Date: 05/10/10 Duration: 00:25:41
In this podcast Dianah Worman, diversity adviser, CIPD, Andrew Harrop, Director of Policy and Public Affairs at Age UK and Dave Thomsett, chairman and non-executive director of RJD Technology discuss the business case in support of older workers.
Philippa Lamb: We all know that the age structure of the workforce is rapidly changing and not just in Britain but across Europe and much of the developed world as well. It’s estimated that by 2020 nearly a third of the UK workforce will be over 50.
The government has been thinking about how to prepare for this for decades as have many organisations including the CIPD who’ve been developing the business case in support of older workers. With the announced plan from the coalition government to abolish the default retirement age in 2011 the difficulty now is not only to prepare for this demographic shift but to embrace it as a positive opportunity.
The greater challenge is for the economy at large and future competitiveness which will rest partly on keeping the valuable skills and maximising the economic contribution of older workers.
Andrew Harrop is head of policy at Age UK, Britain's biggest age charity.
Andrew Harrop: The economy at large cannot go on with the current level of skills coming in just through young people entering the workforce we have to improve the skills of people who are already in work, particularly people over the age of 45 or 50 and also we need to help people work for longer so that the number of people available for work increases. If we carry on with just having a fixed number of people retiring at the age of 60 or 65 as in the case in the past there won’t be enough workers.
PL: Dianah Worman is the CIPD’s diversity adviser.
Dianah Worman: I think it’s something like six million job vacancies which will not be filled by younger people coming out of the universities and so on so there's going to be a need from that point of view, the skills agenda to make sure to require businesses to change their approaches to employment because otherwise they won’t be able to fill the jobs that they’ve got vacant.
PL: That’s not all. The fact that many of us are living longer now means that it’s not just organisations that need workers, older people will need and want to work for longer too..
DW: Basically they can’t afford to retire early when they suddenly realise their pension incomes aren’t worth what they were and that, you know, every time you want to buy a new fridge or change your car that's a big spend, you may have a mortgage you’re still paying off and you may have dependents, you know, elderly dependents or even your children who can’t afford to survive on their own, there's often children now staying at home with their parents. So things are changing very fast which will change the appetites people have for working.
PL: If the government’s going to be formulating policies based on the concept of older workers it raises the question of what exactly ‘older’ means. CIPD research shows that perceptions of age can vary. The average perceived age of older is 55 for a woman, 56 for a man.
DW: The concept of being old is different in different economic sectors. There are some economic sectors where the older you are the more you’re perceived to be wiser and bring more to the game that you’re playing, like for example judges have lots of experience don’t they. So in another industry, perhaps in IT or the media, being younger is quite important if you’re going to get on. So yes the concept of how old you are varies an awful lot.
PL: The government announced it’s to sweep aside the default retirement age from October 2011. Like many other organisations including the CIPD Age UK fought vigorously to make that happen.
AH: We campaigned very hard for the abolition of forced retirement, including taking the government to the European Court of Justice. We think it’s fantastic news. We have another year to wait till it finally goes next October but it’s really great. All our evidence shows that tens of thousands of people are being forced to retire each year simply because of their age, they weren't being given a fair chance, there wasn't equality between age groups and that's really what we want. We don’t want special favours for people in their 60s, we want everyone to be given an equal chance.
DW: The concept of the default retirement age was introduced when the Age Regulations were put on the statute books in 2006 and that was a response to the resistance from the employment sector itself in terms of the fear of my goodness how many older people will carry on working? Can we afford to keep them on? They’ll be past their sell-by date. So the attitudes about the value of older workers was very different at that time now our latest survey that we’ve just completed suggests that that's no longer the case, that older people are perceived to be far more valuable than they were previously and that's a good news story.
PL: The CIPD has recently published Managing an Ageing Workforce a joint survey with the Chartered Management Institute, the CMI which found that 59% of those surveyed considered themselves to be working in an age-diverse organisation and a whopping 93% say they value the knowledge and experience of older workers. It’s great news but the paradox is that just 14% of respondents think their organisation is prepared for an ageing workforce. So there's a gap between the positive attitudes towards older workers and the actual policies on the ground and the practices in place. For older people the impetus to continue working is usually financial as well as staying personally fulfilled but what do employers gain by retaining older workers?
