Why businesses will miss out by not hiring older staff

There is no denying that society is getting older. For businesses to be successful in the future, they need to take competitive advantage of an older workforce.

Sometimes the world of work can feel that it is all about youth. Younger colleagues get the promotions, the best clients, the best training. Social events and team building activities centre on the interests and lifestyles of people in the 20s and early 30s, leaving colleagues who are older feeling left out. If you are over 50, applying for a job can seem futile.

Yet the reality is that in the UK, the workforce is getting older, just like the population at large. The average age in the UK now exceeds 40 for the first time. To put that into a global context, the average age in the US is around 38, in India it is 29 and in Brazil 31. In the UK the trend towards older age is set to continue and within 30 years one in four people is expected to be aged 65 and over. Over the same period the working age population aged between 50 and the state pension age will increase by around eight million people.

Success increasingly tied to older workers

This trend will have a profound impact on the world of work. The productivity and economic success of the UK will be increasingly tied to that of older workers. More older people are due to retire than there are younger people entering the workforce, so a big gap will open up, creating labour and skills shortages.

To some extent, this situation is already upon us, although its impact has been mitigated by access to workers from the European Union. However, the UK’s exit from the EU will limit employers’ options. Already, there are 132,000 fewer EU workers in the UK compared to a year ago, and the number is expected to continue falling.

One of the most visible consequences of this age shift is the skills shortage in the NHS. A rapidly-ageing workforce is already affecting frontline care. A recent survey by the Royal College of GPs found that hundreds of practices relied on family doctors who are approaching retirement age. At the same time, the Royal College of Nursing has warned that around two out of every five nurses are due to retire within the next decade.

>See also: Age discrimination in the workplace is slowly becoming passe

Positive choices

There is now no default retirement age. While this does give the option to stay in work beyond the traditional retirement age of 65, the reality is that many will choose to leave work before then. Changes in the law have made it possible to release funds from pension schemes early. This, coupled with money released by downsizing the family home, means many older people can choose to retire early or to work part-time.

Yet millions of older people do not have the financial independence that will help them to make these kinds of positive choices. The danger is that many will struggle to remain in work because of a culture that its hostile to people in later life and suffer a fall in living standards as a result. Today the employment rate currently declines from 86 percent for 50-year-olds, to 65 percent for 60-year-olds and 31 percent for 65-year-olds.

The business case for an age-diverse workforce is clear. Despite this, employers continue to organise workplaces around an outdated, inflexible model that no longer works. Earlier this year a report by the Parliamentary Women and Equalities Committee found that only one in five employers were discussing the ageing workforce strategically and nearly one-quarter (24 percent) admitted they are unprepared for growing numbers of older workers. It concluded that the talents of more than one million people aged over 50 who want to work are being wasted because of discrimination, bias and outdated employment practices.

>See also: SMEs failing to benefit from age diversity in employees

Embrace change to thrive

Failure to adapt to this new reality of an ageing workforce will surely condemn many businesses to the scrapheap, while those who embrace change will thrive.  A positive approach to the challenges of an ageing workforce is not just the right thing to do, but is also good for business.

Faced with these challenges, employers must rethink the way they recruit staff and invest in training and development.  There are a number of steps they can take, including:

  • Shift in attitudes to older workers. Negative attitudes towards people in later life, taking the form of outdated stereotypes, unconscious bias, and age discrimination, can prevent them from staying in or returning to work. This means that their skills and experience are needlessly lost to organisations.
  • Improve workplace design, encouraging access to new technologies, and adapting human resources policies and working practices. Flexible working hours is important, particularly for those with caring responsibilities. Evidence shows that carers often withdraw from paid work and do not return. They are less likely to work full-time and more likely to be economically inactive.
  • Provide opportunities for training and re-skilling opportunities throughout people’s careers. Longer careers, a more dynamic labour market and the impact of automation on jobs mean that lifetime learning and training will be essential to the future of an ageing workforce. Job-related training will become as important to people in mid-life as at the beginning of their career. If successful, this can help the UK’s workforce, increase productivity and ensure people have higher levels of financial, social and mental capital going into later life. Failure will likely result in skills gaps at the same time as older people are leaving the labour market.

Encouraging older people to remain in work will also help society to support growing numbers of dependents, while providing individuals with the financial and mental resources needed for longer periods of retirement. Supporting fuller and longer working lives, removing barriers to remaining in work, and enabling workers to adapt to new technologies and other fundamental changes to the world of work are critical to the nation’s economic wellbeing.