How to support workers through ‘unretirement’

Inflation in the UK has reached 9.4%, a 40-year high. This is pushed up the price of essential goods, and therefore created a cost of living crisis.

This squeeze on individual’s finances is not only affecting those in employment – UK wages are actually declining at the fastest rate on record due to rising inflation – but it is also impacting older, retired workers, and it is pushing them to seek a return to work.

Figures from the Office of National Statistics show that are more people aged 50 and older in work or looking for work now, than they were in early 2020. The Guardian reported that economic activity for men over 65 increased 8.5% during 2022; it rose 6.8% for women aged 65 and over in or looking for work.

But this so-called ‘unretirement’ trend is not just a UK phenomenon – remember the US and the rest of Europe are also experiencing sky-high inflation.

Research by retirement experts Lottie identified a 200% increase in Google searches for ‘work for retirees’ in Europe in the last year, as well as a 56% increase in ‘returning to work after retiring in the US.

To find out why this economic uncertainty is pushing older workers to re-seek employment,  UNLEASH decided to speak to HR and retirement experts.

Inside the causes of ‘unretirement’

De-biasing hiring startup Applied’s CEO Khyati Sundaram notes that “‘unretirement’ isn’t an entirely new phenomenon,… but the cost of living crisis has no doubt accelerated the trend”.

She adds: “Skyrocketing inflation means that, for many, pensions no longer support the retirement lifestyle they’d envisioned”.

Hannah Martin, founder, Talent Ladies Club.

Talented Ladies Club’s founder Hannah Martin adds that the cost of living crisis has a role, “but there’s also increased concerns of financial volatility”, especially as a recession looms, “which is forcing people to re-evaluate whether they have enough funds to comfortably to see them through retirement”.

This situation is compounded by the fact that people are living longer. This means “more pension savings are needed and those approaching retirement are more likely to have financially dependent children while at the same time caring for elderly parents”, career transition specialist Renovo‘s managing director Chris Parker tells UNLEASH.

To add to this, a knock on effect of COVID-19 was workers taking early retirement; research by Legal & General found that 1.3 million UK workers did so.

While many did so out of choice, some were actually forced to do so as part of job cuts early into the pandemic, according to Gartner HR’s senior director Piers Hudson.

Chris Parker, managing director, Renovo.

It seems that the pandemic had a particularly negative impact on the financial situation of older people.

Gartner’s research showed that while 53% of Gen Z employees saved enough during COVID-19 lockdowns to make a big life change – the figure was only 28% for Baby Boomers.

Legal & General’s study found that one in three over 50s in work saw their household income decrease during the pandemic. The drop was by an average of £500 per month. The study also found that 68% of older workers felt COVID-19 had a direct impact on their retirement savings.

Ultimately, this means “employees who retired in recent years [are] in a more precarious financial situation”, according to Hudson.

Applied’s Sundaram notes, therefore, returning to work could be a means of “shoring up personal finances in such uncertain times”.

An opportunity to fill talent and skills gaps?

It is incredibly tragic that older workers do not feel financially stable enough to be able to live off their pension pots. This is a real sign that the pension system in the UK, and elsewhere, is broken –  but that is a subject for another day.

Given ‘unretirement’ is a reality, how does the return of older employees to the workplace bring opportunities for employers who may be struggling with labor and skills shortages? What are the benefits of having an age-diverse workplace?

Martin from Talented Ladies Club notes “‘unretirement’ is a golden opportunity for employers, especially at a time when many are struggling to fill roles”.

Dan Brennan, retirement living expert, Lottie.

Dan Brennan, a retirement living expert at Lottie, agrees. The unretirement trend puts employers in a “positive position to hire experienced and skilled employees”, who can “mentor and guide younger members of the team”, thereby “increasing the productivity of your workforce”.

Gartner’s Hudson adds these older workers (or so-called ‘unretireees’) “bring a wealth of knowledge and expertise to help fill talent gaps”, particularly in so-called soft skills like leadership and collaboration.

Stuart Lewis, CEO of a digital community for the over 50s called Rest Less, notes: “Not only do older workers bring specific skills and wisdom to work, but they have rich life experience, which can mean they approach tasks and people in different ways to other age groups.”

Older workers may also be more resilient and better at managing crises than their younger colleagues.

Stuart Lewis, CEO, Rest Less.

Martin states: “They are more likely to have lived through and learned from difficult times”. This makes them “excellent mentors” and means they “can often be a calming influence on a workplace”.

