Older Workers Face Discrimination and Disadvantage in the Labour Market
11 March 2015
- Overcoming barriers to later life working can boost prospects for old and young
- Government needs a strategy for adult skills, career reviews and must improve JobCentres
- Older workers are good for the economy, good for business and good for younger workers too
My Business Champion for Older Workers Report, published today, explains the case for ensuring the over 50s can stay in employment if they want or need to. The Report ‘A New Vision for Older Workers – Retain, Retrain, Recruit’ identifies significant failings in labour market practice and a lack of joined-up Government policy for the ageing workforce which will mean lower economic growth and greater burdens on younger generations in future years. The Report puts forward wide-ranging recommendations to Government, Business, media and individuals themselves which would address these failings to the benefit of us all.
Encouraging and enabling those who want to work longer is an idea whose time has come. As the Report explains, it has the power to increase our country’s economic activity significantly in the coming years. You can link to my Report here.
Older workers could boost the economy: Research by the NIESR shows that if all over 50s worked an extra 3 years this would add a massive £55bn a year to our economy (up to 3.25% to real GDP per year) by 2033 which is equivalent to an extra £55 billion in 2014 GDP terms. Even if everyone worked one year longer it could add 1% to growth.
Higher lifetime income and higher pensions: Enabling those who want to keep working in later life to do so, can mean higher lifetime income for millions of people, more output and spending power in the economy which will mean higher economic growth and better living standards for all of us. If individuals work three years longer on average earnings of £25,000 a year, they would earn an extra £75,000 in their lifetime and could have a pension 13% larger to spend for the rest of their life.
I hope this report marks the beginning of a great national debate. My findings and recommendations have the power to improve the working lives and the lifetime incomes of Britain’s over 50s. They could also transform the long-term future of British business and the economy. The over 50s are a major untapped resource – a hidden talent pool that can boost output, employment and living standards now and in the future. Academic and historical evidence shows that, far from damaging job prospects, keeping more older people in work is associated with rising employment and wages for younger people.
Immigration can’t replace the numbers of over 50s who might leave work:. By 2022, there will be 700,000 fewer people aged 16 to 49 in the UK – but 3.7m more people aged between 50 and state pension age. If the over 50s continue to leave the workforce in line with previous norms we would suffer serious labour and skills shortages, which simply could not be filled by immigration alone.
This does not mean fewer jobs for the young – more older workers means more employment for younger people too: Research shows that having more over 50s in work is associated with both lower unemployment and higher wages for the young. It is not true that each older worker in a job, denies employment to a younger person. There is not a fixed number of jobs and the more spending power in the economy, the more jobs can be created. In an individual company there may be a fixed number of positions, but only over the short-term. If demand for the company’s goods or services declines, it will reduce the number of jobs, but if demand rises, more jobs are created. This also applies to the economy as a whole. So keeping more older people in work, means they have more money to spend. Conversely, if more older people stop work, they will have lower spending power and ultimately there will be fewer jobs for younger people. Historical evidence supports this conclusion too. For example, the 1970s ‘Job Release Scheme’ tried to encourage older people to leave work and ‘release’ jobs for the young, but the policy failed. Rising early retirement was accompanied by higher unemployment for younger people. Economists subsequently concluded that encouraging more older people to retire does not increase employment prospects for young people over time. It can actually have the opposite effect.
And Surveys show people want to work longer: The results of a nationwide YouGov poll commissioned for the report showed that around half of non retired over 50s wanted to still be working between ages 65 and 70 and only 15% of non-retired over 50s said they would want to stop work altogether between ages 60 and 65. If the results are applied to the whole UK population, this suggests 4.8million people want to keep working and not be retired between ages 65 and 70. Currently, there are around 1.2 million over 65s still in work. Therefore, there is potential for a significant rise in later life work. More than one in five of those already retired say they wish they had worked longer (equivalent to 2.3million people nationwide) – with 38% saying they miss the social interaction of work, indeed far more than the 27% who say they miss the income.
Traditional retirement outdated: Traditional ideas of a fixed, one-off, retirement date are changing, as the survey shows that nearly two-thirds of over 50s do not believe working full-time and then stopping altogether is the best way to retire. They prefer a period of part time work first.
Report finds significant evidence of unconscious bias and age discrimination: Older people face major hurdles in recruitment, which can be made worse by lack of confidence, inadequate up to date qualifications, long-term health conditions or the difficulty of combining work with caring. Many over 50s are affected by some or all of these factors, with older women facing particular problems.
Older women can face particular problems in the labour market: The cohort of women who are now reaching their 50s and 60s have been especially disadvantaged in terms of lifetime income and pensions, and face particular workplace barriers. They are more likely than their male colleagues to be carers which can have an impact on how they manage work, and although both men and women can face various health challenges as they get older, women have a particular health issue which is largely ignored in workplace thinking – the menopause. The potential impact of this important life event should be taken more seriously, talking about it more openly in the workplace and introducing support for those affected.
