Retirees may be flocking back into the workforce amid inflation pain

Victoria Wells: Employers have seen an uptick in older people applying for entry-level positions

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Some retirees may be trying to make their way back into the workforce as the rising cost of living eats into their savings and makes holding down a job again necessary to pay the bills.

Employers have seen an uptick in older people applying for entry-level positions, according to a survey by staffing company Express Employment Professionals conducted by The Harris Poll. More than three-quarters of hiring managers said there’s been an increase in the number of seniors applying to junior roles compared to three years ago.

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That increase comes as a period of high inflation and interest rates have sent the cost of living soaring and people in all income brackets are struggling to keep up, including retirees. Around 34 per cent said in a recent survey by Sun Life Financial Inc. that making ends meet in retirement has turned out to be more costly than they expected.

Retirement rates have been rising in recent years as the population ages, and hit a record between August 2021 and August 2022, Statistics Canada said in the summer of 2022. Anecdotal evidence suggests people are still jumping out of the workforce despite dicey economic conditions, and they’re doing so at younger ages. Almost three-quarters of managers in a separate Express Employment survey said they’ve lost employees to retirement over the past two years, with more than half of those leaving under the age of 65.

Yet a rise in starter-level job applications among older workers suggests some of those retirees may be harbouring regrets about quitting so soon. Employers watching it all unfold point to higher living costs as the root cause of the trend. “People are looking to add supplemental income and they have a higher chance of getting hired for an entry level job,” KV Aulakh, an Express Employment franchise owner in Barrie, Ont., said in the survey release.

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An increase in older job seekers could serve as a warning sign for anyone planning to retire any time soon, especially as research shows that many have little — if any — savings set aside. One in five Canadians have zero retirement savings while close to half only have $5,000 or less, according to a June 2023 survey by Healthcare of Ontario Pension Plan. Another 75 per cent have $100,000 or less. That might seem like a tidy sum, but it’s concerning when you consider most people expect they’ll need at least $1.7 million to retire comfortably, according to Bank of Montreal research this summer.

Of course, it’s not just retirees searching for starter-level jobs these days. Express Employment said those looking for work include older people who’ve experienced a recent layoff or who have had their hours reduced, perhaps amid supply chain issues in the manufacturing sector.

Still, clinching one of those entry-level jobs to help make ends meet, whether retired or not, is no sure thing for a senior. Though 83 per cent of jobseekers think it’s fine to apply for a position they’re overqualified for, some employers may see an older worker’s resumé — likely bursting with skills and experience — as a red flag.

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Those hiring managers consider hiring a highly skilled older worker risky because they fear the applicant could depart quickly, leaving the employer footing another bill to come up with a replacement. “Employers are hesitant to hire overqualified workers because they feel they will leave as soon as an opportunity more in line with their work experience comes along,” Aulakh said. “This leads not only to turnover, but higher training costs.”

Mismatched expectations about pay and responsibilities may also factor into employers’ preference for hiring younger people for entry-level positions, according to Express Employment’s report. There’s a desire among many employers to sign on those just beginning their careers, because such employees are more likely to stick around long term so they can move up the ranks of the company.

But those preferences mean many employers will find themselves losing out on a whole pool of workers who could fit hard-to-fill roles, especially as labour shortages persist in some industries. Express Employment’s report notes that entry-level jobs are the most in need of being filled, followed by mid-level positions.

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Aside from losing out on filling vacancies, employers who leave older applicants on the sidelines may also be missing out on training opportunities. Years of invaluable knowledge and skills can be passed down to younger staff by seniors, helping preserve in-house expertise and creating stronger organizations in the long run.

Meanwhile, companies who recognize the value of older workers can hold onto them longer if they play their cards right. Among people planning to retire, many said they’d happily delay their quitting date and keep working if their employers would allow them to work part time, reduce hours without affecting their pension, or alleviate stress or physical demands on the job, according to a Statistics Canada report in August.

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Canada’s population isn’t getting any younger, so labour shortages persist and the cost of living remains high. It benefits both employers and seniors, not to mention the economy, for both sides to keep working together as long as they can.

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