking at a worker shortage of upwards of 85 million people globally.
This shortage concern has led employers to initiate new strategies that are targeted toward bringing in more people and at times bringing previous employees out of retirement. One major strategy is increased wages and competitive benefits.
Many organizations are offering more competitive wages in hopes of recruiting
new talent. Willis Towers Watson found that companies are projecting an average salary increase of 3.0% in 2022 for management, executives, professional employees, as well as support staff. This would mark an increase over the previously recorded 2.7% from this year.
They also found that high-tech and pharmaceutical companies are projecting the greatest increase at 3.1%, while health care, media, and financial services followed closely behind with 3.0%.
There is no doubt that these higher wages are attracting retirees who feel they still have potential in their career endeavors. Employers will also be more likely to fill roles with retirees in order to fill more needed positions and retain a full staff. Many of those positions even offer higher than typical rates, which even further draws the interest of those who have chosen to retire previously.
How Does This Affect Employers?
Employers now have concerns over how to hire enough employees to fill all necessary roles, while still coming in under payroll. This task is not easy and does require many organizations to rethink their strategies for bringing on new employees.
Many organizations will offer benefits packages to contend with competition and look to entice employment with ancillary benefits as well. But what about retirees? With many retired employees returning to the workforce, employers are presented with a new opportunity should they play their cards right.
Aside from the urgent need for filling necessary roles, many organizations may be wondering why they should hire retirees, especially those who have never worked for them before. While retirees may be accustomed to older technology or even are a bit out of practice, they certainly offer much value to a team.
To start, retirees have years of experience and understand what a fully fleshed-out career entails. While technology has changed, and some retirees may need to be brought up to speed, they understand the work itself.
Most older workers have developed and gained a wide variety of skills that are beneficial in the workplace. This could be networking skills, understanding of management, marketing, finance as well as how they all work together.
According to Forbes, studies have shown that diversity of age improves organizational performance as well as productivity in a positive manner.
Take a designer for instance. A seasoned designer understands the professional process as well as the nuances of creating a functional and effective design. Now they may need a refresher on how to render their designs on a tablet as opposed to paper, however, their designs themselves reflect their years of practice.
This also allows these designers to work with younger employees who can learn from their years of experience. This can set up a form of mentorship that allows the previously retired worker to teach these younger employees the proper design techniques while the younger employees can help them to become more accustomed to modern technology in return. This symbiotic relationship offers an effective means of filling employment gaps by effectively hiring retirees, as well as turning the opportunity itself into an opportunity for growth and improvement.
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