Declining birth rates mean there are more individuals leaving the labour market than joining it. The employment rate of workers aged 50-64 has doubled over the last 30 years, with those aged 50 and over already making up more than 30 per cent of the UK’s workforce.
As the UK becomes more reliant on older workers to meet labour and skill shortages, the world of work will change. Below are three areas that employers must start addressing if they want to avoid legal disputes.
Talent management
With more employees working beyond 65, succession planning for those in senior or business-critical roles will become even harder, as will retaining their successors.
Employers will have to decide if they can justify a set retirement age or measures such as capped-term appointments (like the Governor of the Bank of England), skills transfer schemes or flexibility schemes that give employers a right to move employees sideways.
Each of these could constitute direct or indirect age discrimination, so employers need to establish that they can be objectively justified. This means showing the measure is a proportionate means of achieving a legitimate aim. While there are a number of potential legitimate aims an employer could point to, like the efficient planning for the departure of staff and intergenerational fairness, proving proportionality will require significant evidence.
It may be that succession comes to be less of an issue, as it becomes more common for people to move company or change career than stay in post for a long period. Employers may also find employees are more open about their long-term plans if they encourage retirement planning via regular career and financial MOTs.
Flexible working
As the UK workforce becomes older, demand for flexibility is also growing. According to a 2018 survey of UK workers aged 50-plus, half wanted to gradually wind down to retirement, with 70 per cent wanting to work fewer days each week and 44 per cent fewer hours each day.
Employers such as BT and Bosch have put in place flexible working schemes which, while open to any age, are intended to engage and retain older workers. This is shrewd given the increasing importance of this generation.
Clear policies and management training will, however, be vital to avoid an obvious source of litigation. For example, if an employer only redesigns work so there is flexibility in how and where a job is undertaken, this may indirectly discriminate against older workers as it would make accommodating a reduction in work more difficult.
Likewise, some requests from older workers may stem from a deteriorating health condition that constitutes a disability. Refusing such requests could result in claims of age and disability discrimination.
Management across generations
With age-related jokes and stereotyping seemingly acceptable (ask any millennial) and a recent survey reporting that more than a third of employees already believe there is age discrimination in their workplace, managing up to five generations will see disputes rise unless we take age more seriously as a protected characteristic.
Employers may struggle to understand how to manage an ageing workforce. In many scenarios, it will be necessary to treat people of all ages equally (flexibility, career development, promotion) and without age-based bias. In others, employers risk discriminating against older workers if they do not take into account the impact of ageing. For example, there is evidence that while our dexterity deteriorates with age, our muscle memory increases, making us slower but more accurate. If you measure performance on speed, not accuracy, this risks indirectly discriminating against older workers. Judging when to treat people equally and when to treat them fairly will be key in responding to our ageing workforce.
Andrew Secker is a partner at Mills & Reeve