Retirement, delayed more firms keep older workers, lure back retirees gas house gorillas

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The CEO of Richmond, Va.-based St. Mary’s Hospital, a sister division and next-door neighbor to Mandel’s practice, asked if he’d be interested in a job as the facility’s medical director for care management. He would advise doctors on dilemmas such as whether Medicare patients should be admitted to the hospital overnight for observation or longer term.

Faced with a wave of Baby Boomer retirements and a worsening labor shortage, many employers are trying to hold on to their older workers, persuade some to return after retirement and even recruit those retired from other companies. They’re offering flexible arrangements that include part-time schedules and phased retirements that gradually reduce hours. And they’re often receptive to work-at-home set-ups.

Older workers are often branded as burned out and not technically savvy, says Peter Cappelli, a management professor at the Wharton School in Philadelphia. In fact, he says, they have lower rates of absenteeism, less turnover, better job performance and adapt well to new technology. More firms accommodate older workers

Many firms are weighing such policies. “I don’t know of a single company that isn’t trying to retain older workers more actively,” says Alexander Alonso, chief knowledge officer for the Society for Human Resource Management, an Alexandria, Va.-based trade group for HR professionals.

The efforts are pronounced in industries with large shares of workers approaching retirement age, including health care, manufacturing, insurance, accounting and engineering. To address worker shortages, 35% of manufacturers encourage potential retirees to stay on, according to a 2018 survey by the National Association of Manufacturers. Americans are working longer

Since a growing portion of workers are putting off retirement, the companies have a ready labor pool. More than half of Americans expect to work past age 65 or don’t plan to retire, according to the Transamerica survey. They’re healthier and living longer. And many need the extra income after enduring long layoffs in the recession, James says. Also, the Social Security retirement age has been rising. About 20% of Americans 65 and over are working or looking for a job, up from 15.4% in 2006, according to the Labor Department and AARP.

Mandel, the Richmond doctor, was approached about the medical director position as part of an initiative by the Bon Secours Virginia Health System, the parent company of both his practice and St. Mary’s Hospital. For years, the non-profit has asked many retiring nurses and pharmacists if they wanted to work part-time, and about a year ago it expanded the offer to workers in all occupations, says Jim Godwin, Bon Secours’ vice president of human resources.

Such efforts also help companies transfer decades of knowledge to the next generation of workers. Furniture company Herman Miller allows employees to phase in retirement by paring back hours over six months to two years while they mentor their successors and do special projects. Some retirees are coming back

Other companies are luring retirees back to the office. At Michelin North America, based in Greenville, S.C., 40% of employees are eligible to retire each year. So the company launched a Returning Retirees Program that employs 160 former workers in part-time roles.

Mark King, 58, a former human resources and labor relations manager, retired to Charleston, S.C., last July for about four months, spending his days running, biking and kayaking. But “I missed being around people to the extent I was before,” he says. So he accepted the company’s offer for a three-month gig transitioning employees of one subsidiary that was sold and a second that was combined with another firm in a joint venture. For the next year, he’ll oversee talks with a union ahead of contract negotiations.

Marquis Yachts of Pulaski, Wis., gets an average five to 10 applications for each of its 25 job openings, down from about 30 several years ago. Recently, the yacht maker sent 300 postcards to former employees, inviting them to come back part time. Ten were hired, including two retirees.

Some companies are bringing on workers retired from other firms. In insurance, 25% of the workforce is near retirement age but only 4% of Millennials have expressed interest in the field, according to studies by McKinsey, the management consulting firm, and The Hartford, an insurance company.

One of the customer service reps, Demeta Draughon, 54, of Gun Barrel City, Texas, retired briefly when she was laid off from her insurance job in Dallas three years ago. She didn’t want to work full time or face another 90-minute commute, especially since she and her husband have a healthy nest egg and retirement benefits and their house is paid off. But, she says, “I couldn’t just sit and do nothing.”