15 July 2014
As people live longer, the proportion of older workers is rising, but are businesses recognising the benefits older workers can bring to their business?
With people living longer and the retirement age set to increase, the proportion of older people in the workforce is on the rise. But while employment for older workers is reasonably high, most employers focus on hiring younger workers, such as graduates or apprentices when they have vacancies. This post examines the benefits of hiring older workers and the value they can bring to your business.
The average life expectancy in the UK has risen from 70.8 for men and 76.8 for women in 1980-1982 to 78.8 for men and 82.8 for women in 2011-2013. Recognising this, the government is planning to increase the state pension age. While it’s remained steady at 65 for men and 60 for women for decades, the current plan is to raise it to:
Further rises are likely and it’s estimated that it will hit 70 by the late 2040s and in future may be linked to life expectancy.
Of course, this doesn’t mean that people have to stop working when they reach retirement age. In fact over one million people aged 65 or over are currently in employment (although this only amounts to 10% of those aged over 65).
There are also more people over the age of 50 in employment than ever before. Currently around 27% of the working population is aged between 50 and 65 and this is set to rise to 32% by 2020. However, while these statistics are positive, as people approach and reach the current state pension age, employment data shows they are less likely to be in work.
The number of people leaving the labour market early is a significant problem according to the government. Often they have not planned to retire early, but have had to because of sickness or disability, to care for loved ones or have lost their job and have given up trying to find a new one.
In the recently released ‘Fuller Working Lives’ document it states that early retirement before state pension age can impact an individual’s health, wellbeing and income. It also has negative implications for the economy, business and society in general.
Many unemployed older people find it hard to find work and often cite their age as a barrier.
Negative associations with age include the belief that older workers are slower, less creative and less productive. But research has indicated that this is almost always not the case. This adverse perception is not helped by the media, which generally portrays younger workers as energetic and more adaptable to change. This is particularly the case for entrepreneurs and jobs within the digital sector, a field associated with younger, more tech-savvy workers.
On the flip side, a survey by Nationwide at the beginning of the year found some positive perceptions of older workers and how different generations can learn from one another. 88% of those surveyed thought older workers (classified as over 60 in this research) were good role models or mentors for younger workers. 78% thought it was important for younger workers to help their older colleagues keep up to date with technology.
These are obviously generalisations, but there are many reasons for employers to welcome older staff into their business.
While many older workers say that support from their employers during ill health is important to them, don’t stereotype older workers by simply thinking they want medical support and training to keep up with technology. Similarly, while they may want to work part-time or reduced hours to step-down into retirement, flexible working is now open to everyone, so don’t specifically offer this as a benefit to those reaching retirement age.
Many people choose to continue working because they still want to be challenged and keep active, so ensure their responsibilities reflect this. They also want to be respected for the knowledge and contribution they can make – another argument for encouraging mentoring opportunities.
While there are benefits to recruiting older workers, many employees reaching or past retirement age are choosing to start their own business or become self-employed. While for some this may be out of necessity to top-up their pension income, but many do it out of choice.
A study by Scottish Widows found that 8% of retired people have started a new career after they retired and 5% have started their own business. There is also further research that people over 50 who start their own business tend to be more successful.