How Should We Rehire a Retiring Senior Employee as a Consultant or on Contract?

Dear Seniors, We have one of our senior employees retiring on 31st March 2015. From 1st April onwards, we are planning to continue his service under a different category.

Consultant Hiring Option

1. Can we hire him as a consultant and appoint him with consolidated pay?

Contractual Hiring Option

2. Can we hire him under contract for 1 or 2 years? If so, what is the pay structure and what are the applicable components? How should the letter be formatted?

Kindly enlighten.

Hiring Retired Senior Employees: Considerations and Recommendations

Hiring the retired senior employee in the same cadre is good to proceed without any hiccups, only for a short term. Hire the employee as a consultant and pay an honorarium. This is a better solution rather than hiring to the same category. Also, get one of your present employees, a well-trained serving employee, for a better solution. In the long run, always kindly keep one employee well-trained, as the organization should not suffer upon the retirement of a senior employee. The eventuality of a vacuum should not bother an organization.

Reasons for Hiring as a Consultant

- You cannot make him responsible for the work/service.
- The senior employee may take leave for health and family commitments, as the employee may manage his time.
- You cannot compel the employee to be in the office during office hours or put in the same level of service/work as when in the office.
- The retired employee cannot be considered a signatory for official circulars/orders, as the retired employee holds no responsibility. The responsibility clearly rests with the present employee, who may have conflicting views on certain issues.
- The present employee should not be seen as a spy in the eyes of the retired employee, even though this is an internal matter, as it may have a boomerang effect.

Best of luck...

Keep the present shine. Sometimes we must seek help but should not become fully dependent.

Regards

You can and should appoint him as a consultant with a 'consulting fee' payment model. The consulting contract needs to specify the exact details of the delivery, etc., and you'll find a few formats here or through a Google search. Contracts have a specified tenure, so you can hire him as a consultant for a definitive tenure. Hope this helps.

Hiring Retired Senior Employees as Consultants

Hiring a retired senior employee in the same cadre is a good approach for short-term needs. Consider hiring them as a consultant and paying an honorarium, which is a better solution than hiring them in the same category. Additionally, ensure one of your current employees is well-trained to avoid any organizational vacuum when a senior employee retires.

Reasons for Hiring as a Consultant

- You cannot make them responsible for work/service. [In a contract, you can.]
- The senior employee may take leave for health and family commitments. [Isn't this a moot point?]
- You cannot compel them to adhere to office hours. [Contracts specify location and reporting requirements.]
- They cannot be official signatories for circulars/orders. [Consultants cannot be official signatories.]
- Avoid making the current employee appear as a 'mole' to the retired employee, as it may have negative effects.

Best of luck. Keep the present shine; sometimes we must take help but should not be dependent as a whole.

Gopinath Varahamurthi, your response is confusing. Mahi.K seeks a clear answer on hiring an employee as a consultant post-retirement. Learning and development are not the questions here.

Honorarium is paid 'in honor of' when payment is not expected. Do you think a consultant will work for free? Below are my comments on your observations:

1) You cannot make them responsible for work/service. [In a contract, you can.]
2) The senior employee may take leave for health and family commitments. [Isn't this a moot point?]
3) You cannot compel them to adhere to office hours. [Contracts specify location and reporting requirements.]
4) They cannot be official signatories for circulars/orders. [Consultants cannot be official signatories.]
5) Avoid making the current employee appear as a 'mole' to the retired employee. [Mole? Boomerang?]

Regards.

No problem, you can hire on a contract basis or as a consultant to come and do your work as per your requirements in intervals. Regarding remuneration, you can fix a reasonable amount as per mutual agreement.

Regards,
D. Gurumurthy
HR & IR Consultant

Dear talentsorcerer,

Please go through this fully; you have raised questions and need to understand fully what it means.

You can hire as a consultant or contract worker, particularly an ex-employee. That is good but not entirely.

1. A contract worker must fully do what the original employer wants to be done. Yet, in case of errors, do you want to hold them accountable for the faults? The contract in official work and the actual work on the ground are different. A financial fault can be rectified, but not entirely the work carried out with faults.

2. Can you hold the ex-employee accountable for your official work during your office hours? When the contract is being signed, there must be clarity on the work hours, whether daily or hourly. Your contract needs to be explicit; the office time and contract time may vary. You may require your employee to work extra hours - can you compel a contract worker at your discretion?

3. A contracted worker never signs on your behalf or on behalf of the official works. You cannot delegate powers to a contractor.

4. Present workers need to be nurtured. If you fail to nurture present employees by seeking help from ex-employees, talent and work efficiency may decline. This phenomenon is known as the double-edged sword or boomerang effect. Inefficiency is detrimental.

Thank you, thank you... all the best...

Yes, no problem, you can hire him as a consultant. However, you cannot force him to work for 8 hours as consultants are generally kept on a call basis for a certain fixed fee per visit. Additionally, you may keep him on a full-time basis as per mutual agreement and initially engage him for a term of three months, which is further extendable. The fee payable to the consultant shall be subject to tax deductions. Furthermore, he shall not be entitled to other benefits such as PF, Gratuity, Medical, etc. Generally, one day of leave is allowed in a month as per the terms of the appointment. In Government Organizations, the maximum age limit for consultants is 65 years. Regarding remuneration, you can set a reasonable amount as per mutual agreement.

Dear Seniors,

I would like to add a little pinch of salt. Mr. Gurumuthy and Mr. Varahamurthi have valid points. They are apt according to the requirement. How you get the work done is purely based on how a retainer/consultant contract is made. If the contract is aligned with business objectives, yes, we can hold the contractor responsible, but we cannot tie him to it 100% as we do for an employee.

I think you should hire him as a consultant or alternatively, find someone to replace him. There are a number of useful sources for hiring good talent. I found one site where you can find these resources: http://www.lifecareer.com/jobs/

Engaging Retired Employees: Considerations and Implications

Engaging a person after retirement on the same terms and conditions is nothing but an extension of service. It brings down the morale of officers down the line in terms of promotion, which can lead to an organization becoming dysfunctional. When you know that an officer is due for retirement, you should have groomed others in line well in advance.

In such circumstances, engage the retiring officer only as a consultant to provide guidance as needed. Offer a consolidated salary for a fixed period. Otherwise, the officer in line below may start looking for opportunities elsewhere, and you will lose experienced talent.