Although the Government has made a start by abolishing the default retirement age, more, much more, is needed. There remains significant ageism in the workplace, with older workers facing barriers to promotion, to training opportunities, to re-skilling and to returning to work after time out due to redundancy or caring.
To address these barriers, the Report suggests that employers and Government need to focus on the 3 ‘R’s:
- Retain – keep older workers and their skills in the workplace through, for example, flexible working;
- Retrain – provide ongoing workplace training irrespective of age and opportunities for mid-life career reviews; and
- Recruit – stamp out age discrimination from the recruitment process.
I hope that the next Government, whatever its makeup, will embrace the recommendations contained in my report. This must not be a political issue, it is of national importance regardless of politics. JobCentres are too often failing older applicants. Older workers need new skills, more opportunities for flexible working and retraining and career review help.
SUMMARY OF KEY RECOMMENDATIONS TO GOVERNMENT:
- Adopt a joined up Government approach to tackling ageism. Consider appointing a national champion for older workers and funding detailed research of the economic, business, health and wellbeing benefits of longer working lives.
- Introduce a national strategy – across Government departments – to improve adult skills, with funding for mid-life career reviews and apprenticeship schemes for all ages.
- Tackle age discrimination by imposing penalties for breaking the law; encouraging whistleblowing against ageism in the workplace; introducing codes of good practice for recruitment or possibly even launching a formal investigation of the recruitment industry if discrimination persists.
- Improve JobCentre programmes for over 50s jobseekers, with more early intervention, one-to-one support, better IT training, CV and social media skills help, and track the outcomes data to see what works.
- Consider introducing temporary two year National Insurance relief for employers of older workers and ensure the current relief for employees over state pension age is more widely known.
- Consider introducing Social Impact Bonds to fund back-to-work programmes and training for long-term unemployed older workers or returning carers, which can deliver savings to Government by lowering benefit spending, boosting tax revenues and reducing health spending.
KEY RECOMMENDATIONS TO BUSINESSES/EMPLOYERS
- Plan effectively for an ageing workforce – with line manager training, age and skills audits and offering flexible working, gap breaks and family crisis leave – to help older workers combine caring with their working life wherever possible.
- Offer training, and retraining, opportunities regardless of age, including for those who need to move from physically demanding roles to lighter work.
- Ensure there is no unconscious bias or age discrimination in recruitment – monitor age of new hires, consider using a strapline in job adverts to confirm vacancies are open to all ages (such as ‘all ages welcome to apply’) .
- Eradicate the gender and age discrimination which impact women in the labour force, with many saying ‘talent progression’ stops at age 45 for women (and age 55 for men). Don’t overlook the needs of older women, especially with support through the menopause.
RECOMMENDATIONS FOR OLDER WORKERS AND MEDIA
- Don’t write yourself off when you reach your 50s or 60s, rethink retirement and perhaps consider flexible working or downshifting rather than stopping altogether.
- Let’s have new images for old people – old age needs a media rebrand -and more older women on visual media: Wizened hands and walking sticks are inappropriate images for stories of older people and contribute to negative perceptions of over 50s. I urge the visual media to use more older presenters, especially females and to stop using the road signs showing stooped over people when writing about the over 50s. I would like the Government to abandon these signs as they feed into the negative subliminal perceptions of old age.
Many businesses have already recognised the opportunities: I have been encouraged by the groundswell of support for reform across a growing number of industries – not least in the Business Taskforce which I established. Two members of the Taskforce – Barclays and National Express – have introduced new apprenticeship schemes aimed at older workers. There are many reasons why businesses can benefit from keeping on or taking on older workers, as well as young recruits.
National Express – Jenifer Richmond, HR Director, says:
“For us taking on and retaining older workers isn’t about compromising or bowing to political correctness – it makes sound business sense. We really value being able to have a good mix of older and younger employees as these often make up our best performing teams. Mixing with and learning from older staff is often the best way in which our younger employees and apprentices can learn, as well as being a great example of being reliable and having a positive work ethic. It is also the case that our customer base is diverse in age, and it is important that we have a workforce that reflects that. As National Express continues to grow and expand as a company, the contribution made by our older workers very much forms part of the plan.”
Steelite International – Louise Griffin, HR Manager, says:
“As a successful British manufacturing business which exports to over 140 countries across the globe, we owe our success to the quality of our workforce… Over decades, we have found that working hard to recruit and retain the right older workers, as well as investing in apprenticeships and developing school leavers and graduates, gives our workforce the correct balance and subsequently enables us to reach the levels of success that we have.”