Employers must ditch their ageist attitude to the mandatory retirement age and realise the benefits older workers can bring to their businesses, from lower training costs to a wider skills base says Duncan Brown
Joyce works for a large UK retailer. She and her husband had their retirement planned. They would retire at 63, go on a Caribbean cruise and then enjoy life on their company pensions. Sadly, two months before the trip, her husband died.
Joyce had six weeks off work and then decided to come back on a part-time basis. Tax regulations change next year, so by the time she is 65, she’ll be able to carry on working and start to draw her company pension, something that she couldn’t do at present. In a tight labour market, with 90% of employers reporting skills shortages, her employer is only too happy for her to carry on, and she enjoys the company of colleagues and customers.
Joyce’s example is not unusual. Far-sighted employers are making themselves more attractive to older workers. Asda, for example, employs more than 5,000 staff over the age of 60. There are two main reasons.
One is the just-mentioned skill shortages, driven by changing demographics, which will see more over-65s than children in this country in two years’ time. Age is no predictor of performance. Research studies show that the over-50s, far from being dozy old buffers, are often more loyal and effective in customer service roles than your average teenager.
The other main reason for action is the European Union’s age discrimination directive. A CIPD study found that a quarter of us have been on the wrong end of age-related judgements. Job advertisements still routinely specify required age ranges and demand “young, dynamic” individuals.
The UK government has committed to implementing age legislation by October 2006. As part of its BeReady initiative, CIPD is providing practical guidance to employers on age-diverse employment, from recruitment to the sort of flexible retirement that Joyce and her employer are benefiting from.
So why has the government delayed for almost a year in publishing its draft regulations for the new legislation, promised last summer? It’s because there has been a huge controversy over the issue of a mandatory retirement age. To what extent should the practice of forcing employers to retire simply because they have reached a certain age be permitted? Should Joyce’s employer be allowed to fire her because she has become 65?
One might think that staff-short, recruit-hungry employers would be queuing up to get and keep older workers. Nationwide Building Society, Ford, BT and Domestic and General have all seen significant benefits from increasing their employment of older workers.
But no, lining up against CIPD’s support for the removal of all age barriers we have the main employers’ bodies including the CBI, Institute of Directors, and manufacturers’ organisation EEF. They apparently fear that their members will be overrun by swathes of infirm and senile employees if they don’t retain the right to kick them out at 65. And this is despite the fact that many of them have been switching to less generous defined contribution pensions, increasing the likelihood that their employees will not have enough pension to live on when they reach 65.
To broker a compromise, the government has
proposed a national default retirement age of 65, with a right for employees to request to work beyond that. There are some doubts as to whether this would be compatible with EU law.
But even if it is, what is the possible sense in it? Is Joyce going to be fit for work at 64 years and 364 days of age, but then unfit at 65? The vice-president for design at General Motors is 72 years old. His favourite hobby is piloting one of his collection of planes - jet fighters.
The CIPD believes the whole concept of retirement needs to be rethought by government and employers. A more flexible and graduated approach is required to meet both employees’ and employers’ future needs, incorporating flexible working, flexible pensions and lifelong learning.
Listen to Mark Watson at Marks and Spencer: “We revised our retirement policy in 2002, scrapping a mandatory retirement age. It helps us to retain high-calibre people, has widened our recruitment pool and saves on training costs.”
So don’t wait for the legislation. Start a march on the demographic curve. Start making age work for you now, or it could work against you and your organisation.
n Duncan Brown is assistant director general, Chartered Institute of Personnel and Development
Joyce works for a large UK retailer. She and her husband had their retirement planned. They would retire at 63, go on a Caribbean cruise and then enjoy life on their company pensions. Sadly, two months before the trip, her husband died.
Joyce had six weeks off work and then decided to come back on a part-time basis. Tax regulations change next year, so by the time she is 65, she’ll be able to carry on working and start to draw her company pension, something that she couldn’t do at present. In a tight labour market, with 90% of employers reporting skills shortages, her employer is only too happy for her to carry on, and she enjoys the company of colleagues and customers.
Joyce’s example is not unusual. Far-sighted employers are making themselves more attractive to older workers. Asda, for example, employs more than 5,000 staff over the age of 60. There are two main reasons.
One is the just-mentioned skill shortages, driven by changing demographics, which will see more over-65s than children in this country in two years’ time. Age is no predictor of performance. Research studies show that the over-50s, far from being dozy old buffers, are often more loyal and effective in customer service roles than your average teenager.
The other main reason for action is the European Union’s age discrimination directive. A CIPD study found that a quarter of us have been on the wrong end of age-related judgements. Job advertisements still routinely specify required age ranges and demand “young, dynamic” individuals.
The UK government has committed to implementing age legislation by October 2006. As part of its BeReady initiative, CIPD is providing practical guidance to employers on age-diverse employment, from recruitment to the sort of flexible retirement that Joyce and her employer are benefiting from.
So why has the government delayed for almost a year in publishing its draft regulations for the new legislation, promised last summer? It’s because there has been a huge controversy over the issue of a mandatory retirement age. To what extent should the practice of forcing employers to retire simply because they have reached a certain age be permitted? Should Joyce’s employer be allowed to fire her because she has become 65?
One might think that staff-short, recruit-hungry employers would be queuing up to get and keep older workers. Nationwide Building Society, Ford, BT and Domestic and General have all seen significant benefits from increasing their employment of older workers.
But no, lining up against CIPD’s support for the removal of all age barriers we have the main employers’ bodies including the CBI, Institute of Directors, and manufacturers’ organisation EEF. They apparently fear that their members will be overrun by swathes of infirm and senile employees if they don’t retain the right to kick them out at 65. And this is despite the fact that many of them have been switching to less generous defined contribution pensions, increasing the likelihood that their employees will not have enough pension to live on when they reach 65.
To broker a compromise, the government has
proposed a national default retirement age of 65, with a right for employees to request to work beyond that. There are some doubts as to whether this would be compatible with EU law.
But even if it is, what is the possible sense in it? Is Joyce going to be fit for work at 64 years and 364 days of age, but then unfit at 65? The vice-president for design at General Motors is 72 years old. His favourite hobby is piloting one of his collection of planes - jet fighters.
The CIPD believes the whole concept of retirement needs to be rethought by government and employers. A more flexible and graduated approach is required to meet both employees’ and employers’ future needs, incorporating flexible working, flexible pensions and lifelong learning.
Listen to Mark Watson at Marks and Spencer: “We revised our retirement policy in 2002, scrapping a mandatory retirement age. It helps us to retain high-calibre people, has widened our recruitment pool and saves on training costs.”
So don’t wait for the legislation. Start a march on the demographic curve. Start making age work for you now, or it could work against you and your organisation.
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