15 July 2014

Recognising the value of hiring older workers

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.

Ageing workforce

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:

  • 65 for women in 2018
  • 66 for both men and women in 2020
  • 67 for everyone in 2026-28
  • 68 for everyone in the mid 2030’s

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.

The perception of older workers

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.

Advantages of hiring older workers

These are obviously generalisations, but there are many reasons for employers to welcome older staff into their business.

  • They offer a level of maturity that can’t just be taught to younger workers. With more experience in problem solving and weighing up decisions, they can more confident and better at taking calculated risks or handling difficult decisions.
  • They have more relevant experience. With more years in employment, they often have more relevant experience for the role, which means they need less training and support and can be productive from the moment they start with your company.
  • They’re less likely to be a ‘bad hire’. With a longer work history, you can build up a better picture of the person you’re interviewing and the relevance of their skills. You’re therefore less likely to find that your new employee isn’t what you expected.
  • They tend to be loyal. Older workers have traditionally had fewer job changes in their career and are therefore more likely to be loyal. Towards the end of their career, they’re also less likely to want to keep changing jobs. This benefits your business as a high staff turnover affects productivity and hiring is costly.
  • They’re focused and hard-working. Older workers are known to have a high work ethic, taking pride in what they do and making sure they do it well. Ultimately this can mean they are more productive, as they are more likely to get things right first time.
  • They have good communication skills. As they’ve worked before the advent of technology like social media and even email, they often more people-orientated, with excellent social and communication skills. These are vital skills for any business, but particularly in customer service roles.
  • They’re less likely to take time off sick. According to one study, 45% of workers over the age of 55 haven’t taken any sick leave in the past 12 months, compared to 35% of 18-24 year olds.
  • Ability to mentor or coach younger workers. With a broad range of experience, there is likely to be a number of transferable skills as well as knowledge that they can transfer to the rest of your workforce.

Attracting and retaining older workers

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.  

Older people and start-ups

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.