Magazine article Personnel Journal

Lost and Found-Retired Employees

Magazine article Personnel Journal

Lost and Found-Retired Employees

Article excerpt

Twenty-five years ago, optical engineer Erwin Rosenthal was a rarity. He retired from Norwalk, Connecticut-based Perkin-Elmer Corp., an optical engineering firm, with a party, a pension and a job-right back into the engineering lab he'd just left. Eager to keep working, he put in 15 more years as a contractor. When Rosenthal finally retired, he was 80 years old.

Back then, of course, fat pensions, job stability and rewarded company loyalty meant few retirees, like Rosenthal, were willing to trade golf clubs for a briefcase. Once retired, nearly all corporate workers stayed retired.

Times change. These days, many corporate retirees particularly those who've been pressured into leaving with early retirement benefits-now are unwilling to go gracefully into that good "retirement" night. Moreover, in the next 15 years, baby boomers will reach retirement age.

That means by the year 2016, the number of annual retirees will double to approximately four million. Demographic trendwatchers say companies need to think about giving these people something to do.

"There will be, and I guarantee it, many millions of boomers who will have to work beyond age 65 because they simply haven't saved enough money to retire," says Peter Francese, president of American Demographics in Ithaca, New York.

The notion is enough to send shivers through human resources departments. How can companies rehire retirees when they're already hard-pressed to retire as many workers as possible?

The answer: It's not only possible, but in many cases, inevitable. Retiree-work programs, although still few in number, may grow in abundance as demographic trends merge with employee needs. On the employers' end, some companies have found the cutbacks that saved them money have cost them talent. Faced with bare-bones staffing, they need to fill staffing gaps with low-cost, experienced help. By rehiring retired employees, these human resources departments can gain back the experience and skills they lostand often at substantial cost savings.

In any layoff situation, "My rule of thumb is that at least three of four people [laid off] are those you need to get rid of," says Francese. "But often every fourth person is one you really need. You may not need him or her full time, but you need his or her skills and knowledge of the technological aspects of what he or she was doing. It may be a situation in which this person was being paid, say $70,000 or $90,000 a year. In fact, for $20,000 or $30,000 you can get that person three or four times a month, which is when you really need him or her."

Retiree-work programs provide myriad benefits. Hartford Connecticut-based Travelers Insurance's program for rehiring retirees, Trav Temps, has been widely publicized as one of the first formal programs for rehiring retirees who want to work. Launched more than a decade ago, it's still one of the few programs of its kind around. The company boasts 700 available workers with 125 to 150 on the job at any one time.

By using its own job bank of retirees to fill temporary work needs, Travelers saved more than $1 million last year. The company also has found that hiring a retiree is a much more productive situation than hiring a new or temporary worker, says Florence Johnson, director of corporate human resources. "There's no learning curve. These people know the environment; they know the systems; they know the culture."

This is one reason Minneapolis-based Honeywell Inc. gives for hiring back retirees as well. Honeywell, which downsized from 18,000 employees to 7,000, reopened its doors to an influx of retirees returning on a part-time basis. "We have retirees all over here," says Tamra Schmalenberger, former spokesperson for Honeywell. "They're often used in positions for which they have expertise or skill [gained] through tenure."

Another reason Schmalenberger cites for rehiring retirees is the flexibility they provide. …

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