An idea past its sell-by date

More than 50 years have passed since some of the first research into older workforces praised the benefits of phased retirement for the psychological and physical welfare of employees

Yet, despite an ageing population, the UK still has a default retirement age of 65 and opportunities for older workers remain limited.

The demographics are not in employers’ favour. According to a 2006 City & Guilds report, Dormant Skills Untapped, from 2010 onwards the number of people reaching working age will begin to fall by 60,000 every year. Add projected increases in new jobs into the mix, and between 2010 and 2020 the UK will need to attract 2.1 million entrants to the adult workforce.

That need, concludes the report, can be met only through a combination of most adults working longer and an increase in the number of adults, such as unemployed people and mothers, re-entering the labour market.

Many employers have reviewed their HR policies since the introduction of age discrimination legislation in October last year, and several organisations – including the Foreign & Commonwealth Office and the Department for Work and Pensions (DWP) – have abolished the retirement age altogether. But many older workers still feel undervalued.

Last year Heyday – a membership organisation backed by Age Concern – conducted a national survey of those approaching or already in retirement. Some 95 per cent of respondents over 50 said they believed their age counted against them when looking for a job. “Sixty-four per cent said they found it impossible to get a job within 10 years of retirement age,” says Ailsa Ogilvie, Heyday director. “Yet 80 per cent wanted to be active and stay in work.”

According to Chris Ball, chief executive of The Age and Employment Network (TAEN), retirement is not the only age issue on which the UK has been sluggish. TAEN’s latest report, Managing the Ageing Workforce: An Introductory Guide to Age Management for HR Professionals, stresses the need to grasp the holistic picture and adopt an “age management” approach.

“Age management is the HR response to population change and organisational needs,” Ball says. “I don’t think the UK has really got going on this. Age Positive [the government’s age campaign] did good work, but it is lacking in depth of analysis.”

TAEN’s report sets out some of the measures that HR could take as part of an age management strategy. These include analysis of demographics, assessment of age risks to the organisation, health support measures and leadership.

“It implies considerable responsibility on the part of the HR profession to identify and lead the changes needed,” Ball says. “Currently, it is being led by diversity professionals and is often seen as something simply to press for the human rights of individuals, get rid of stereotypes and enhance opportunity.

“But that is only part of the story. It should also be about understanding the assets that particular groups bring to the organisation, knowledge management, understanding demographic change and a much more dynamic concept of careers.”

Despite the shortfall in the overall picture, much good work is being done in individual businesses. “The age agenda opens up new perspectives,” says Dianah Worman, CIPD adviser, diversity. “People are starting to think about joined-up approaches – for example, the relationship between age and disability, or flexible working – but the experience of leading-edge employers is that the more you have done, the more you need to do.”

Rachel Krys, head of communications at the Employers Forum on Age, believes that it is simply the term “age management” that has not caught on in the UK.

“The employers that really took on board the early business case are tackling this,” she says. “B&Q took it up well before legislation, looking at demographics in the UK and its sector and how to manage the whole process, including age profiling, succession planning and targeted training.”

Companies that have chosen to operate without a fixed retirement age have identified a range of benefits, including reductions in absenteeism – B&Q reported a 39 per cent drop – and recruitment costs. At HBOS, one of the main concerns about abolishing a fixed retirement age was performance management. But, says Charlotte Sweeney, head of diversity, many of those concerns – for example, about people staying on beyond their peak performance – have been allayed since the company introduced an open-ended discussion process in appraisals that asked staff where they saw themselves in five years’ time. “A robust performance management process is key,” she says.

With attention in the UK focused on retirement age, getting rid of it might seem to be essential to eliminating age discrimination. “It certainly sends out the message that you are serious about getting rid of ageism,” says Faizal Musa, diversity project manager at the Co-operative Group.

But, adds Stephen McNair, director of the Centre for Research into the Older Workforce (CROW), it is not the only factor. New research by CROW for the DWP, Employer Responses to an Ageing Workforce: A Qualitative Study, shows that some firms, apprehensive about the implications of legislation, have actually introduced mandatory retirement since 2006. “That’s exactly the opposite of the intention of the regulations!” he says.

McNair believes retirement is the focus of debate because it is a fixed point. However, he suggests the problem is really more of a labour market one. He cites organisations in the DWP research that successfully retained workers into their seventies, yet could not remember ever recruiting anyone over 50.

“The labour market seizes up after 50,” he says. “People say that if they draw attention to their age then they are at risk of discrimination and redundancy, so they would rather stick in a boring job than risk losing it altogether.”

“Retirement isn’t the only issue, but it was the key one for Heyday members,” agrees Ogilvie. Heyday wants to see more organisations focusing on working environment, training, planning and job design, and implementing good health and safety practices. “Even a good light over a desk for reading will make an older worker more effective,” she says.

BT – which also abolished the retirement age in October 2006 – is one organisation that is considering many of these questions. “We have a lot of people climbing poles or down holes,” says Becky Mason, senior people and policy manager. “It was a question that came up internally – what to do if people are not able to do these jobs? But if someone has a bad knee, we treat them exactly the same regardless of age.”

The company’s approach also encompasses life planning, looking at people’s career paths and at “life transitions” – family, caring responsibilities, community responsibilities and retirement. “None of these stages are age-specific,” says Mason. “We are looking to develop our work-life balance model around that concept, and see what interventions we can put in place to support our employees.”

Recruitment is also a central factor in reducing discrimination, and it is not only about removing age information from application forms. HBOS and the Co-op have changed their graduate recruitment processes, opening them up to graduates of all ages. “The perception of graduates has changed,” says Charlotte Sweeney. And so has the language: “I’m not hearing people saying ‘bright young things’ any more,” she says.

The Co-op actively markets to the Open University. “We have had applicants aged over 50,” says Faizal Musa, although none has yet been successful. “We have plenty over 30, and we have testimonies from project managers who have had older graduates saying how good they were.”

Chris Ball of TAEN remains concerned that the UK – and the HR profession – faces a bigger challenge than it realises. “The risks are not going to disappear,” he warns. “Knowing what they are, and shaping policy accordingly, is what is required.” Lifelong learning and occupational health issues will come to the fore, he believes, along with a new specialist discipline in HR.

“Someone has to stand back and say: ‘There is a scientific approach that goes beyond piecemeal responses,’” Ball says. “I can see a situation in a few years’ time when age management is as much a discrete division in the HR profession as employee relations or reward.”