DW: Well they’re gaining access to talent and skill which really enables their business to keep ahead of their competitors it’s also profiling the organisation as a good employer and it’s setting the agenda for younger people to aspire to in terms of how they might be treated and think, ‘Well this is a good place to work, I’ll probably want to carry on working for this company,’ and that's quite an important point because younger generations tend to have greater reliances to a profession or their own social grouping rather than to a corporate organisation and I think businesses are going to have to think about that one for the future.
I think it’s about tapping into different perspectives and those different perspectives are very valuable because it exposes the way you’re already doing things and problems or flaws and missed opportunities that might exist. So there are some potential benefits in going more widely than you otherwise would have done.
PL: Managing an older workforce brings its own challenges. There are issues around training, recruitment, redundancy and flexible working practices. We’ll look at them in turn. The survey showed that 91% of organisations offer their employees training, regardless of their age. The problem is that most of them don’t monitor what age the employees are who actually receive training.
DW: No they don’t really know and they’ve done kind of if you like a tick box response to saying, “Oh well we’ll remove age from the factor and everybody who wants to go on a training course can go but they don’t actually check to see whether older people are encouraged to go, whether they want to go, their experiences of training, the way the training is delivered or whether they offer training with different learning styles etc. etc. All of those are very important generally to good training and so looking at the way in which training is delivering value for money by checking it through the age lens is just good sense because everybody who, well basically everybody needs to have an appetite for learning. We’re learning all the time, human beings are programmed to continue to learn, exponential learning is vital but also you need to make sure that people keep their skills up to date like, you know, learning new technologies, new systems, maybe you've got a new package on your software system or whatever, you know, all of that stuff, if you want your workforce to be really in top performance mode then you need to make sure you’re telling them how to do things better.
PL: Age UK offers support to older people about working matters as well as life issues and so it’s in constant contact with the older workforce. Andrew Harrop hears direct from workers in this age group about the issues they face and from his point of view older workers are certainly not getting enough training.
AH: Well if you look at the big surveys that the government runs they show that participation in training drops markedly when people are in their 50s and 60s, compared to the rest of the workforce. Some of that might be because of personal choices that people don’t choose to take opportunities that they’re offered but there is good evidence to suggest that it’s also because they’re either not being offered an opportunity or the whole culture around the training and the organisation’s approach to development sort of is implying to that worker it’s not for you, even if it’s a formally equal process. So organisations need to get beyond looking at their policies and their formal rules and think about the culture and unstated assumptions.
PL: Older workers are more resistant to change than younger ones, more stuck in their ways, unwilling to learn and inflexible. Well stereotypes like these are clearly inaccurate but they’re also a real hindrance to good management.
AH: What we know is there is huge diversity. You cannot make an assumption about someone in their late 50s or 60s, just as you can’t make an assumption about someone in their 20s. You have to look at the individual. Some of course will be a bit resistant to change although it’s usually because of the length they’ve been doing a particular job, rather than their age but there are just as many people who are up for a new challenge, up for change, want to change employers or change roles or recognise that their skills are a bit out of date and, you know, they need to go on training or, you know, go for a new promotion opportunity, just like people of any other age.
PL: At technical consultancy RJD Technology, chairman and non exec director David Thomsett, himself an older worker, has methods to keep his workforce motivated. With 12 full time employees and 20 subcontracted, the youngest person is 42 and the oldest is 71. They’re highly skilled and they have a vast array of experience to offer.
DT: It is very much an older workforce all of whom have had previous experiences either in the Services or in industry. The implications of an older workforce are, in a sense, part and parcel of what we do. We are in the experience business. Our problem is to ensure that our workforce maintains that cutting edge if you like which we’ve employed them for and that they don’t deteriorate in the sense either through no fault of their own or through a change in motivation.
We have three monthly, what we call consultants meetings, gatherings where people report on what they’re up to so there's a cross-pollination within the company and briefings obviously from the management about the fact that we’ve just started a share option scheme or the health scheme. In other words we try and think of the situation they’re in and try and encourage them to be part of their company and enjoy being part of the company.
PL: There's a plethora of scientific evidence to show that older workers are no less effective than younger ones. Even the long touted idea that older workers take more sick days just isn’t accurate.
AH: Most of the evidence on sickness patterns for age groups suggests that it isn’t more costly for the employer in aggregate but the pattern tends to be slightly different. So what you will often see is workers in their 50s and 60s taking less time off once in a while for, you know, perhaps one day or up to a week because of sickness but a small minority may be effected by long term sickness, you know, a chronic health condition. So in aggregate you tend to see it being more or less the same in terms of number of sick days taken across the age range but that doesn’t mean employers don’t need to think very carefully about the management of their workplaces to make sure that they’re promoting good health, making sure that people who do have long term health conditions are receiving good support because an awful lot of the health problems that occur in people’s 50s and 60s, or for a minority, aren’t things that mean you need to stop working.
