How Prepared are You? Episode Two: An Ageing Workforce
The world is changing, how prepared are you?
As I look at all of the changes occuring around me, both for businesses and the world as a whole, what I’m particularly interested in is this question of extended working, and how organisations are preparing for the effective and empathic management of an ageing workforce in the years to come.
What are organisations doing to support this requirement for diversity within business?
And how much of an issue is it really going to be? The stats talk for themselves:
- One in four people in the UK is aged over 50
- Within 20 years, nearly a quarter of the UK population will be aged 65 or over
- People are now spending an average of 7 years longer in retirement than in the 1970s
- In 2010 the numbers of employed aged 65 and over had reached 900,000 (doubled since 2001)
Against a back drop of uncertain health, low birth rates, increasing life expectancies and a potentially reducing migrant workforce, these trends will lead to greater pressure on the working-age population to support retirees, financially and through care. All of which will lead to uncertainty in our ability to retain and source key, motivated personnel.
Embracing the future
From the organisational perspective – one way to help reduce this pressure would be to encourage workers to delay retirement and remain within the labour market for longer if they are able and willing to do so. Albeit changes to policy and culture may be necessary to achieve those aims.
If we look at this from the individuals’ perspective people are consciously choosing to stay in employment longer:
- People in their 50’s are being financially squeezed – supporting dependent children, university fees etc, as well as older parents with care needs, so their own preparation for their retirement is taking a back seat
- The need to work longer before they can receive their State pension is a key factor for many and this is the generation who are also likely to have less in the way of an employer pension provision due to changes in employer pension provision and overall lower interest rates on savings
- A third key factor is the individuals’ desire to preserve their fitness both physically and mentally, and maintain a social connection
So how is your organisation planning to reap the benefits of this generation to ensure a positive and rewarding experience for both the individual and the business?
Writing this blog made me consider my own parents who had two very different experiences related to retirement; one very positive, and one that was potentially devastating.
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When my father reached retirement age at 65 his company asked him to stay on to support key projects and transfer his knowledge and experience to younger recruits in the business. He readily agreed to continue two days a week (I think the prospect of 24/7 with my mother was a factor in his decision!). He stayed part-time until he was 70 and he decided to finally hang up his brief-case. The experience was a win / win for all and suited him both financially (he’d been affected by the Equitable Life Pensions collapse in the 90’s), helped to maintained his fitness, mentally as well as physically and enabled a smooth transition into retirement; one that he was by then looking forward to.
My mother on the other hand had an awful experience when she was told at 60 that she had to cease employment. After 20 years of excellent service with hardly a day sick and still fit and agile, the surgery she worked at decided to up-hold her original contract to bring in new staff. I remember her being absolutely mortified. She lost her self-confidence and her sense of self-worth plummeted. Luckily for us (her family) we were able to coax her into applying for a new part-time position at a local hospital, which she was awarded, loved and where she worked for another 5 years. When she retired it was on her terms and she felt good having given her best to her employer.
Supporting the individual
There are many different reasons why people want to stay in employment – fitness, social contact, mental stimulation, finance, to name a few; some by choice and some out of necessity. The good news for the individual is that legally this is now an option that can be negotiated with the organisations that they work with.
From a business perspective this prospect can have both positive and negative impact if not considered and future planned for:
Some implied benefits of retaining the workforce could be to:
- enable the business to retain key knowledge, skills and capability and provide time to implement effective succession planning
- potentially reduce the costs of recruitment and training (although the latter is important however long someone is in a role)
- provide the benefits of a diverse age group; different approaches, attitudes and respect can all add value to a sustainable business
- to help plug the 7.5m skills gap
Some implied threats caused by an ageing workforce might:
- arguably limit opportunities for innovation. The stereotypical quote ‘doing what they’ve always done’ and seen it all before’ may be real in some circumstances
- increase the need for businesses to adapt to offer flexible working ie part-time due to personal choice or sickness
- have an impact on perceived costs related to flexible working
- restrict career opportunities for those coming into the business or industry due to limited movement of staff already in the roles
- provide conflict in relation to the type of role they can physically do such as a problem in some manual working roles.
When it comes to the challenge of an ageing workforce the evidence speaks for itself.
People are simply not old at 60 anymore.
However there is also huge scope for opportunity in this ‘challenge’ too; and it’s by considering some of the questions posed above, that organisations can better understand how to get the most out of these valuable employees in a way that complements their vision and objectives of the coming years.
In truth, whether you are an individual or a business, the first question you might want to ask is “where do you want to be in 5-10 years?”
And how prepared are you to get there?