It is now widely accepted that the financial sector’s problems during the economic recession of the early 1990s were exacerbated by the policy – also common in other industries – of shedding older workers in previous downturns. The result was a lack of managers with knowledge of the whole business cycle and consequently less well-informed lending decisions.
In recognising this loss of "corporate memory", Barclays Bank, for one, has recently instigated a range of policies to attract and retain older employees. Its efforts have been recognised with an award for outstanding achievement from Age Positive, the government-backed organisation that helps employers to combat age discrimination.
By changing recruitment policies to attract older candidates, encouraging people to stay with the company through long-service awards, allowing employees to work beyond the normal retirement age and other initiatives, the organisation has increased the number of staff over the age of 55 by nearly 400 in two years, and there are now more over-50s than under-21s.
"We aim to ensure that our policies are leading edge," says Delia Huckstep, equality and diversity deputy director. "We have introduced recruitment policies and campaigns specifically targeting the over-60s and have given employees the option to work until the age of 70."
Barclays was one of the first organisations to see the benefits of employing older workers – along with other financial services businesses such as Nationwide Building Society and HBOS, and retailers including Asda and Tesco.
But the message is getting across to other types of business, judging by the high attendance at last month’s Age at Work conference held by the Employers’ Forum on Age (EFA), the employer-led body promoting the business benefits of an age-diverse workforce.
This interest is largely prompted by the twin spectres of legislation on age discrimination, which the UK is due to introduce in accordance with European law in 2006, and the relaxation of rules on pension ages, expected at about the same time, in response to the pensions "time bomb".
The risk of heavy compensation payments for non-compliance is enough of a business case for action for many employers. But there is also evidence that organisations are responding to the falling birth rate by drawing on a wider pool of workers, in a genuine attempt to address the shortfall in "young and dynamic" workers.
While it is important to recognise that any legislation will outlaw bias against youth as much as against experience, the main focus appears to be on recruiting and retaining older workers. As Dianah Worman, CIPD adviser, diversity, says, the impact of demographic changes on the size of the labour market means that employers "are going to have to engage with more mature workers".
DIY retailer B&Q is well-known for employing older people and often cited as an example of a firm that is benefiting from this policy. But the fact that it is often B&Q, rather than other organisations, that receives the publicity would suggest there is not enough evidence of the business benefits of age-diverse policies. Even firms that are committed to employing from a wider cross section often have little evidence to back up their conviction, though this is largely because they are still in the early stages of the process.
Keith Frost, business manager of the Third Age Employment Network, an organisation sponsored by charity Help the Aged to promote opportunities for older people, admits that much of the motivation for diverse age policies comes from a commitment to corporate social responsibility or equal opportunities. But, he says, some firms are making progress in proving the business benefits.
One such organisation is Nationwide. Keith Astill, head of corporate personnel, says the company estimates it saves about £5.5 million a year by having lower staff turnover rates through encouraging a wider age range of employees. The company, which has won awards for its commitment to customer service, has seen a strong correlation between length of service and customer satisfaction. "There is a strong link with how much experience employees have, not only of products, but of life generally," says Astill.
Convinced that customer satisfaction has a big impact on profit, the firm sees employing older workers, as well as the younger ones it has traditionally recruited, as a key factor in improving profit. But Astill acknowledges that taking such a step involves overcoming some myths. For instance, it is widely thought that older people are absent from work more often than younger workers, but Nationwide has found the opposite to be true. Similarly, rather than being underperformers, most over-50s have a better overall performance rate than under-50s. And while staff turnover among over-50s is less than 6 per cent, it is more than 9 per cent among younger workers.
Travel company Thomas Cook has also targeted older workers on the grounds that it felt its customers were more comfortable dealing with experienced sales people. Although the company admits that "it is difficult to get a handle on success rates", it has identified that about a third of its top sales people are aged over 50.
Encouraging as such findings are for those seeking to promote diversity, it is noteworthy that companies leading the way tend to be in retail or financial services, where there is a strong link between employees and customers.
Sam Mercer, director of the EFA, believes this can make the discussion too simplistic. "Many people argue that organisations should reflect their customers, based on evidence from a retail or financial services environment," she says. "But that’s perhaps not so relevant in a factory."
But if the initiatives in these sectors can show that older workers are, for example, as productive as their younger counterparts, then other sectors that are already facing a shortfall in younger staff will start to see the business case.
After all, by taking on a wider range of recruits and giving them the chance to stay longer, employers will be less susceptible to the sort of war for talent that caused such problems at the height of the dot-com boom.