In a tight labour market, employers are looking for new talent pools to recruit from — and sometimes finding them in unexpected places.
One trend that could have a big impact on the UK labour market this year is ‘unretiring’: a phenomenon that sees newly retired people changing course and returning to work.
In this article, we’ll discuss what this trend looks like in practice, explore some of the reasons behind it and consider whether it could help to plug some of the gaps created by the Great Resignation and the labour shortages that are still impacting many industries in the UK.
What is unretiring?
Unretiring is when a person who has previously retired decides to go back to work. This might be for a combination of financial, lifestyle or personal reasons — and it’s not a new phenomenon. However, the term has frequently made headlines over the past year as experts in various countries have predicted a mass increase in retirees returning to work.
Of course, this has to be viewed in the context of the COVID-19 pandemic, which effectively forced many people who were approaching retirement age to retire early, either through forced redundancy or because of health concerns.
In the US, for example, roughly 2.4 million more people than expected retired during the first 18 months of the pandemic. But by May 2022, an estimated 1.5 million had returned to work.
The situation is similar in the UK, although the so-called ‘Great Unretirement’ seems to have arrived a bit later.
According to ONS data, there were 84,000 fewer retired people in the UK between August and October 2022, compared to the previous quarter.
And the trend seems to be holding: recruiter Randstad UK said just this week that the number of applications from over-60s they’ve received has increased by around 160% compared to their long-term average.
What’s driving the ‘Great Unretirement’?
Like any big trend impacting the global labour market, there’s no single reason that explains the ‘Great Unretirement’. But certain circumstances mean retirees are more likely to want to return to work right now — particularly in the US and the UK.
Here are some of the possible reasons driving this growing movement:
1. The rising cost of living
Last November, the US consumer price index (CPI) showed that prices had risen by 7.1% in one year. Although this actually represents a slowing of inflation compared to previous years, it’s still considerably higher than the Federal Reserve’s target rate of 2%.
And in the UK, the situation may actually be even worse, with the annual rate of inflation reaching a 41-year high of 11.1% in October 2022.
In the same month, 93% of Brits said in a survey that their cost of living had increased compared with a year ago. 79% reported that it had risen over the past month alone.
This means that for many retirees, the decision to return to work is an easy one — they simply can’t afford to stay retired.
In fact, in a Joblist survey from Q2 2022, 27% of retirees who had reentered the workplace in the US said they had done so for financial reasons. 21% had specific concerns about rising inflation.
2. Lessened COVID fears and a dislike of isolation
During the pandemic, many older people felt they had no choice but to step away from the workforce because their age meant they were at a higher risk of serious COVID symptoms.
But according to interviews conducted by the Washington Post, many feel more comfortable returning to work now that they’ve received their vaccines and boosters.
Plus, employers have learned a lot since 2020, and are now more likely to take people’s concerns about COVID into account. Many organisations offer their employees the possibility of working remotely or keeping flexible hours to reduce contact with others, for example.
But interestingly, some older people may be more likely to ‘unretire’ precisely because organisations are moving back towards in-person work.
Anecdotally, it seems that some people were at least partially driven towards retirement by initiatives like remote work, which didn’t suit them. Now that work once again comes with a social side, many are more keen to return.
3. More attractive jobs for older people
In the US, there are currently 1.7 job openings available for every person looking for work — and the market is similarly tight in the UK. This means that employers increasingly have no choice but to make their offerings more attractive in order to convince candidates to apply.
Many have introduced benefits like hiring bonuses, retention bonuses, and more flexible work options, which make the idea of work in general more appealing.
Many are also open to hiring part-time employees, which is of particular interest to older candidates: the Joblist survey mentioned above found that 79% of retirees who were looking for work wanted to work part-time, while only 6% were explicitly looking for a full-time role.
All in all, it may be that many people are simply seeing retirement as something different than we’re used to — as this Forbes article suggests. Yes, people are working into their retirement years, but they’re doing it on their own terms.
Unretiring: a global trend?
According to a study by Preply, a business learning platform, unretiring is by no means limited to the US and the UK.
The study aimed to rank the world’s developed countries according to the likelihood of unretiring in each one, based on various sociological, demographic and economic factors.
Essentially, it assumes that people are less likely to ‘unretire’ in countries where they’re more likely to be financially stable and well looked after by the state.
According to the study, the ten countries where unretiring is most likely are:
- Saudi Arabia
- New Zealand
Interestingly, the US comes in only at number 17, while the UK sits at number 11. According to Preply, the country where retirees are the least likely to return to work is Denmark, thanks largely to a welfare system that does a good job of supporting them.
Is this the answer to the world’s labour shortages?
In the context of labour shortages around the world, an increase in participation in the labour force sounds like a good thing, whatever the reason behind it. But could the Great Unretirement really help us to combat labour shortages in 2023?
To answer that question, we would first have to establish whether unretiring is actually a real trend that’s likely to continue — which some experts doubt.
According to one New York Times article from December, for example, retirees have not stampeded back into the workplace at the rates that were predicted earlier in the year.
Since the UK seems to be lagging a few months behind the US on this front, whether or not the rising numbers we’ve seen represent the start of something bigger remains to be seen.
But according to the OECD, the share of the population aged between 50 and 64 will increase from 37% in 2020 to 45% by 2050.
On an individual level, then, organisations that are struggling to meet their hiring demands would be foolish to ignore this growing talent pool — particularly since older people are by definition experienced, and can usually be relied on for a strong work ethic.
And many big employers are already taking notice: in the UK alone, Halfords, McDonald’s and EasyJet are just a few of the companies that have already launched recruitment drives specifically targeted at retirees and older people.
Are you a retiree considering a return to work? Or an employer wondering what you can do to attract older workers? Do you think that the Great Unretirement is the answer to the labour shortages brought about by the Great Resignation — or just an empty prediction that we’ll forget about once the moment passes?
At CXC, we’re always interested to hear what our audience thinks about the biggest trends affecting the labour market. Why not connect with us on LinkedIn to let us know what you think?
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