Companies that categorise older workers as costly redundancy fodder are ignoring a bigger prize.

It is understandable if policy makers and corporate leaders see the growing overhang of older citizens and workers as a problem. Pension systems are under pressure; social and health benefits for the elderly are costly. Youth unemployment is a curse, from Spain to South Korea, which encourages the misperception that older workers who stay on are keeping the young out of jobs. If teenagers can understand and exploit a world of rapid technological change better than their greying forebears, it seems to make sense to buy grandpa an early retirement.

But the demographic threat could – and should – be recast as, at worst, a challenge, at best an opportunity, as some companies have sensed.

With German carworkers’ average age rising, BMW redesigned a production line so that tools, chairs and flooring suited older staff. At first disparagingly nicknamed the “pensioners’ line”, it was as productive as the rest of the plant and experienced lower absence rates. McDonald’s in the UK found customer satisfaction was 20 per cent higher at restaurants that employed over-60s. Family-owned steel tubing company, Vita Needle, in the US has become a case study in employing older, mainly part-time workers – median age: 74.

Otherwise, the pioneers in this area still occupy a surprisingly narrow set of service industries. They include retailers, hospitals and health insurers but the rest of the corporate world needs to catch up. Companies could start by lobbying to adjust the current definition of “prime working age” as between 20 and 59, to reflect improved longevity.

In Japan, laws to oblige companies to keep over-60s in work are likely to expand job opportunities and improve pay for those approaching retirement. But there are other good reasons why companies should voluntarily encourage retirement-age staff to remain at work:

To maintain diversity. Just as some chief executives have a youthful innovator in their team, so they should seek out geriatric geniuses to sit alongside them. Better still, they could accommodate both and watch them mentor and encourage each other. Unlike 30-year-olds, 60-somethings “aren’t looking for the corporate ladder to climb”, says Gary Browning, chief executive of Penna, a human resources consultancy.

To align themselves with their ageing customers. The same charts that foresee a baby-boom bulge of senior citizens, also map a growing market, best served (for instance, in call centres or customer-service departments) by older people who know about their needs first-hand.

To increase staff motivation. Nearly two-thirds of people aged 65 and over would enjoy working in their current job even if they didn’t need the money, according to Eurofound, an EU research group. Workers who actively choose to come to work should be a precious asset, not a disposable overhead.

To improve flexibility by capitalising on the desire of older workers to work variable hours.

There is a potential dark side: unscrupulous employers could force clapped-out former staff, stripped of their old titles, benefits and dignity, back to the shop floor to earn peanuts. But that approach would be counterproductive, and the testimony of most older workers contradicts the nightmare. “They don’t see it as a status change because it provides what they’re looking for at this stage of life,” says Caitrin Lynch, associate professor of anthropology at Olin College, Massachusetts, who studied the Vita Needle staff.

To ease the trade-off, however, employers and employees need to show imagination and courage. Eurofound says some older staff “self-discriminate”, succumbing to social pressure to retire. But its research also points to innovative solutions. For instance, LBV, a Dutch union, forged a new collective agreement with employers for staff who wanted to work after their formal retirement, to overcome structural obstacles such as lack of insurance cover.

Work is often caricatured as a treadmill. But these days treadmills are aids to fitness. Older workers should, of course, be able to choose to step off if exhausted or to find other ways – self-employment, volunteering, consulting – to keep in trim. But if they want to, they should be able to adjust their pace and keep running. Everyone would be healthier as a result.

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