COVID-19 has negatively impacted employment for older workers and marks the biggest annual fall in employment since the 1980s, according to new research from the think tank Resolution Foundation.
They found the unemployment rate for the over-50s was “twice as big” as for workers aged between 25 and 49; where the pandemic has created a “U-shaped” employment shock affecting both younger and older workers while whilst middle-aged groups have fared better.
According to the ONS, there were “109,000 more unemployed workers aged 50-64 between December and February 2021 than the same period a year before”, suggesting that the economic impact of the pandemic played a significant role in this outcome.
When looking for work, older workers take longer than other groups, with “fewer than two in three managing to find work within six months.”
Despite the youngest workers facing the largest drop in employment due to COVID-19, they return to the workplace faster than older workers: “Six months after becoming unemployed, nearly three-quarters of 16-29-year-olds (74%) had returned to employment, compared to fewer than two-thirds of the over 50s (62%).”
The research also found that older workers “face the highest income hit of all age groups” when they re-enter the workplace, with “typical hourly earnings” dropping by 9.5%.
This fall in employment for the over 50s follows years of “near-continuous” employment for the group since the mid-1990s. Even during the years of the financial crisis, unemployment levels for men over 50 only saw a small decline. Employment levels for women aged between 50 and 64 were growing nicely since 1990 (46%) and had reached a “record high” (68%) before the pandemic.
This period has affected the retirement plans of many older workers, either forcing them to retire earlier with fewer funds or having to work for longer.
To help older workers, the Resolution Foundation advises that retraining opportunities are essential and believes the Government should ensure its coronavirus employment support schemes benefit older workers too. They also suggest they provide “a tax credit style supplement to overcome the wage penalty they face when returning to work.”
Agata Nowakowska, Area Vice President EMEA at Skillsoft said: “The significant decline in the employment rate for the over 50s means it is crucial that older workers aren’t forgotten in government initiatives to help people get back to work. Indeed, the advantages of a workforce that successfully blends youth with experience are hard to dispute.
“Mature colleagues have practised communicating ideas, working with people at different levels of an organisation, and troubleshooting issues. In short, ‘maturity’ and lived experience remains invaluable to an organisation, bringing a depth of thinking that provides balance to a younger workforce and makes for a very strong team.
“Multiple studies have found that gender, ethnically and culturally diverse organisations perform better. A University of Zurich study, for example, found that an increase in age diversity can have substantial positive productivity effects, particularly in innovative and creative companies. Employers who invest in the wisdom brought to the workplace by maturity can foster the attributes that many contemporary business leaders say they value the most. From creativity and innovation to emotional intelligence and an ability to cope under pressure, investing in workplace maturity is always money well spent.”
Nye Cominetti, Senior Economist at the Resolution Foundation, added: “The pandemic has had a U-shaped effect on people’s employment prospects. While the youngest workers have been hardest hit by the crisis, older workers have also been badly affected, experiencing the biggest annual fall in employment since the 1980s.
“The cost of unemployment for older workers is particularly high. They take the longest to return to work – with fewer than two-in-three returning within six months – and experience the biggest earnings fall when they finally return to work.
“In the face of the current crisis, unemployed older workers may have to either work for longer to make up for these negative employment effects, or retire earlier than they planned to.
“The Government must ensure that older workers are not forgotten in the design and implementation of schemes created in the wake of the crisis to help people back into work.”
To read the Resolution Foundation’s research in full, please click here.