Scary stats abound around the ageing population and many column inches have been dedicated to the burden this will place on the health service and the pension system. But older workers could prove to be the saviour of the workforce.
Andy Briggs, the government’s business champion for older workers, said that employers should commit to employing 12% more employees over the age of 50 by 2022 to help offset the forecast 700,000 fall in the UK population (DWP 2014). He also called for organisations to publish data to show their progress towards meeting this target.
Rachael Saunders, Age at Work director at Business in the Community, has commented: “The UK simply cannot meet its growth and productivity objectives without adapting to retain, recruit and develop people aged over 50.” The long-term demographic change implies a reduction in the supply of younger people in the UK entering the labour market to replace retiring workers, plus as Brexit is implemented, levels of migration are likely to be lower than those experienced over the past decade, further limiting the available talent pool. Companies appear to be doing very little to tackle the problem of the emerging skills gap with most sticking with the traditions of recruitment and development that were created more than 50 years ago. I believe that those companies that recognise the problem and build a solution into their business strategy will ultimately reap the benefits in terms of productivity, growth and business success. There are also social benefits to be gained.
People who spend longer in work and retire later tend to suffer a reduced incidence of problems such as depression and serious cognitive decline, through keeping active and intellectually and socially engaged. A longer working life also boosts income tax and VAT revenues with a positive effect on GDP.
A CIPD report on age diversity found that older workers provided three key benefits over younger workers, that of knowledge-sharing, improved problem-solving and enhanced customer service. These are crucial to helping businesses succeed in a competitive marketplace and employers should work hard to retain existing workers.
People who have been in a role for a substantial period of time are more likely to have a sizeable amount of industry and job-specific knowledge. This may include aspects such as specific skills, culture, contacts and networks. Recent recruits will take time and training to achieve this knowledge which implies some degree of cost to the employer. Furthermore, older workers tend to show greater commitment to a role compared to younger workers and are less likely to change roles frequently. They often demonstrate greater understanding of and empathy with the customer, as well as being able to cope with setbacks more readily.
’65 is the new 45’
Some companies are already taking steps towards increasing older workers as a percentage of overall employees, as well as retaining existing workers.
The shrinking size of the workforce is one of the factors that has driven Deloitte to create a Mass Career Customisation (MCC) programme, whereby employees can choose from a framework of options including workload, working schedule and role, throughout their career. Deloitte believes that this results in greater employee loyalty and increased productivity.
Other companies specifically target older employees. Home Instead Senior Care, for example, is a global organisation which aims to provide quality care for older people in the comfort of their own homes. They actively recruit older mature workers; the workers enjoy a benefits package which is designed to offer a degree of flexibility with, for example, no pre-set retirement age and the payment of premiums for long-term care insurance and flexible working arrangements.
Akbank, the Turkish bank, has also found a way to tap into older workers’ talents: it has a training programme which uses the knowledge and experience of its retirees and hires them to provide training for younger employees. Conversely, the programme also offers the younger employees the opportunity to provide technology education for older executives and retirees.
A further example comes from B&Q, the home improvement and home gardening supply retailer where over a quarter of the company’s workforce is over 50. One of the benefits, according to the company, of employing a higher percentage of more seasoned employees is that older workers are often more experienced with do-it-yourself home projects and are more empathic with homeowners.
If companies respond to the Briggs initiative, it could well pay dividends both for them and for the older workers who see their financial situation, degree of social engagement and job satisfaction improve. Businesses should benefit from the older workers’ job specific skills, experience and level of commitment to their employer.
Over the long-term, I expect that companies that are early adopters with a clear strategy for their older workers – career plans, retraining, flexible working – will become the employers of choice for highly talented people of all ages and that this will be reflected in the company’s success and ultimately in its share price.
Rather than being a cost and burden, companies could rapidly discover that their older employees are an important asset.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.