Every employee needs something a little different to do their best work. That was our thesis when we broke part-time employees down into five categories and provided management tips for each, based on Federal Reserve survey data on why people say they work part-time as opposed to full-time. Over a series of posts, we’re going to take a deeper dive into each category and explore how managers can better manage, motivate, and accommodate each type of part-time employee.
In this post, we’re going to cover staff who continue to work part-time in retirement.
The retiree workforce
There’s no question that retirement as we know it is changing, with more and more seniors working past the age of 65. The Federal Reserve’s Economic Well-being Report found that 16% of surveyed part-time employees say they’re retired from their original careers. Another survey from the American Association of Retired Persons (AARP) found that half of workers above 60 plan to work at least another ten years, while 20% expect to never retire. The McKinsey Global Institute reports that 44% of American seniors have worked a gig economy job. All in all, the Bureau of Labor Statistics predicts that the labor force participation rate for 65 to 74-year-olds will hit 32% by 2022, compared to 20% in 2002.
In our previous analysis of retirees in the gig economy, it became clear that financial pressure is the biggest reason seniors are working longer. A combination of disappearing pensions, low retirement savings, and increased healthcare needs mean that today’s seniors have to postpone full retirement in order to maintain their current lifestyles.
However, many seniors say they continue working by choice. While most would assume older workers can’t wait to kick back in retirement, many find they miss the activity and social interaction that comes with work. Sandra McPeak, a Wells Fargo investment director who works with several retirement-age clients, notes that many of her clients choose to unretire. “After a while, they are drumming their fingers. They feel out of it. They don't feel engaged. They feel like they aren't contributing."
Part-time work makes perfect sense for seniors facing financial strain, the prospect of boredom in retirement, or some combination of the two. The flexible nature of the work allows them to customize their schedule to changing financial needs and ease their way into a life without work -- plus the activity and relationships that come with it -- rather than stopping all at once.
Managing retirees starts with understanding
It’s crucial you understand what retirees are looking for out of a job with your company if you’re going to manage them effectively. The New York Times reports that retirement-age workers are in high demand right now due to their high experience and well-developed skill sets, combined with the difficulties of hiring in a tight labor market. These people have options, and may be willing to walk if your job isn’t delivering the experience they want. Below are a few factors to consider.
Unique finances mean unique scheduling needs
As we discussed above, many retirees seek part-time employment because they need supplemental income. However, there’s a caveat. Workers who have started collecting social security before the full retirement age -- 66 for those born before 1955 and 67 for those born after -- can only earn $17,040 in a year before their social security payments are reduced. So, retired part-time staff below the full retirement age may want a cap on the number of hours they work to ensure they don’t go over the limit.
Once a retired part-time employee is beyond the full retirement age, their preferred schedule will depend on their income needs and how much they feel they can contribute. We recommend talking to them on an individual basis to find an arrangement that works for both sides.
Jobs with human connection
A recent study of unretired workers by the RAND Corporation found that seniors who jump back into the workforce look for jobs they consider meaningful. That’ll mean something different for each individual, but RAND’s findings suggest that many retirees want a job where they can connect directly with people and use their unique expertise to help them. For instance, the study includes interviews with one 82-year-old former police officer and school administrator who teaches classes for adults on politics and current events -- he cites the chance to mentor others as a key motivator.
Bill Coleman is a Vice President of Research and Employe Certification at Retirementjobs.com, a site that helps businesses hire employees aged 50 and above. He agrees that social interaction is key for retirement-age workers, and believes that this desire, combined with their empathy and communication skills, makes them perfect for customer service roles. According to him, retirees are finding success in that field across industries like retail, healthcare, and hospitality.
If your business has open customer service roles or other positions that require human interaction, retirees could be the perfect candidates to take them on.
Right now, the average retirement age in the United States is 63, meaning many retirees aren’t yet eligible for Medicare. That, combined with the Affordable Care Act penalty for those who don’t purchase qualifying health insurance, means retirees pursuing a part-time job will likely see health benefits as a huge factor in deciding where to work.
If your company can offer health insurance to part-time staff, it’ll likely be a significant selling point and retention booster for retirees.
Maximize their strengths
Part-time retirees can offer a tremendous number of benefits to your company. They have well-honed skill sets, years of experience in the workplace, and value the relationships a job can bring. If you can find ways to put these traits to good use and accommodate their unique needs, retirees can become some of your most valuable employees.