Balancing Experience and Fairness: Should We Rehire Retired Employees as Consultants?

Dear all,

We have some really good veteran employees who have retired. Can we bring them back as consultants since they are experienced and knowledgeable? However, we need to consider if this would be fair to the new workforce.

Awaiting replies.

Thank you, Anshuman, for the input.

Would consultants' salaries be paid on a consolidated basis? Additionally, would they be paid on an hourly basis, and would they have regular work hours?

All suggestions are welcome.

Hi,

We are also following the same policy. Those employees who retire from our company are rejoining us as consultants, and we are also hiring other retired candidates as consultants. We pay them monthly based on the number of visits they make. For example, if we hire a retired employee as a consultant who will be visiting our company 8 times per month, we pay them a fixed amount per month.

Regards,
Vijayshree

It is a win-win situation for both the employee and the employer. Many companies are appointing retired personnel as consultants.

Hi,

The first thing that needs to be questioned is: if the retired employee is so good and valuable, then why did the company not make efforts to develop somebody under them? Why have they become necessary after retirement? This shows a clear gap in succession planning. However, there are benefits to rehiring them since it can be done at a lower cost and would allow for the utilization of their experience with no strings attached. At least now, the new workforce can be trained by them so that there is no need to keep calling back people after their retirement perennially.

Kind regards,
Dayanand L. Guddin

Hi,

I agree with Dayanand. Every organization has to identify and plan for a successor. Also, if the company re-hires retired employees, what message does the company want to convey to its current employees and new hires?

Regards,
coolchini

Hi,

I partly agree with Dayanand. What he has said is correct in one aspect. However, a company will only consider rehiring a retired employee if his/her expertise and experience are valuable and required. If we re-recruit a retired person, it does not have to be bad succession planning. Instead, it can be taken as a good usage of trained experienced personnel whose experience and expertise can still be used to guide the new blood at a lower cost.

Regarding the message we send out to current employees/new hires, it could be that the company values its people and cares for them! Why look at everything negatively.

Regards,
Meena

Greetings,

This is a practice which is followed by the industry giants since ages. It's not only limited to hiring them as consultants but creating a knowledge base to ensure there is an exchange of information even if they are not available to be rehired.

As per Ravi Arora, head of Knowledge Management at Tata Steel, "Future plans for KM at Tata Steel include linking e-learning with the KM repository and KM communities, devising an intellectual capital index, networking with retired employees, employee skill development for better externalization of knowledge, and integration with customers' knowledge."

Implementing Outreach Programs will be a win-win for everyone. The challenge lies in moderating the benefits to keep the employees and ex-employees motivated in the long run.

Here's a news published on The Hindu: [Firms see advantage in rehiring laid-off staff](http://www.hinduonnet.com/jobs/1006/2010061650030400.htm)

Wish you all the best!

Hi, my name is Vijay Gupta, and I work in a garment company. Earlier, the factory was running on a payroll system, but now the management has decided to switch to a piece-rate system. I would like to know if the Provident Fund (PF) is mandatory for employees working on a piece-rate production system.

It is good to consider them as consultants after retirement, but don't forget to deduct TDS under section 194J as per the Income Tax Act. If it exceeds Rs. 30,000 in a year, TDS will be deducted at a rate of 10%.

Dear Vijay,

It is good that you have started the concept of piece rate for the workers. It is a bit cumbersome at the beginning but very effective in the long run. One of the usual downsides is that in case of no order, you must work out a minimum wage structure to help the workers. Now, coming back to your question of PF on piece rate production, it is like any other wages which attract PF. Therefore, you have to deduct PF from the wages that they earn.

Best wishes for the new venture.

Regards,
Mohan Kumar

Dear ???

A company will only hire those retirees as consultants who have proved their worth either in their own field or in some other. As rightly said by the above replies - they are a huge knowledge bank and need acquiring and tapping. With job hopping a common trend, I would rather have a person who can give back, regardless of age.

Regards, Col J H Mayne.