Managing older workers

Newsletter articles

5 May 2016

Employment Studies Issue 23

Annette Cox, IES Associate Director

Demographic changes are increasing the number of older people at work, and legislative changes such as the abolition of the default retirement age, coupled with less advantageous pension arrangements, mean that older workers are less likely to be moving into retirement as early as was previously the case. IES has conducted research into the enabling factors and constraints on employers looking to support those who wish to continue in employment up to and beyond state pensionable age.

Introduction

More people aged 50-64 are in work than ever before, amounting to a total of 7.9 million in the UK [1]. Those aged over 50 account for 29 per cent of total UK employment [2], and these workers are increasingly less likely to be contemplating an imminent move into retirement. Further, over half of workers over 55 intend to work beyond 65 [3]. The UK is likely to need these older workers as the economy could struggle to fill as many as one million jobs by 2035, due to lower numbers of young people entering the workplace [4].

However, up to half of older people leave work by the year before they reach state pensionable age [5]. Some are choosing to leave, as the ‘baby boomers’ benefit from generous early pension provision. Yet many older workers are forced to leave work prematurely: 42 per cent of workers aged between 50 and 64 already have a disability or long-term health condition [6], which are prime causes of early labour market exit. The challenge to support older workers is likely to become more pressing as rates of these illnesses continue to rise, coupled with concern about lack of job opportunities for older people due to a mixture of factors, including discrimination [7].

Against this background, the National Institute for Health and Care Excellence (NICE) asked IES, in partnership with four other research institutions [8], to produce three evidence reviews. The studies sought to identify enabling factors and constraints on employers in implementing workplace practices to enhance older workers’ wellbeing and support workers who wish to continue in employment up to and beyond state pensionable age. These have been used to revise public health guidance for employers and employees on effective and cost-effective ways of promoting and protecting the health of older workers to extend their working lives.

Factors influencing employer initiatives to retain and support older workers

Many options are open to employers to accommodate the needs of older staff and maximise recruitment, retention and wellbeing, including:

• careful recruitment advertising and screening to make jobs attractive to the older worker talent pool;
• flexible working hours, location or working time patterns, including phased retirement, as older people often wish to reduce the amount of time spent at work;
• support for managing work-related implications of ill health or disability via HR/occupational health services, linked to job adjustments in tasks or equipment;
• family care leave and/or sabbaticals as older people often have responsibilities or wish to pursue interests outside work;
• retraining and redeployment (eg laterally or ‘downshifting’ to a role with less responsibility);
• mid-life career reviews in order to maximise career opportunities, establish mentoring, training and talent management plans and instigate retirement planning conversations; and
• line manager training to undertake career and performance management conversations.

In practice, adoption of these techniques is very mixed across sectors. This is partly due to variations in workforce demographic profiles and perceptions of whether skills shortages are related to workforce ageing. There are also substantial differences in how much attention employers pay to equality issues and whether they recognise age as a protected characteristic within employment discrimination legislation.

For employers seeking to maximise health and wellbeing and benefit from employing older staff, factors affecting successful implementation of initiatives to support them include:

• integrating flexible working for older staff as part of a broader diversity policy to ensure that age was recognised as a criterion entitling staff to working time adjustments;
• developing trust between managers and workers so that staff feel comfortable discussing health-related needs and career aspirations, while managers are able to talk about any performance issues;
• flexibility in interpreting HR policies and local level discretion for managers to accommodate staff needs;
• staff education about why older colleagues may need support for their wellbeing and co-operation from colleagues to accommodate any differential treatment of older staff;
• making information about pensions and working-time options as simple as possible through the provision of independent financial advice and avoiding jargon;
• use of workplace champions, including managers and older workers, to promote changes and make different ways of working visible to colleagues; and
• calculating the costs and benefits of supporting older workers to build a credible business case.

The major barriers that organisations can face in offering workplace adjustment lie in the type and variety of jobs available, often linked to sector. These sometimes constrain organisations in the range of alternative opportunities and workplace adjustments they can offer to enable older people to continue working. This underscores the importance of ensuring that older people have access to lifelong learning opportunities, especially for those who are likely to need to move jobs in later life.

Improving employer practice and the evidence base

Despite prominent case study examples of good practice in managing older workers, many studies on employer practices were nearly 10 years old. Since then, both the labour market context and the employment policy context have changed significantly. Recession and more abundant labour supply for some occupations have had some limiting effects on employer need and appetite to develop policies to support older employees. For some employers this appears to be coupled with some lack of knowledge about population ageing and the potential importance of getting the most out of older staff.

But the abolition of the default retirement age means that employers must start considering how to manage older workers, as straightforward transitions to retirement will become more uncommon, driven by the shift to less generous terms in pension provision. Government reforms to increase state pension age eligibility will also lead to people without adequate alternative pension provision seeking to remain in work for longer.

NICE rightly adopts stringent quality criteria for reviewing research on which it bases its guidelines. This revealed some acute research gaps. We found very few process or impact evaluations of interventions to support older workers’ health and wellbeing. And most critically, there are very few longitudinal studies which track the impact of workplace initiatives on the health and wellbeing of individuals beyond the end of their working lives. Unless the evidence base in this area improves, policy makers seeking to promote fuller working lives and healthy retirement will be devising plans based on shaky foundations.

Footnotes

[1] Business in the Community (BIC) (2014), The Missing Million – Illuminating the Employment Challenges for the Over 50s. Available online: http://www.ilcuk.org.uk/images/uploads/publication-pdfs/The_missing_millions_web.pdf

[2] Ibid.

3 McLeod D and Clarke N (2009), Engaging for success: enhancing performance through employee engagement, Department for Business, Innovation and Skills

[4] Chartered Institute of Personnel and Development (2015), Avoiding the demographic crunch: Labour supply and the ageing workforce, CIPD

[5] Department for Work and Pensions (2014), Fuller Working Lives – Background Evidence, DWP

[6] Sinclair D, Watson J, Beach B (2013), Working Longer: An EU perspective, ILC-UK

[7] Altman R (2015), A new vision for older workers: retain, retrain, recruit, Department for Work and Pensions

[8] The Work Foundation, York Health Economics Consortium, the University of Lancaster and the University of Loughborough