Employers are desperate for workers in the post-lockdown economy. Wages are being raised and benefits more generous, yet finding workers remains a struggle.
The U.S. Chamber of Commerce in its Quantifying the Nation’s Workforce Crisis – State of American Business 2022 Update, notes that “The most critical and widespread challenge facing businesses is the inability to hire qualified workers for open jobs they need to fill.”
Many factors lie behind the difficulties employers face in meeting their workforce needs. But a partial solution to the hiring challenge could come from a vastly underappreciated resource: America’s more than 15 million retirees between the ages 55 and 70. Yes, that’s right. Odds are that many retirees with skill and experience will want to return to the job market in coming months.
“We’ll probably see that soon as Omicron loosens its grip,” says Geoffrey Sanzenbacher, economist at Boston College and research fellow at the Center for Retirement Research at Boston College.
People like Brian Meyer, age 67. He retired in 2015 after three decades as a lobbyist working on government affairs for trade and professional organizations in the Washington, D.C., area. Like many retirees he wanted a break from his current career, but he also anticipated getting a job later on, preferably part time. “I would have a little change of scenery, a different challenge, and slow down a bit,” he says.
In other words, Meyer had an unretirement mind-set. As is often the case with plans, life intervened, including family health issues that needed his attention. He found himself “dabbling” and “experimenting” at a number of jobs. He tried his hand as a consultant, he was an election judge, he did volunteer work and, right before the pandemic, held a part-time job at an independent living community in Silver Spring, Md. “I consider this time as a long-term sabbatical,” he says.
He and his family hunkered down during the pandemic. He doesn’t think they even enjoyed takeout until they had their first vaccine shot. He continued to look for an opportunity to unretire. His wife is a member of the Hearing Loss Association of America and she saw a listing from the Rockville, Md. headquartered organization for a part-time position. He got the job and started in early January 2022. Meyer works remotely 20 hours a week as a public policy associate dealing with regulatory and legislative affairs.
“Now I feel good,” he says. “I am back in the game the way I want to be, part-time and dealing with issues that are intellectually stimulating and important.”
Meyer’s desire to unretire isn’t uncommon. The word “retirement” still suggests in popular conversation the time of life for full-time leisure. Yet one of the strongest labor market changes in recent decades has been the embrace of work well into the retirement years, sometimes for income, sometimes for purpose, and usually a combination of the two.
Many of these workers were retired at one time, but they eventually returned to the workforce (more like Meyer’s sabbatical). Some 40% of Americans aged 65 and older who were employed before the pandemic were retired at some time, according to the 2019 Rand Corporation research brief, The American Working Conditions Survey Finds That Nearly Half of Retirees Would Return to Work.
Among the unretired was Charles Squires, age 80. He worked for nearly half a century for Robert Half International, the California-based company that specializes in finding talent for accounting, administration, information technology and other occupations. Squire’s specialty was in accounting. He retired from full-time work 20 years ago, but he soon returned part time at Robert Half until Covid. Golf and leisure didn’t suit him. Among his portfolio of activities inside and outside the company, he particularly enjoyed mentoring young people.
“I have experience and skill. Just didn’t want to work full time,” he says. “The other side of the coin is what are you doing to give back and make the most of your life.”
The share of retirees in the U.S. population increased at a faster than normal pace during the pandemic and it’s a major reason why management is short workers. But a close look at the data suggests the increase has been largely driven by a decline in unretirements, according to a 2021 report by senior economist Jun Nie and data engineer Shu-Kuei X. Yang at the Federal Reserve Bank of Kansas City. They speculate that the pandemic pushed retirees to postpone their return-to-work plans. They expect more retirees will go back to work as pandemic associated health risks fade, especially for younger retirees. “There has been some recovery in terms of the unretiring pace, but still a lot of people that can return to work,” says Nie in a recent interview. “We do see more people returning to the labor force.”
A similar conclusion was reached by economist Sanzenbacher in a forthcoming report for the Center for Retirement Research at Boston College. He notes that the rate of unretirement has averaged just over 6% over the past four decades. But delving deeper into the data he found that unretirement was sensitive to a state’s job opening rate. For example, a one-percentage-point increase year-over-year in a state’s job opening rate is associated with an 0.5 percentage-point hike in unretirements.
The national job opening rate in February is about 3.6 percentage points above its two-decade average, so it’s reasonable to assume that 1.9 percentage point more workers—or 300,000–would unretire, he calculates. That would be more than typical in an economic recovery and would close to about one-tenth of February’s 4-million worker shortage. “Ten percent of the shortage isn’t trivial,” he says in an interview. He’s right.
To be sure, employers will have to get past their historic prejudice against hiring older workers. Ageism and age discrimination are deeply entrenched. In 2020, 78% of older workers had seen or experienced age discrimination in the workplace, writes Lori Trawinski, director, finance and employment at the AARP Public Policy Institute in a recent article in Gerontological Today.
That said, there’s nothing like the need for workers to break down traditional hiring barriers. Rather than depending on sudden enlightenment, the powerful economic forces of supply and demand could force employers to realize they can continue to fail their customers, or they can race to embrace experienced unretirees. Sure seems like a simple decision, doesn’t it?