Many companies tend to rehire retired personnel as consultants only at a higher cost. It has been seen that the people who retire from a company often get employed by the same or another company and are paid much higher than their previous salary. However, the retires who are rehired hardly pass their knowledge and skill to the next generation of employees, thus creating a total; dependency of the company on them. Many multinational as well as regional business institutions spend a lot of money in hiring the retired employees to utilize their expertise.
This issue of rehiring retirees poses a serious hindrance to the employment opportunities of young people. If companies start to reemploy retired personnel, it would only result in narrowing down the potential of fresh graduates being employed. It is true that experienced employees have huge knowledge about the job but it is also true that many of them do not prefer to impart their knowledge to new employees. So, in a way companies are forced to rehire retired employees. It not only takes a toll on the financial capability of the company but also on the overall productivity as well.
With a surge in the number of retirements between 2008 and 2013, companies like GE Global Research Center foresaw the immense financial burden to be carried if retired employees were rehired. It made them reject the idea of hiring retired personnel especially those who had hardly anything to offer. However, the small number of retirees who were hired were done so on the agreement that they would help new and young employees learn the job by sharing their valuable knowledge with them. This would ultimately help the companies reduce their expenditure that goes into rehiring retired employees and plan new incentives for new employees to inspire them work better.