Companies Renew Efforts to Retain, Hire Older Workers

 

For many, the oft-lamented worker shortage, which some say is shorthand for the complicated reality of the pandemic-era labor force, has led to a renewed focus on workers older than age 55.

Charlotte Flores, SHRM-CP, vice president of HR at BH Cos., a national apartment management, development and design firm, is leading her company's hiring efforts, which stalled about two years ago during the onset of the pandemic.

The company had to let many older workers go due to its decision to outsource some functions. It was also forced to make other pandemic-related workforce reductions.

"These employees are valuable because they are seasoned, and that's not always easy to find today," Flores said. "If you have someone with 20 to 30 years of property management experience, who wouldn't want to keep that kind of talent?"

In the past year, BH has rehired individuals from that group for positions such as community managers, maintenance and accounting.

"The average tenure for some of our employees is around 2.5 years, so this makes their experience even more valuable," Flores said.

Flores said 35 percent of the rehires since 2020 are people over the age of 40 and 20 percent are over the age of 50. About one-quarter of the company's overall workforce is over 50 years old.

That cohort has had a significant impact on the prolonged Great Resignation, which in November saw 4.5 million Americans quit their jobs—pushing the country's quit rate to a record high. (Additionally, it created almost 11 million job openings in the U.S., a near-record-high level. These numbers are roughly the same for January, the most recent month for which information is available.)

In November 2021, 3.6 million more Americans left the labor force and said they didn't want a job than did so in November 2019. Americans ages 55 and older accounted for a whopping 90 percent of that increase, according to Aaron Sojourner, a labor economist and professor at the University of Minnesota.

Nearly 70 percent of the 5 million people who have left the labor force during the pandemic are older than 55, according to researchers from Goldman Sachs, and many of them aren't looking to return.

Companies and their HR teams are working to address this predicament by understanding the reasons for seniors' departures, retaining the older workers they do have and recruiting potentially available older workers—including those who they previously employed.

There is a compelling case for companies to employ workers ages 55 and older. Their job experience and ability to serve as mentors has proved invaluable at most employers because these are traits that must be accrued over time and for which younger employees cannot be trained.

The pandemic created many unprecedented circumstances for companies and their workforces. Among them is the stock market's remarkable performance during the pandemic. Older, wise investors reaped big gains, enough for them to believe they could retire comfortably, said HR professionals, employment consultants and economists.

In January, ADP Chief Economist Nela Richardson said the strong stock market, along with soaring home prices, "has given some higher-income people options," CNN reported. "We already saw a large portion of the Boomer workforce retiring. And they're in a better position now [to do so]."

For other older workers, health and safety reasons, the demands of their jobs, subsequent burnout, and personal priorities were reason enough to resign. Their adult children are relying on them more than ever to help grandchildren with remote school and after-school care.

Still others found that remote work "wasn't for them," using it as a clinching reason to retire.

Retirements tend to be "stickier" than other labor force exits, research from the Kansas City Fed showed, though they can be drawn back into the workforce. But the "unretirement" rate fell significantly during the pandemic, exacerbating the shortage of workers.

Even so, researchers expect that an improving pandemic situation, increased vaccination rates and rising wages will spur more older workers to return to the labor force. The unretirement rate fell to just over 2 percent early in the pandemic but in recent months has ticked up to around 2.6 percent, according to Indeed. That's still off from the pre-pandemic rate of around 3 percent.

To be sure, some companies have been raising wages to attract and retain staff. Workers are set to see the biggest wage increases in more than a decade this year, with employers setting aside an average of 3.9 percent of total payroll for raises, according to a Conference Board report.

Some businesses also offer signing bonuses to get workers in the door. But economists aren't sure whether these incentives are here to stay and will improve conditions for workers in the long term.

At BH Cos., Flores said, older workers aren't looking for trendy benefits like pet insurance or shorter workweeks.

"They want to be supported on things like elder care for their parents," she said. "Of course, there is a financial and employment stability component, but they also want the value of their experience recognized. They want to be acknowledged for their dedication and given opportunities to do meaningful work. They focus on their core values."

BH Cos. introduced a new benefit a couple of years ago, offering employees who had worked there for seven years a four-week paid leave as a sabbatical.

"We wanted to reward that tenure—that dedication and commitment," Flores said. Those older employees who had been hired back in the past two years were credited with their overall time at the company and earned that sabbatical.

Samantha Holy, vice president and chief HR officer at LEO A DALY, a global planning, architecture, engineering and interiors firm based in Houston, said workers today—whether 55 and older or mid- or early-career—generally are looking for the same benefits in their jobs: flexibility in scheduling, meaningful work and good projects that help make a difference in their communities.

She said identifying older, available workers who want to return to the workforce and appealing to them is "a challenging but exciting opportunity. We must get creative about how we can sell our value proposition so that candidates want to work with us so that we become an employer of choice.