PL: The days of employees being full time one day and retired the next are numbered. Flexible working is an increasingly popular way of managing work for older employees, it offers better work/life balance and it makes the transition to full time retirement far less abrupt. At RJD this is par for the course. Here’s David Thomsett.
DT: There is no way of working which we wouldn’t consider. We have employees that work four days a week. We have an employee that has another job effectively, he's a non stipendiary vicar, ordained. He disappears to bury people during the day but comes back, fortunately.
DW: The appetite for flexible retirement is there and it makes more sense for the individual they have a change from, you know, perhaps working very long hours through the week and having more spare time to themselves. The business retains their knowledge and experience. It opens up some space as well for succession planning, opens up opportunities for the business to use the individual perhaps as a mentor more than it would have done as well. So I think it’s the best of both worlds, the person wins out and the business wins out and the business can also be more agile in its response to changes in its business objectives, pressures on the business etc.
PL: The CIPD CMI survey showed that 62% of organisations offered flexible working to employees with part time hours and reduced responsibility being the most popular versions, as far as Age UK is concerned though too much focus on presenteeism is affecting the success of flexible working.
AH: If line managers had the confidence to look for good performance rather than looking for a very rigid approach to the pattern of working life, if they focused on what someone is doing and not on how many hours of the day they’re in the workplace or, you know, the particular working pattern they’re adopting they’ll probably find it much easier.
PL: But it’s hardly surprising if line managers are struggling with some aspects of retirement and ageing and the survey suggests that they are, they’re vital to the process but they’re getting very little training on how best to manage an ageing workforce. Here’s Diana Warman.
DW: They are pivotal change agents and they’re not getting the support they need. They’re not being told to understand what the organisation’s approach is, well probably because the organisation hasn’t described its approach but they can actually make the difference between good staff and bad staff. So focusing on the way they can make a difference will be absolutely critical giving them the support and the methods and the ways of dealing with those teams will be what makes the organisation make the process that needs to be made.
PL: Flexible working, mentoring, reduced responsibilities, redesigning job roles, they’re all options but they all have to be discussed on an individual basis. Being able to hold an honest conversation is crucial. David Thomsett gives his advice on how to make it work.
DT: Well I think the important thing is in the discussions that you actually plot some sort of pathway to eventual retirement. It could be if the person is working full time that you offer them reduced hours, it could be a change in job to some extent, might be moving out of one project into another, perhaps less demanding. There are any number of ways of doing it but obviously you try to do this in a consensual way and I’d like to think that it, certainly in a company our size, it’s possible to do it with the person being happy to finally retire when he feels he's had enough and you feel it’s time for him to go.
AH: The other thing that line managers get very worried about is conversations about retirement and this is a difficult one because sometimes people do worry if I mention “When are you thinking of leaving? When are you planning retiring?” that will be seen as in some way discriminatory or, you know, making a suggestion that it is time for that individual to go.
This is an area where I think both the government and CIPD, HR profession collectively, need to get lots of good support and advice down to frontline managers, down to HR departments, because you can’t ignore the fact that someone will retire, will leave, you do need to have an open conversation but not a conversation about when are you going, name a date, it’s got to be a conversation about what are the sorts of new challenges you want either with us as a company or somewhere else, can we help you try something out new here, can we help you have a flexible mix so that you’re maybe reducing your hours or doing a slightly different role here so you can do other things as well or prepare for when you aren’t working at all. That’s a different sort of conversation which line managers and frankly HR professionals as well aren’t used to having. If you just leave it, don’t talk about it, you’re more likely, I think, to get into situations where you’re being challenged for discriminatory practice.
PL: David Thomsett and his colleagues at RJD clearly deal with the issues of age with openness, communication and fairness. They have the advantages of being an SME, retirement can be something smaller organisations find easier to manage.
AH: The most interesting aspect of SME practice on older workers is their attitude to retirement, they’re so much more flexible than some of the large employers with big, bureaucratic, policy-led approaches to the workforce. Small employers tend to look at the people individually and if they’re making a good contribution so you actually see fewer people forced to retire from SMEs than you do from large employers because it tends to be a case by case decision, a personal conversation between people who know each other. The downside is that without HR support you also tend to have pockets of very poor practice so you have people who don’t even know the law, don’t even know that it’s illegal to discriminate on the grounds of age.
