Everyone has heard we are in a growth market and there are too few people for all the jobs that need to be filled…at least in many parts of the country. This has led to a labor shortage with very few solutions. While it is great to train a new and younger workforce, this takes time and money…both of which most companies don’t have much of these days. So they are looking at other alternatives that offer a quicker solution at a reasonable cost.
One of the most desirable immediate options is to hire the retired, or semi-retired. This is a huge workforce and can offer many opportunities for companies in a relatively short time frame. That’s right, the retired are being hunted to come out of retirement to fill the gaps that are created by a shortage in the workforce. And most companies are welcoming them back with open arms since they are generally a well-trained group with a great work ethic.
For example, Montefiore is a large hospital located in the Bronx, N.Y. It is just one of many organizations developing informal programs to rehire retired employees to supplement their workforce. When this was first introduced, administrators noticed that half of its nurses were nearing the age of 50. While they didn’t have an immediate nursing shortage, they wanted to be prepared and prevent one in the future. Now they routinely bring back retired nurses on a freelance basis. It’s been good for the hospital and good for the retirees. Now the retirees have a way to also supplement their pensions.
As reported in The New York Times in an article titled “In a Tight Labor Market, Retirees Fill Gaps Their Previous Employers Can’t,” not every person who retires is ready to do so—and not every employer is ready to let them go. In a tight labor market, firms find recent retirees increasingly attractive.
“This has become more common than at any other time since the Great Recession,” says Kathleen Christensen, who funds research on aging and the American labor market at the Alfred P. Sloan Foundation.
But health care isn’t the only place there is a shortage of qualified workers, there’s a shortage in many other industries. There are definite shortages in construction and transportation as well, which is rapidly changing the perspective on hiring older workers. When there aren’t enough younger workers to fill these must needed positions, it is important to look at other options meet the needs of these businesses.
For example, one large northeastern power company is also bringing back retirees and using their years of experience to train younger employees. One technique this company’s leadership team uses as a competitive strategy is to deliberately stay in touch with retirees, allowing some of them to work part time and hiring others as needed for short term projects. Since they are brought back as contractors, not employees, they continue to receive their pensions.
Another situation is in the transportation industry. The boom in online shopping has had a major impact on delivery services. UPS has organized a program to recruit retirees. Management sought to bring back retired workers and has also tapped the older workers in construction to help with new facilities that are being built.
The bottom line is simple, when you retire, don’t be surprised if you’re asked to come back. With the shortage of qualified workers in the market, companies are trying every means possible to find workers. This is just one of their more creative ways that is gaining momentum.
However, as great as this might be for a retired worker, it is important to keep in mind how this could impact your income, Social Security benefits, and your overall retirement plan. It is very important to sit down with an experienced estate planning attorney to find out how your new life as a freelancer or independent contractor will impact your tax liability, your government benefits, and your estate plan.