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Encore Careers: Bringing Retirees Back on Board

It’s no secret that the past few years of economic downturn have kept many would-be retirees from actually leaving the workforce, spurred by the worry that their savings and 401k plans will no longer sustain them as long as they once believed. Taking it a step further, however, are a surprisingly large number of prospective workers who are coming out of their retirement to reenter the workforce in droves. Whether driven by a need for the economic security of a regular paycheck and benefits, or simply motivated by the desire to keep their skills sharp and in working use, it’s inarguable that the job applicant pool is now comprised of a greater range of ages and skill sets than ever before.

As a result of this shift in the workforce, some more forward-thinking employers are adapting their hiring strategies to account for this new pool of prospective employees, and have even devised special programs and practices to make the best possible use of some of the unique talents and experiences these more seasoned prospects bring to the table. Alternately dubbed “career reentry programs,” “encore careers,” or “returnships,” such programs have been successfully implemented by an array of companies including Goldman Sachs, Bank of America, and MIT.

Below is a look at some of the unique benefits these “returnship” arrangements offer to both employees and employers alike, as well as some tips and suggestions for companies looking to make the most of these new hiring measures.

The Advantage of the Encore
Returnships and reentry programs are company practices that target experienced workers who have left the workforce for any number of reasons (including retirement or the choice to stay home with children) and now wish to return full- or part-time. Unlike their younger, more inexperienced applicant counterparts (such as recent college graduates or those looking to make a complete career change), returning workers are often very well-acquainted with the industries and jobs for which they’re applying. According to Idealist.org, these prospective employees are “on-ramping…not so much looking to launch their career as to jump back in.”

Returnships can provide a win-win employment arrangement for all parties involved. Employees who are returning to work regain the stability of a paycheck and benefits, and enjoy the opportunity to keep their skills fresh and in active use. For employers, these returning applicants offer a separate host of potential benefits, including:

  • A pool of well-qualified employees who already possess a considerable range of skills, expertise, and keen business insight
  • Cost savings on training for these already-experienced employees
  • Maturity of an older and more experienced staff who may be less likely to get involved in office politics and more likely to exercise work habits from the past, such as increased focus and better attendance
  • A workforce that is often willing and able to work within more flexible terms of employment (such as a part-time or contract basis)
  • Greater workplace diversity in terms of age and experience

Preparing Your Business for the Returning Workforce
When considering hiring older employees who are returning to work, it’s important to take a look at your current business and management practices and consider tweaking them to accommodate the potentially different needs of this particular segment of the workforce. A few guidelines to keep in mind for effective management and cost-effective hiring are:

  • Consider what motivates an encore employee: According to an article by Inc. Magazine, “people in the early two-thirds of working lives are focused on mobility, promotion, and upward salary,” whereas “people in the last third are focused on stability, something to do, reasons to be useful, and ways to interact.” These different motivations for working may necessitate a modified management style and incentives. For instance, consider that your returning retirees may prefer benefits such as a flexible schedule or increased autonomy over things like bonus incentives or commission plans.
  • Don’t overlook a retiree’s additional service offerings: Though return-to-workers are often hired for their skills, experience, and expertise, don’t forget that they can also be a valuable resource when it comes to training your less experienced staff members and passing along the wisdom and experience they’ve acquired through additional years in your industry.
  • Don’t assume an older workforce is more expensive: Some employers jump to the conclusion that an older workforce is likely to cost more in terms of health care and benefits. However, that isn’t always the case. Returning retirees typically do use more healthcare, but often have fewer dependents than their younger counterparts. What’s more, according to Inc., is that “research also indicates older workers are more loyal, and less turnover is less cost.”

One other cost-effective way to gain the most from a returning workforce is to consider hiring them on a contract basis, bringing them on and off projects as needed. This arrangement provides the employee and the employer both with an increased degree of flexibility. Using a third-party employer of record service is one effective way to help you hire these retirees as contract employees. Doing so allows you to maintain a flexible workforce and keep your overhead low while still offering these employees a steady paycheck and an array of benefits.