This resilience means that companies and HR teams must not assume that ‘unretirees’ are not tech-savvy or are against learning to use new technologies.

“Forget the idea that older people are too fixed in their ways…to pick up news ways of workers”, declares Martin.

Instead, the fact they will have “lived through many changes during their career”, means this demographic “can usually adapt well to new… technology”.

Sundaram concludes: “For employers who are looking for new perspectives and innovative solutions to fill vacancies and ride out a tough economic climate, ex-retirees could well prove to be invaluable members of the team”.

Piers Hudson, senior director, HR, Gartner.

In addition, while it may seem like older workers are only a short-term bet as they will keen to retire again as soon as they feel financially secure, this is not necessarily true.

Hudson from Gartner shares that the unretirement trend “could also help provide stability to organizations during what is a chaotic period.

These workers are less likely to be part of the ‘Great Resignation’ trend and therefore offer longevity”. So hiring older workers could actually help with “lowering employer turnover rates”, as noted by Lottie’s Brennan.

This is supported by data. Lattice found that Gen Z and millennials are leading the ‘Great Resignation’ – with 66% of Gen Z in the US and 69% in the UK looking for new jobs (this declined to 59% in the US and 56% in the UK for younger millennials.

Whereas just 23% of Baby Boomers in the US, and 52% in the UK said the same. In fact, 55% of  Boomers said they weren’t actively looking or open to a new job in the US – the stat was 33% for the UK.

Three priorities to attract older workers

Now that we’ve proven that having age-diverse workforces are beneficial for employers (as well as individuals and their development), what must organizations do to encourage those considering unretirement to work for them, rather than a competitor?

Flexibility is crucial

The first, and most important thing, is to embrace flexibility.

Gemma Dale, lecturer, Liverpool John Moores University.

Dr Emily Andrews, deputy director for work at the Centre for Ageing Better tells UNLEASH: “Research consistently shows that flexible working is a key change that would attract more older workers…to return to work.

“It can help those who are managing caring responsibilities [or] dealing with a health condition”.

Lottie’s Brennan agrees that work-life balance, and flexible hours are a top priority for ‘unretirees’.

Employers should therefore consider offering part-time work, job shares, and flexible contracts for only part of the world if they want to attract these older workers, according to Liverpool John Moores University business lecturer Gemma Dale.

Building age-inclusive workplaces

The second way to attract older workers to your organization is to make sure you have an inclusive workplace, which is free of biases not just based on gender and race, but also age.

Rest Less’ Lewis notes that while many businesses are focusing on having a gender-inclusive workplace, “there is still a long way to go before age inclusivity in the workplace is thought of in the same way”.

But employers who see ‘unretirees’ as part of the solution to the ‘Great Resignation’ should start building age inclusive diversity and inclusion policies, according to Lewis.

For instance, organizations could tweak their flexible working policy so it works for those who need to care for elderly partners. They could also ensure that they have policies around menopause, as well as around pregnancy health.

Khyati Sundaram, CEO of Applied.

Another element of this is de-biasing hiring. This starts with using “age-neutral language” in job adverts, according to Dr Andrews, while Lewis states that while many anti-bias training covers gender and ethnicity, there is a real gap around age.

“While leadership might have the best of intentions, if recruitment teams and hiring managers have not had specific training on how to lead age inclusive recruitment practice”, then ageism creeps back in.

Applied’s Sundaram adds part of the issue is that companies focus on “culture-fit”, rather than “role-fit”.

“Hiring based on merit makes for more inclusive company culture by taking tokenism out of the equation, and encouraging mutual respect amongst colleagues.”

Think about upskilling

The third and final approach UNLEASH’s panel of experts identified was opportunities for upskilling. Yes, ‘unretirees’ bring a lot of skills and experience, but they also want the opportunity to grow and develop in the workplace.

Dr Emily Andrews, deputy director for work, the Centre for Ageing Better

Dr Andrews notes that older workers are “looking for the same from employment as their younger colleagues; to be given the opportunity to make a meaningful contribution”.

While ‘unretirees’ may not be leading the ‘Great Resignation’, if they don’t receive the right career development, they may look elsewhere.

Lottie’s Brennan notes that “career development boosts employee motivation, and it is just as important for older workers, as it is for those starting out in their careers”.

Businesses ultimately benefit from having employees up-to-date on the latest, important skills.

Lots of food for thought for companies grappling with a looming recession and the ‘Great Resignation’ on how to diversify your workforce not just around gender or race, but also age.

The world’s HR conference and expo is back! Don’t miss out on UNLEASH World in Paris this October. More here.