Statistics consistently show older workers retiring rather than taking on part or full-time post-career jobs. A new study reveals that older workers want to continue working at least part-time and are willing to make wage concessions to do so; employers, however, are not offering acceptable work arrangements that make working after retirement desirable.
With the pool of workers within traditional working ages (18-64) expected to shrink dramatically, keeping older workers in the workforce longer would help both companies and national economies. Older workers, however, choose to retire rather than taking on even part-time work. Although one reason may be that older workers prefer not to work any more (a supply-side problem), the alternate possibility is that they want to work but are not finding acceptable job opportunities (a demand-side problem).
To uncover exactly why older workers are not working more, a team of researchers conducted a series of analyses based on survey data from the Vanguard Research Initiative (VRI), which was collected from 2,772 Vanguard account holders 55 years old or older.
They first began with data related to the employment and job search activities of the respondents. This data confirmed previous studies: employment plunged once respondents reached 64 years of age. For example, 83.5% of respondents between the ages of 55 and 59 were employed — 64.1% in career jobs, and 19.4% in bridge jobs (jobs that offer a bridge between career work and full retirement). By contrast, only 32.9% of respondents between the ages of 65 and 69 were employed, 17.3% in career jobs and 15.6% in bridge jobs.
The data also showed that flexibility was at the top of the list of job search criteria (about 40% wanted more flexible hours, and 30% wanted a more flexible schedule). Autonomy was second on the job search criteria list, with 60% of respondents look for jobs with less responsibility or more opportunity to be “my own boss.”
The researchers continued their study with a series of hypothetical strategic survey questions (SSQs) sent to the VRI participants. By presenting respondents with different hypothetical employment conditions, notably on wages and flexibility, the researchers could drill down further into the employment needs and desires of older workers.
The results of the strategic survey questions: older workers were willing to take a wage cut for the opportunity to work part-time. And if that opportunity offered flexible hours, even more older workers were willing to take part-time jobs.
Of particular interest were responses from workers who had stopped working, even for a long time. Although most of them were in their late 60s and 70s, more than 40% were willing to come back to work if wage and scheduling conditions were similar to their last jobs (whether career or bridge). The number increased when flexibility was offered: more than 60% were willing to return to work at jobs with flexible hours.
The survey questions also showed that many workers — 20% for those who retired from their career jobs, and 40% for those who retired from bridge jobs — would have been willing to take wage cuts of at least 10% from their last jobs in order to keep working.
Further statistical analysis confirmed that high retirement numbers did not reflect the desire of older workers, but rather the suitability (or lack thereof) of the jobs being offered to them. Specifically, the analyses found that older workers would prefer to transition to more leisure time, rather than suddenly finding themselves with no job and nothing but hours of leisure. However, according to this analysis, the disadvantages of working part-time under the conditions being offered— for example, when the expense of working part-time did not justify the additional income — force them to choose the sudden retirement route.
This research helps employers (and policy makers) recognize that offering jobs with little flexibility is keeping potential older workers out of the workforce. It also opens up opportunities for employers since older workers are willing to accept lower wages, especially if flexibility is involved. There may be other factors to consider on the demand side. For example, certain jobs have physical limitations. The respondents in the surveys used in this research, however, were more likely to be retired from jobs that did not have such limitations — another indication that as an employer, you may be missing out on qualified, talented older workers who are willing to join your team, if you are willing to offer attractive job conditions.
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