Prior to the legislation on age discrimination that came into effect on 1 October 2006, research was undertaken, with ESF support, by the University of Cambridge.
Case work was undertaken with ten companies, and the findings, taken from interviews, focus groups and survey work, show some of the issues that need to be considered when managing older workforces. We know that with a changing demography in the UK, more older people than ever before will be working in paid employment.
We start by considering the issues faced by the employees we interviewed, and then look at the ways that they have been preparing for retirement. We note that when employees are at different points in the life cycle, they may have different expectations from the workplace, and businesses need to work harder at understanding at what retains high levels of motivation in the workforce.
These research findings do not advocate special treatment for an age group. The aim is to raise awareness that the same HR policies can work for different people in quite different circumstances: a policy on flexible working, for example, may be valued as much by a young parent with children as by an older employee who has elder-care responsibilities.
· Some issues for older workers - life in transition(age band: 45 – 65)
· Financial changes
· Health changes
· Financial preparedness for retirement
· Social preparedness for retirement
· The impact on the workplace?
· What can businesses do to maximise the contribution of all staff, including older workers
Some issues for older workers- life in transition(age band: 45 – 65)
Employers need to be aware that employees’ personal lives are going through a series of transitions as they move from age 45 to age 65.
Financial changes
For many, the period from age 50 to 65 can be a time when mortgages are paid off, and children leave home to become financially independent. The changes can leave these employees with greater disposable income, and as a result change their relationship with the workplace. The research found that many in their fifties were more reluctant do overtime, or chase promotion. Time became a more valuable commodity, and achieving work / life balance became the order to the day.
(However, no sooner had some adjusted to this new financial freedom (that resulted from a reduction in immediate financial commitments), than they needed to look more closely at the provision they had made for retirement.)
Health changes
From age 45 onwards, the management of personal health, particularly physical health, assumes a greater significance. This is especially so for those who have spent thirty years in manual or physically-demanding work.
With life expectancy increasing, there is also a shift in care responsibilities. Those in the age range 45-65 may find that the time devoted to the care of their own children decreases, but care demands overall can be increased as there is often a need to look after elderly relatives, and grandchildren.
Financial preparedness for retirement
The research discovered four types of employees with regard to financial preparedness for retirement:
· Some who very well organised
· Some who had not considered the issue
· Some who considered it a significant problem
· Some who only “live for today”
These different attitudes were spread across different socio-economic groups. We found manual workers with well-planned financial futures, and professional people who had made little financial preparation for their later years.
These various approaches to managing future finances resulted in employees developing different strategies for leaving paid employment, and subsequently different levels of engagement with the workplace. We should note that the majority of people actually leave full-time paid employment before their 65th birthday. Most of the employees in the research were expecting to leave before they were 63.
Social preparedness for retirement
The research showed three distinct approaches to retirement from a social perspective:
· Some were very well organised, including those who had bought retirement homes abroad
· Some were content that “they will fill their time”
· Some had given the issue little consideration
Some had thought about working flexibly in the years before retirement from paid employment. This was dependent on the availability of employer-provided schemes that were not punitive in terms of the impact on pension provision. The use of fractional hour’s employment prior to retirement was regarded as a positive way of making a social transition from the world of full-time paid employment to various forms of retirement.
The impact on the workplace?
The purpose of the research was not to advocate special treatment for older workers, but to understand how older workers have different motivations. The results show that employers - who evolve good policies and practices that recognise the issues that emerge in the “age of transition” - can maximise the contribution of this part of their workforce.
In the case companies, the research found that managers had “a lack of awareness of the age profile of their employees”. This meant that they did not always respond to employee needs, and provide the right motivation.
There was “a lack of understanding of why employees leave their workforce between 55 and 65”. There is a steady drift from the workplace as employees voluntarily leave the workforce before age 65 and take valuable skills and expertise with them. Businesses frequently fail to maximize the knowledge held by the older employee, and spend money on recruiting replacement staff before they need to.
We found that businesses introduce initiatives, for all employees, including older workers, and then fail to monitor the impact of these policy initiatives.
Many businesses do not have effective succession planning strategies in place. Many industrial sectors, usually with less fashionable trades, have not looked forward to the day when their current skilled workforce moves in to retirement.
A lack of succession planning by micro businesses can lead to disaster, as key managers retire and take their expertise and enthusiasm for the business with them.
What can businesses do to maximise the contribution of all staff, including older workers
Training and learning styles
Some older employees are reluctant to volunteer for training, or find ways of avoiding necessary training activities. If you are business that needs to regularly upskill your staff, make sure there are different learning opportunities available for staff to reach the same goal. In IT, for example, some can benefit from class teaching, but others need one-to-one help.
Workplace design
Production lines and office spaces often develop over time as the result of organic growth or a response to ad hoc demands. If not thought through effectively, these developments can lead to inefficiencies in business processes, and configurations of plant and equipment that are unhealthy for the workforce.
Workplace design that does not put undue stress and strain on the body is essential to maintain the health, well-being and productivity of staff. You may, as a business manager, need to stand back from the workplace, re-think the objectives for the space available and manage it differently.
Health management of the workforce
While many businesses have sickness / absence monitoring procedures in place, the best companies are promoting healthy living, providing health counselling, and encouraging the use of sports / fitness facilities. The research showed expenditure on health-related benefits, including subsidies towards fitness activities, repaid itself in increases motivation and productivity from staff. Although health support should be available for all staff, encouraging participation by employees in the “age of transition” (45-65), is important as susceptibility to physical health problems increases for this age group.
Job re-design
Job specifications may be “fit for purpose” on the day they are written, but as business changes, so do the jobs that need doing. Research showed that where staff were no longer able to meet the demands of a job role, perhaps because of the physical nature of the work, jobs could be re-designed. This could allow the employee to provide an equally effective contribution to the workplace by concentrating on some tasks, rather than others, from within his/her job description. In the research, re-deployment for employees to another department, on the grounds of poorer health, appeared often to no-one’s advantage. Where companies had built on the strengths of the individual’s workplace contribution, employee and employer had both found a successful outcome.
Maximising the contribution of employees in their later working years
Some examples of best practice in the research came from organisations that valued the skills of older workers by offering them mentoring roles, or building up their training role. Instead of letting the older staff drift towards retirement, these companies looked at ways in which their staff could proactively pass on corporate knowledge. This enhanced, often in an informal way, the status of the older worker, and had a sound business case behind it.
Flexible work options / flexible retirement
The research found that many companies – large and small – had policies on flexible working. However, both companies and employees often failed to make use of these policies. Companies often preferred employees to work standard hours, and employees were generally reluctant to work in different ways.
Employers are obliged to respond to some employee requests for more flexible working arrangements, including part-time working, as a result of different pieces of legislation that affect various groups.
The recommendation, coming from the research, to businesses, is that a more thorough appreciation of how flexible working can be developed and its advantages to employers and employees (of all age groups) should be spelt out. Transparent systems, rather than ad hoc responses to individual problems, should be the way forward.