Older Americans Seek Income

This may not come as a newsflash, since there has been a lot of coverage about the impact of the recession on 401(k)s and other retirement savings vehicles. But what may surprise you are the ways in which the situation impacts the employment marketplace.

As AIRS RecruitNews recently reported, the number of people 75 years of age and older searching for employment has increased by 80 percent in the last year. Shrinking retirement accounts, combined with rising costs for food and medical care, have led more senior citizens to seek additional income.

In some instances, senior citizens are taking part-time jobs typically filled by high school and college students. This leads to fewer employment opportunities for younger workers in an economy where there is already a shortage of jobs.

But the increasing number of retirees returning to the workforce is only one group of older Americans reacting to the recession.

At the same time, older workers who were considering retirement have decided to continue working.

And here too the shift is significant.

A study conducted by global consulting firm Watson Wyatt finds that one-third of all workers (34 percent) have increased their planned retirement age in the last year. The percentage is even higher for older workers, with 44 percent of people 50 years of age and older indicating they now plan to work longer.

Among workers 50 to 64 years of age planning to postpone retirement, a majority (54 percent) say they will work at least three years longer than previously expected. Twenty (20) percent expect to work at least three years but less than five years. However, 34 percent of workers in this age group expect to work an additional five years or more.

An overwhelming majority of workers 50 to 64 years of age (76 percent) cite the decline in the value of their 401(k) as one of the most important reasons for postponing retirement. The high cost of health care, cited by 63 percent of workers, is also a deciding factor. Likewise, 62 percent of older workers cite higher prices for basic necessities as contributing to their decision to delay retirement.

These reasons merit attention because they are unlikely to be resolved soon. In other words, most of the older workers who now say they plan to continue working probably will.

The immediate implication for recruitment is obvious. Delayed retirement translates to fewer job openings.

But delayed retirement could lead to retention issues as well. Less mobility within an organization may cause ambitious employees to look elsewhere. This, in turn, would create opportunities for recruitment.

All in all, the situation has the potential to make for an interesting environment, especially when the economy starts to rebound.

Will you be ready?