Gone are the days of reaching 65 and hanging up your work boots. The thought of a leisurely retirement, basking in your golden years on a beach in the Mediterranean is a far cry from reality for many Britons. Those aged 50 and over are facing much greater financial insecurity with the rising cost of living, inadequate pensions, a higher state pension age and a prolonged life expectancy. Add to that the presence of age discrimination in the workplace and it’s a grim picture for those on an average wage, with little in the way of a retirement nest egg. Encore Personnel Director Pete Taylor shares his views on the plight of the older worker and misconceptions about the value they can bring to a business.
At the coalface of recruitment, there’s evidence to suggest a concerning bias against older candidates (those aged 50 and over), with employers opting to hire the younger candidate if both CVs cross their desk. Age discrimination in the job market is rife and needs to be treated on a par with gender and ethnic discrimination, or we stand to face huge economic and societal issues in the UK. The recent focus on achieving pay parity between men and women is absolutely valid, however it has side-lined another equally important conversation – age prejudice in the workplace. The Equality Act makes it illegal to discriminate against employees, job seekers and trainees based on age, but it remains a silent issue in many industries.
Research shows one in four people aged between 50 and state pension age are out of work in the UK, and once you’re out of the game, it’s becoming near impossible to get back. This is creating an unemployment vacuum of sorts with people over the age of 50 struggling to bridge the gap until they’re eligible for the state pension. Not only are employers missing out on perfectly good talent, but these workers have no option but to seek welfare to sustain them while they’re out of work.
At the other end of the spectrum, those who are of state pension age, but are not in a financial position to retire or simply wishing to continue work for a sense of purpose and social interaction, are also facing brick walls. Some are being systematically nudged out of their positions, or struggling to get beyond interview stage in many industries and sadly, this is typically driven by the perceived costs to the employer. There is a misconception that older candidates will be a drain on a business financially, not only demanding a higher wage due to their experience, but taking more sick days and perhaps not being as productive or innovative as their younger, perkier colleagues. In many cases, this couldn’t be further from the truth.
A report published in February by the Centre for Ageing Better UK found that older workers are just as productive and perform as well as in the workplace as younger people. And while difficult to quantify, the value of older mentors or role models within a workplace is priceless when it comes to nurturing younger talent and creating a culture that promotes career development and progression. They say age is just a number, but experience is invaluable and the years of institutional knowledge and ‘street smarts’ that come with age are not to be scoffed at. Successful multi-generational workplaces encourage the sharing of knowledge and ideas both ways so older and younger workers can learn from each other. Whereas those made up mostly of younger workers risk becoming monotoned in their thinking and suffering from a much higher staff turnover.
The tendency of younger workers to ‘job-hop’ is well-publicised and while the average job tenure is not tracked in the UK, it is in the US where the average tenure of workers aged 55 to 64 was 10.1 years, more than three times the 2.8 years of workers aged 25 to 34. Older workers would seem to have more of a vested interest in staying put in their jobs for longer, with the stability of a steady wage easing financial burdens like mortgages and the costs associated with caring for family members or dependents. Add into the mix the prospect of saving for a 30-year retirement and there’s even more incentive to work harder to retain a job or push for a promotion. When you consider the costs associated with onboarding new recruits, retaining your older staff makes good financial sense for your business.
But the impacts of hiring or retaining older staff reach much further than a single business, it affects the entire UK economy. The average life expectancy is growing year on year with more people now expected to surpass 100 than ever before. This rapidly growing ageing population is set to become a sap on our economy if we don’t make critical changes now to ensure they’re able to stay well and contribute.
The thought of millions of perfectly able older people sitting idle in their retirement is nonsensical, let alone not viable for them financially. Retiring at 65 and funding 35+ years on a state pension of £164 a week is out of the picture for the average Briton. Research shows more than one in 10 UK men and 8% of women are already working beyond 70 to plug the gap.
Ensuring older people have equal opportunities in the workplace could also help to reduce the welfare bill, with the government currently forking out £7 billion a year on benefits for those aged between 50 and state pension age who are out of work. This price tag doesn’t take into the account the costs to the health system of older people with declining health as a result of things like social isolation and poor mobility. There is evidence to suggest that the routine, social interaction and sense of purpose associated with employment can help to prevent the onset of age-related health issues, so it’s simply a no-brainer.
The onus lies with the government to enforce stronger policy, but the baton is really in the hands of employers who should take responsibility for creating more age-friendly workplaces – not only for the sake of our economy, but because it could truly add value to their business.