The spiraling cost of living, the stuttering stock market, the rapid rise in interest rates, which are at a 40-year high, and a tight hiring environment has, as we know, led to a lot of flux within the jobs market. However, there is one big change happening that is only starting to gain traction recently, and that is the return of retired workers to the workforce.
It is a phenomenon that is being called “unretiring”, and in fact, an estimated 1.5 million workers have re-entered the labor market, according to recent Labor Department data.
The Federal Reserve Bank of St. Louis estimates that 2.4 million additional Americans retired during the first 18 months of the pandemic as Covid-related concerns and company schemes pushed them towards early retirement. However, as costs continue to rise, many retirees are now returning to the workforce, while almost half of those who had planned to retire in 2022 are taking another look at their options.
A recent survey from Quicken shows that 48% of those who reach retirement age this year are reconsidering their options, while an additional 25% of 58-74 year olds who were not planning on retiring this year are already planning to work longer and increase their 401K contribution – with 65% admitting that rising inflation costs is their motivating factor.
For those on a fixed income returning to the workforce may be a primarily monetary concern, the think tank and consultancy group Age Wave in collaboration with Edward Jones found that there may be some behavioral factors at play.
The four pillars of retirement – health, family, purpose and finance – are all equally as important to the retirees and non-retirees surveyed, and impact their decision to return to the workforce. Yet how exactly they play into each other is dependent on personal circumstances which will determine the level at which the retiree wants to return to work.
For example, a health crisis might require additional finance, while a return to work might result in a heightened sense of purpose with subsequent increased income facilitating extra family time.
While retirement ages continue to rise among US workers (jumping from 60 to 65 over the past 25 years), Age Wave found that 59% of retirees want to work in some way. In fact, 22% want part-time work, while 19% said they hope to cycle between work and leisure – meaning a semi-retired labor force contingent is here to stay.
For those planning to push out their retirement, employers need to focus on highlighting their retirement schemes, educating workers and encouraging them to save as much as possible while still in full time employment. While for those returning to the workplace, employers need to remain open to part time contracts, remote working and looking past traditional skill sets to see added value that will contribute in part time roles.
More good news for older workers is that they make great employees. The Society for Human Resource Management reports that workers over 50 show greater job engagement over younger employers, and 71% of employers also said that older workers show greater professionalism. Additionally, a 2015 AARP study found that older workers have lower turnover rates which helps cut down on overall costs to train new employees.
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