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Coming back strong

iconWhat employers want -- and what seniors can give them. The AARP -- the American Association of Retired Persons -- has a rundown of just why seniors can often fill the bill. Click here.  

Seniors at work:
What retirement?

In this story:

It's a phase

Money matters


(CNN) -- Parts of the United States economy may be in a downturn, but don't look for the trend of companies rehiring retirees to come to a halt.

"There might be more of a need for them," says Anna Rappaport, a consultant to William M. Mercer Inc., a human resources consulting firm.

graphic Do you think seniors are finding a more lasting foothold in the job market these days?

Yeah. Not only is it a tight labor market but there simply are more of them ready to work as the boomers age.
I see them working more now, but can't be sure it's a lasting trend yet.
No. Employers, especially in the info economy, tend to prefer younger staffers, that's not changing soon.
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"Rehiring retirees has targeted people with specific skills or specific knowledge, or to fill in because people are short-staffed. If somebody has laid off a bunch of people or reduced the overall size of its staff, there might be more of a need for extra help in special situations, or a little special expertise on special projects."


Rappaport helped conduct a survey for Mercer of 232 large U.S. employers' hiring policies regarding retirees. The report was released this month. She found a wide range in the extent to which employers retain older workers on staff.

•   The survey found that 83 percent of employers in higher education -- five of six organizations -- have staffs on which at least a a quarter of the workers is older than 50. Next is government, with 50 percent; followed by manufacturing, 38 percent; nonprofit service organizations, 29 percent; and for-profit service organizations, 12 percent.

Higher education is at the head of the class because of the longevity of tenured faculty members, Rappaport says. Government and manufacturing are likely to have traditional retirement plans and policies that encourage long-term employment.

•   While only 9 percent of the employers surveyed said that more than 35 percent of their workers are older than 50, 55 percent said they expect this to be the case 15 years from now.

•   Nearly six in 10 employers reported that they have a policy on rehiring retirees.

•   Of those companies with a retiree rehiring policy, 63 percent said they'll bring them back as part-time or temporary workers, eligible for benefits if they work enough hours. Sixty-one percent said they'll rehire retirees as independent contractors or consultants, making them ineligible for benefits. Another 24 percent said they'll rehire retirees full-time after a waiting period.

"We're often talking about people with specific skills that are relevant to their company," Rappaport says of retiree workers. "If someone has valuable knowledge, companies want to capitalize on that knowledge."


It's a phase

That's a sharp contrast to a few years ago when many companies made older workers feel about as welcome as a tax audit. That attitude still exists in some workplaces, Rappaport says, but low unemployment coupled with an aging work force that tends to continue working later in life has created a new attitude among many employers.

"There's definitely a change taking place," Rappaport says. "I think one of the key elements is we just plain need the talent. If you hire somebody to do projects on an as-needed basis, it's very low-risk. They can have the expertise and use it as they need it, vs. having to pay a full-time employee."

Some companies also are allowing older employees to ease into a phased retirement, rather than quitting work cold-turkey. There's no one definition for this trend so most employers say they have no such policy, but in fact do, Rappaport says. In another survey of employers, for example, only one of 65 employers asked said they had a phased retirement program. But "lots of these people are in fact doing things that accommodate phased retirement," she says.

graphic The AARP, as part of its advocacy program for seniors, has a list of qualities that many employers find and appreciate in seniors. Give it a look.

She defines phased retirement as simply scaling back gradually on a worker's hours and responsibilities until he or she does in fact retire. Others say it's the practice of bringing a retiree back to work in some sort of part-time capacity.

Regardless of whose definition you use, it's clear that many older workers want to work in what have traditionally been years of leisure. A Los Angeles Times poll of 1,589 adults nationwide in October 1999 found that 44 percent of those questioned said they plan to work part-time after reaching retirement age, and 14 percent said they'll work full time. Studies show that some people continue to work because they enjoy staying active, while others do so for the extra income.


Money matters

Thanks to legislation passed by Congress last year, workers 65 to 69 are now able to earn as much as they wish without losing any Social Security benefits as in the past. The old law reduced payments to these workers by $1 for every $3 they made above $17,000.

"I think that will make a huge difference in people's behavior," Rappaport says. "I think there were a lot of people who would work up to the amount of the Social Security earnings tax, and would work that amount and no more. Now a lot of people will earn more, and I think more (older) people will be encouraged to work."

Many who do so will be offered special assignments with their former employer. Two-thirds of the employers responding to a question regarding this in the Mercer survey said this would entail mentoring younger employees and transitioning responsibilities. Another 60 percent described these special assignments as research-and-development projects. And 31 percent said they saw retirees on special assignments being used to conduct training programs.

Rappaport says that companies with jobs that require a repetitive customer service function -- bank tellers, for instance -- may also draw upon retirees to fill in when there are absences.

With the first wave of Baby Boomers turning 55 this year, Rappaport says she sees no end in sight to the retiree rehiring trend.

"The companies are going to find that this is something that works well for them," she says. "As we see the shift toward more individual responsibility for retirement, many people are going to need money. And for some, a better way of life might be not to work as much, or to work on a different basis. I see this continuing."



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Climb to a safe retirement
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Center for Retirement Research at Boston College
William M. Mercer

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