Last month saw the annual celebration of Older People’s Day. Aimed at celebrating the elderly and their achievements, it is a day which holds increasing significance every year, owing to Britain’s ageing population. And while it’s no secret we have an ageing workforce, what challenges and opportunities does this present to HR and Benefits professionals?
Firstly, just how old are British workers?
The rate at which Britain’s workforce is ageing is striking. Projections show that by 2022, there will be 3.7 million more people aged between 50 and the State Pension age, yet 700,000 fewer people aged between 16 and 49. In simple terms, this means that in five years almost one third of the working population will be aged 50 or over. Already, the number of over-50s in paid employment is at a record high, with 8.2 million older people now in work, meaning they now account for more than a quarter of the entire workforce.
Avoiding age discrimination and unconscious bias
Despite the growing numbers of older workers, age discrimination and unconscious bias are “widespread problems” in the UK, according to a report from the Government’s former Business Champion for Older Workers, Ros Altmann.
The report, named A New Vision for Older Workers: Retain, Retrain, Recruit, advocates a new type of retirement, where people scale back the amount they work, rather than stopping altogether. As the name suggests, Dr Altmann’s report also argues the case for employers focusing on the three Rs:
- Retain – keeping older workers and their skills in the workplace
- Retrain – offering ongoing workplace training to older workers
- Recruit – stamp out age discrimination from the recruitment process
With such a large percentage of the workforce soon to be in the relevant age bracket, focusing on the three Rs feels like a logical way to support older workers whilst helping them to adapt and grow within an organisation as their careers progress. I’ll not touch on unconscious bias in detail (you can read an excellent article on age-related unconscious bias here), other than to offer a summary of the concept if you’re unfamiliar with it: an individual can exhibit different behaviours in different situations or towards different people without being self-aware. In the workplace, this can lead to inconsistent or even discriminatory treatment of staff. Raising awareness of unconscious bias and offering training to managers is becoming part of the toolkit for the most progressive of employers.
So are attitudes towards age starting to change?
While Dr Altmann’s report calls for a large-scale change in employer attitudes, evidence suggests that they are already starting to change. In a recent Government survey, over three quarters of respondents said that the ‘experience of workers aged 50 or over’ was a main benefit of having them in their organisation.
In the same survey, 68% of respondents felt workers aged over 50 were equally as productive as their younger counterparts, and 21% felt that they were actually more productive.
What can employers do?
With their wealth of experience and high work rate, it is clear that retaining older workers is highly beneficial from a business perspective. While the retraining and recruiting mentioned in Dr Altmann’s report should be fairly straightforward, retaining the most experienced staff may prove a little trickier, especially if (as is likely) competition in this burgeoning demographic intensifies.
Tailoring a benefits package to the over-50s
Age, gender and the industry in which you operate can have a huge effect on the type of benefits your employees choose – so make sure your benefits portfolio caters for this demographic.
With older children that are likely to have moved out, and far smaller mortgage repayments than younger members of the workforce, older workers will have significantly higher amounts of disposable income.
That income can be invested in a number of more relevant benefits such as healthcare and wellbeing products and services, which older employees are more likely to be willing to exchange salary in order to access.
Planning for life after work
Planning for retirement also takes on more importance. Financial planning can be a complex area, so employers are advised to ensure that their employees have full access to information and advice in this area.
Perhaps not surprisingly, the number of employees showing a preference for workplace pensions increases with age, with 70% of those aged 40 and older choosing to invest in company pension schemes, compared to 56% of respondents in their 20s.
It is clear that there will be a new set of challenges and opportunities facing those who design benefits packages. As British workers get older, and their needs change, tailoring benefits packages to suit their needs is only going to get more important.