How Likely are Employers to Rehire Older Workers After Mandatory Retirement? A Vignette Study Among Managers

Abstract

With a vignette experiment among Dutch managers we examine employers' considerations in the decision to rehire employees after mandatory retirement. We specifically focus on the effects of the employee's downward wage flexibility (i.e., the willingness to accept a lower wage) and contract flexibility (i.e., preference for a contract which allows flexible hours or employment). 2The results show that employers are strongly affected by employees who offer to work for a significant lower wage, but not by the employees' preference for a particular labor contract.Employers are overall quite disinclined to rehire employees after mandatory retirement, although large differences exist between employees. Part of these differences can be explained by managers having higher retirement age norms (i.e., the maximum age at which employers consider employees suited for work in their organization).

European Top Managers’ Age-Related Workplace Norms and Their Organizations’ Recruitment and Retention Practices Regarding Older Workers

“…It furthermore shows the importance of top managers in directing organizations' practices, and thereby the importance of leadership in the emergence and effects of norms (e.g., Ostrom, 2000). Next to directing line managers' selection behavior regarding older job applicants (Karpinska et al, 2013a;Oude Mulders et al, 2014), agerelated workplace norms also influence organizations' practices on a higher level. This may imply that age-related workplace norms of top managers 'trickle down' through the organization, affecting other people's norms in the process, and thereby affecting organizations' behavior.…”

“…First, this study is unique in its focus on how top managers affect their organizations' practices with regard to recruitment and retention of older workers. While line managers and HR managers have received some attention in the literature (e.g., Kooij et al, 2014;Oude Mulders et al, 2014) and have some autonomy to influence organizational practices, the power to determine organizations' practices more broadly ultimately lies with top management (Finkelstein et al, 2008). Top managers not only have the autonomy to decide how to act with regard to recruitment and retention of older workers, but also influence the decision-making of others, and are responsible if the practices do not work out in the desired way.…”

How Do Employers Respond to an Aging Workforce? Evidence from Surveys Among Employers, 2009–2017

“…The retirement age norm held by important organizational actors has proven to be an important predictor in employers' behavior regarding older workers. For example, the retirement age norm influences decisions such as about the retention of older workers (Karpinska et al, 2013), hiring of (early) retirees (Oude Mulders et al, 2014), but also more broadly organizational practices aimed at extending working lives (Oude Mulders et al, 2017). While norms are relatively slow to change it is interesting to note that the retirement age norm gradually seem to change in response to increases in the statutory retirement age and the average age at labor market exit in recent years.…”

To Work or not to Work: Factors Affecting Bridge Employment Beyond Retirement, Case of Lithuania

“…The main finding why employers do not rehire older employees is the downward wage flexibility. Employers are considerably more likely to rehire employees who are prepared to accept a significantly lower wage after mandatory retirement because they probably want the post-retirement wage to be more related to workers' productivity (Mulders et al 2014). It is generally acceptable that older workers become less productive, but at the same time, their experience makes it possible to get reasonably bigger wage.…”