PL: We’re in a difficult economic period. It’s hard for everyone but the evidence shows that currently older workers are one of the groups being harder hit with limited recruitment activity.
AH: But that's incredibly short term because this current period of high unemployment will pass and in five to ten years time there won’t be enough, particularly young people, coming into the labour market for employers to meet all their skills needs.
DW: They will have to change their strategies in order to look in different pools, we call them, so that there may well be some organisations that start increasingly to think about trying to attract older people but in order to do that how they do it will depend on the person’s appetite, needs, preferences, the offerings and so on which is where you have to shake off the traditional ways of doing things because they’re no longer relevant and you have to find new ways of delivering.
PL: Age UK confirm what the statistics appear to show, older workers are experiencing more long term unemployment than younger ones.
AH: It is very difficult at the moment, particularly for people with slightly outdated skills or perhaps sort of a moderate health problem. We’re seeing the numbers of people over 50 in long term unemployment, over 12 months, really begin to rise very quickly and that's obviously a great concern to us. Over the last year the number of people over 50 who are long term unemployed has increased by 50%. It’s a big increase isn’t it? And that is partly a delayed effect because of course it takes you 12 months of being unemployed until you reach that group so this is the impact of people losing their jobs sort of at the first phase of the economic crisis and it could get a lot worse, particularly as we know that the public sector has a skew towards older workers compared to the private sector. So the sorts of redundancies we’re likely to see could have a disproportionate effect on older workers but we’re likely to see hundreds of thousands, if not more, public sector jobs disappear. A lot of those will be older workers.
PL: It may well be as the economy recovers that employers begin to recruit older workers, however, the UK population is getting older and we can’t afford to leave the issue of employment to the vagaries of the economic cycle. We’ve got to stop seeing this as a conundrum and start treating it as an opportunity. Legislation can help but it only goes so far. Diana Warman.
DW: Ultimately the whole agenda is about culture change and more open culture, better dialogue between individuals, better recognition of what the business is about and where it needs to go, a better space for all individuals to act and do their jobs in a better way to make a real difference.
AH: There is only so much that pure enforcement can do. The sorts of areas it can help with is, I think, particularly around recruitment and dismissal or retirement because they’re very black or white issues but it’s the general culture of how a workplace feels, does it feel like it’s a conducive environment? Are you being offered the right opportunities just like anyone else and that is all so much more grey rather than black or white but you can’t just rely on legislation.
PL: As an older worker himself David sees the success of an ageing workforce as being reliant on a series of psychological contracts between employer and employee.
DT: I think the older worker needs to recognise that he cannot take for granted the fact that he's going to be employed. I think that is a major mistake that some people do fall into and particularly with the encouragement of the new legislation is that he somehow has a right to a job. If he wants to continue employment he has obligations which he must honour. I think those obligations are as I say in particular his professional competence. He must obviously have the personal communication skills and be able to work with other people, in particularly a multi-skilled, multi-aged team. He must be a lifetime learner. He must like actually gaining knowledge.
However if you've got grey hairs you still have to gain the respect of your peers and you have to earn it, it isn’t a given and I think you've got to maintain your enthusiasm as well and motivation and ultimately I think you've got to have a sense of humour.
PL: So that's one side of the contract well what about the employer’s side of the bargain? What else does the organisation need to offer.
DT: I think that as an employer we have to be careful that we don’t exploit or apply pressure for people to work longer hours than they’re capable of doing. Stamina is an issue with old people, whether they pretend they have it or not and you have to respect and encourage others to value the contribution of older members of staff.
PL: The role of HR is key to driving better line management performance and it can also play a role in driving organisational performance and culture change. This is particularly important when 34% of the organisations surveyed said that board level recognition of ageing workforce issues is non-existent. For Diana Warman HR’s role is vital.
DW: It has to have a lot of foresight, it has to understand the nature of the business. It has to be able to indicate what kind of responses is the business wanting to make in order to survive in the long term. So it’s got to keep thinking ahead of the game and keep on its toes.
PL: To find out more about the Managing an Ageing Workforce research and the CIPD’s work on the business case for diversity, take a look at the show notes. You'll find them at http://www.cipd.co.uk/podcasts.
Next month I’ll be meeting the CIPD’s incoming president Gill Ryder. As head of profession for civil service HR she’ll be sharing her thoughts on the future, her own key role in public sector HR and her ambitions for her time as CIPD president. Join me then.