"The opportunity to be mentors speaks to a lot of older employees," Holy added. "Senior workers are a great resource for providing mentorships within the company on projects such as design, architecture and planning. Mentoring is becoming a cultural expectation. It's so important to have the right people staffed on the right projects."

Holy said mentoring relationships don't have to be overly formal.

"It can be an informal arrangement," she said. "It doesn't need a lot of structure. Mentors can simply apply themselves effectively by asking, 'How are [younger employees on my team] watching me?' and that makes them, as mentors, an influential part of the team.

"[Older, recently retired workers] might have enjoyed their time off, but now they tell us, 'I miss work.' We can also reach back out to employees who left us and see if they want to come back, perhaps on a part-time basis or other arrangements that satisfy their lifestyle needs."

Harley Lippman, founder and CEO of Genesis 10, an IT talent recruiter, said his clients are facing retirements.

"With COVID, many employees have become more reflective and are reviewing what is truly important to them in life," Lippman said. "They are now more focused on wanting to work to live rather than live to work. People feel that life is fragile. Employees want to spend time enjoying themselves. There has also been a void where people are examining what is meaningful to them and how to establish a purposeful life. There are not that many jobs that give employees the feeling of doing something socially redeeming."

He said employers should be focused on the fundamentals when trying to retain their employees. "Listening to what employees want is particularly necessary," Lippman said. "Overall, upper management in many firms tend not to engage employees in these types of dialogues. You have to check in on your employees and make sure they feel they are not taken for granted."

Paul Rubenstein, chief people officer at Visier, an analytics firm that helps businesses plan for the future, said more resignations for older employees shows "just how disruptive and abnormal last year has been. The pandemic has driven workers to prioritize wellness, balance and recognition when searching for a new role.

"Companies must look deeply into the demographics around resignations to find the root cause," Rubenstein continued. "Priorities are changing for all workers, but not in the same way. Early-career workers might love your career development plan, but later-career employees might be looking for different types of flexibility, growth that doesn't involve a promotion, or an extended break to renew or pursue a passion project. Their financial incentives might also change, where health care costs or long-term savings are more important than the early-career employees chasing cash."

Some employers who saw a mass exodus of workers have been able to woo a few older workers back. HR consultant Phyllis Hartman of PGHR Consulting in Pittsburgh said one of her client companies has manufacturing facilities in several states. Many of their employees in their medical components plants were over the age of 50 at the beginning of the pandemic.

"Early on, before vaccines and safety protocols, many employees got the infection," she said. "[The business was] deemed 'essential' and able to operate during some of the shutdown. They had a lot of people who were out sick, limiting production. Four died—all older workers—and two employees recovered from COVID-19 but decided to retire."

Hartman said other employees also chose to retire (some were past retirement age already), and one plant had a 90 percent turnover rate in production workers—due to retirement, health issues and leaving for other jobs.

"Because the company has a large population of older workers, a greater number from that turnover were older workers," she said. "And because they do need skilled production workers, they have asked a few older people to come back. [When doing so], the company talked about safety and appealed to their sense of loyalty. This company has done a very good job of treating employees very well and they have a strong level of loyalty and engagement."

One or two have returned, Hartman said, and some from their management group who had planned on retiring have delayed their exit.

Jeanniey Walden, workplace expert and chief innovation and marketing officer at DailyPay, an on-demand pay platform, said retirements and resignations have been most prolific in health care. The average age of registered nurses in America is 51.

"For many, especially those 55-plus, the deep psychological impact of the ongoing pandemic is driving experienced and seasoned RNs to leave their jobs," Walden said.

According to Nursing Solutions Inc.'s (NSI's) National Health Care Retention & RN Staffing Report, turnover for staff RNs has risen to 18.7 percent.

Further NSI research shows that the average hospital has turned over about 80 percent of its nursing staff and 90 percent of its overall workforce in the past five years—many in the 55-and-older demographic, costing hospitals and health care providers millions of dollars.

"For older health care employees, burnout is a major issue," Walden said. "They are physically and mentally worn out from being on the front lines of the terrible and unrelenting pandemic. With high turnover, it's often the experienced employees who take on extra shifts and longer hours in an effort to help their communities."

With the stock market's performance in 2022 hard to predict, older workers might again need to draw a salary.

Stacey Berk, founder and managing consultant at Expand HR Consulting in Rockville, Md., said companies should consider which jobs have the greatest flexibility for part-time or three-quarters-time scheduling.

"Alternative work arrangements should be creative and normalized and not the exception anymore," she said. "Companies could consider offering 100-percent-paid benefits to part-time employees. Offer unique health and welfare benefits and policies to attract older workers—such as annual financial planning; additional concierge benefits like long-term-care insurance; vision, dental and pet insurance—and cover secondary generations like grandchildren. Caregiver support is a big trend."

A Stanford professor has estimated that, on average, employees value hybrid work about the same as a 10 percent pay raise.

"Firms not offering this are missing out on a highly effective way to retain and recruit staff," economics professor Nicholas Broom said.

Paul Bergeron is a freelance writer based in Herndon, Va.