Companies cannot afford to ignore older workers
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Why, asked Philip Larkin in his poem “Toads” (1954), “should I let the toad work/ Squat on my life? Can’t I use my wit as a pitchfork/ And drive the brute off?”
The post-second world war generation took up their pitchforks with gusto and escaped work as early as they could. Many retired in their fifties, aided by redundancy packages from employers who feared that older workers could not keep up the pace.
Now we see a reversal. Average retirement ages are rising throughout the developed world as individuals with inadequate pension savings face longer lifespans, employers confront a shortage of younger workers and governments struggle to fund services for ageing populations.
Newly released data shows the UK’s labour market created 473,000 jobs in the year to January despite Brexit uncertainty, the fastest annual growth for two-and-a-half years. Those aged 50-plus accounted for more than two-thirds, as the number of retired people reached a 25-year low.
Around the world, the average effective age of retirement has been rising for a couple of decades. The UK rate reached 65 for men (up from 61.7 in 1998) and 63.9 for women in 2017, above France and Germany but below the US and Japan, according to the OECD, the club of developed nations. In the US, older workers are sometimes referred to as “perennials”, as influential in their way as millennials.
People currently in their 20s are likely to be working into their late 70s and even 80s, say Lynda Gratton and Andrew Scott, authors of The 100-Year Life. In South Korea, the average effective retirement age for women is already above 73.
Governments are raising the age at which people can receive a state-funded pension. In the UK, the trend has been fuelled by the decline in defined-benefit company pension schemes and by equalisation of the state pension age resulting in fewer women retiring between 60 and 65.
Many welcome the change as a way to keep active and use their skills, though they may also be making the best of necessity. Older people have fuelled UK growth in self-employment. Even the number of chief executives of FTSE 100 companies over 60 has doubled in the past 20 years.
One might think the interests of people, employers and governments were aligned. Yet there are doubts about whether change is happening fast enough.
Insurer Aviva warns that UK businesses could face a shortage of up to 3m workers in the coming decade. Japan’s workforce is forecast to shrink by 22 per cent by 2040 without urgent action to increase the number of working women and older workers.
In Britain, almost 1m people aged 50–64 who are not in employment say they would like to work. Older workers face discrimination in recruitment and progression: across the OECD, only Turkey and Slovenia have lower levels of on-the-job training for older workers. They face higher levels of long-term unemployment, low pay and gender pay differentials.
The charity Centre for Ageing Better urges employers to adopt “age-friendly” practices such as ending age bias in recruitment, improving provision of flexible working, continuing training and progression for workers of all ages, and supporting carers and those with health conditions.
The British government has abolished mandatory retirement ages and widened the statutory right to request flexible working. There is more that can be done, particularly on enforcement, but real progress will happen only when more employers see it as in their interest.
There are examples of good practice across the world. CVS, the US pharmacy chain, allows staff to transfer temporarily to stores in warmer states during winter months, mirroring older customers’ behaviour. Carmakers such as BMW and Porsche are redesigning factories ergonomically to suit older workers.
In the UK, Aviva is pioneering the “midlife MoT”, a review of career, wellbeing and finances for over-45s. Centrica, owner of British Gas, is among companies offering paid leave and flexible working to carers so it can retain their skills.
Many employers have negative stereotypes, however, believing wrongly that older workers are less productive. They miss their skills and experience only when it is too late. According to the Milken Institute’s Center for the Future of Aging and the Stanford Center on Longevity, older employees take fewer sick days, are more adept at resolving conflicts, have a strong work ethic and are loyal.
Economics aside, people need not just longer working lives but better-quality, satisfying work. That is not easy when many are on insecure contracts or in what anthropologist David Graeber calls “bullshit jobs”. It is vital, though, if people are not to suffer Larkin’s desultory resignation in “Toads Revisited” (1962): “Give me your arm, old toad;/ Help me down Cemetery Road.”
The writer, formerly the FT’s business and employment editor, insists he is only semi-retired
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