Struggling to find the right workers? Create an alumni network from your retirees and former employees
Companies need skilled employees, but with unemployment numbers at the lowest levels in decades, available candidates are in short supply. And people with the skill sets needed for certain jobs and industry sectors are just not there.
The hiring professionals are feeling the stress. According to the Society for Human Resource Management (SHRM), 68% of HR professionals are having a hard time recruiting adequately skilled people for the full-time jobs at their companies. The number of applicants is lower, lack of work experience is a problem, and since there are fewer qualified candidates, the hiring competition continues to intensify. And even when companies find people to hire, about 30% report having no budget to train new employees.
The situation is compounded by the fact that Baby Boomers are reaching retirement age in large numbers — the Bureau of Labor Statistics states that about 10,000 of them turn 65 every day. The hiring experts at Fortune 1000 companies believe that all of those pending retirements will have a serious impact, creating a skilled labor shortage within five years.
Interestingly, though, while Boomers may be retiring from traditional work in large numbers, many have plans to stay busy after their “official” retirement. Many are already figuring out that the freelance market is the perfect place to find the work they want on their terms. PwC estimates that about 25% of U.S. freelance workers are over 55.
Finding workers to fill positions vacated by retirees will continue to present challenges, so companies that set up systems to keep retirees and other alumni as part of their contingent workforce will have a competitive advantage. From strictly a cost perspective, Harvard Business Review said research suggests the average Fortune 500 company can save around $12 million a year by utilizing their alumni network.
While saving money is a good reason to hire retirees, there are other equally important benefits. First off, they’re a safe bet. Their work histories and skill sets are known, so it’s often easier for companies to place the right person in a position. Hiring costs are about 50% lower, they tend to be more productive, and they tend to stay longer.
Secondly, they know your business (and perhaps the industry and your competition). When someone retires or resigns, she takes her experience and knowledge with her, potentially leaving an informational void. If alumni have held other positions in the interim, they can provide insight about other companies, industry trends and relevant research.
Finally, alumni can become your company’s top influencers. When alumni interact with community and business members, they have the clout to bolster reputations. Some companies have transitioned alumni into trainers, lobbyists, new-product testing teams and the faces of marketing campaigns. According to SHRM, the top advantages of older workers are:
- More work experience, knowledge and skills
- More mature and professional
- Stronger work ethic
- Able to serve as mentors to younger workers
- More reliable
They also have stronger basic and applied skills in certain areas, including:
- Writing, reading comprehension and speaking in English
- Critical thinking and problem-solving
- Lifelong learning and self-direction
- Ethics and social responsibility
How to Effectively Establish a Network
Once the decision has been made to create an alumni network, companies have much work ahead. An ideal solution for many companies is the adoption of a freelance management system (FMS), which allows companies to establish specific on-demand labor clouds. By creating clouds expressly for alumni, hiring managers and HR teams have interested, available alumni ready for work at all times.
Labor clouds within an FMS tool allow companies to manage the entire alumni freelance experience, including sourcing, vetting, reporting, payment and compliance. This can be especially important if alumni were long-term employees hired under now-outdated federal or state regulations or company policies. The technology can help improve communications with existing and potential workers, often offering real-time web-based and mobile options. (See how labor clouds work in this WorkMarket video.)
FMS technology also gives HR, hiring managers and other business units data and analytics that can be used to make more strategic hiring and planning decisions. Companies can look at alumni performance and benefits compared to non-alumni workers, giving them insight into areas such as job descriptions, performance and worker satisfaction.