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Younger employees – especially Generation Y – tend to dominate the headlines when it comes to people and talent management. But what about the older generation? Can employers afford to write them off? The evidence suggests strongly that businesses that ignore older workers are losing out.

The over 50s account for 27% of the UK’s workforce and by 2020, they will account for a third. The abolition of the default retirement age and changes to the state pension make it much more likely that people will remain in work longer – but many will actively choose to do so. As our life expectancy increases, retiring at 65 or younger when many of us are still fit, healthy and enthusiastic already looks like a waste of valuable resources.

For all the talk about the need to attract and retain the younger generation of workers, it is clear that if businesses want to maximise their chance of success in the future they will have to appeal to and take full advantage of the best employees from every generation – and ignore older workers at their peril.


The legal position
The national default retirement age of 65 has been phased out and most people can now work for as long as they want to. Most businesses do not set a compulsory retirement age for employees, but it is possible to set one if the employer can clearly justify it. If an employee feels they are being discriminated against because of their age they can make a claim against their employer through the courts or employment tribunal.


It’s a numbers game

On the most basic level, simple demographics are the strongest possible argument for employing a multi-generational workforce. While in many emerging economies the working population is becoming younger, the opposite is the case in the UK.

The UK Commission for Employment and Skills estimates that 13.5 million jobs will be created in this country over the coming decade, but that only seven million young people will be available to fill them. More importantly, leadership and management skills will be in short supply – exactly the sort of experience that comes with age.

Older workers are the biggest untapped source of labour in the UK, and their numbers are growing. Immigration is unlikely to fill the skills gap – but the growing army of older, experienced workers just might. And they are willing and able; in 2010 the CIPD found that half of workers over the age of 55 want to work beyond the state pension age.

Even so, older workers they can often be overlooked, either because their skills are seen as out of date or because it’s assumed that they want an easy, stress-free life.

There’s a lot to gain

In a recent study into the benefits of a multi-generational workforce, the UK Government asked a wide range of employers what they gained from employing older workers. Participants named a wide range of benefits, including:

  • The broader range of skills and experience among older workers
  • More opportunities for mentoring new recruits
  • More efficient transfer of skills across the workforce
  • Reduced staff turnover
  • Improved morale.

There was also strong evidence that a multigenerational workforce can be more productive. McDonalds, for example, which took part in the Government study, reported a 20% higher performance in its outlets where workers over the age of 60 are employed.


Case study: JD Wetherspoon

The pub company, which has more than 750 outlets in the UK, removed its retirement age in 2006. It has been able to attract older workers by offering flexible hours, and has found this approach particularly useful as many older employees are willing and able to work over the busy lunchtime period.

The company’s staff retention levels are well above industry average, and the turnover of pub managers is half the industry average – the company believes that the age diversity of its workforce is a strong contributing factor.


And plenty to lose

There is equally strong evidence that failing to target older workers can damage a business. In the same report, the Government found that businesses that did not improve their practices for employing and retaining older workers struggled with very specific problems, including the risk of legal action if older workers feel they have been discriminated against. A more subtle danger is a ‘loss of organisational memory’ – older workers take their skills and experience with them when they leave and unless clear steps are taken to mine their knowledge (such as through phased retirement or part-time working), it is lost forever to the organisation.

Will they stay or will they go?

Older workers often have the skills and experience that businesses are looking for. But they have an even more valuable trait – loyalty. The older generation is far less likely to move jobs than their younger colleagues, for whom the idea of a ‘job for life’ is incomprehensible. According to research by PwC, a quarter of the Millennial generation expect to have six employers or more during their career – when the same question was asked in 2008, just 10% agreed.

Managing mixed generations

One of the biggest challenges for companies lies in managing a workforce that spans a number of generations. There is an inherent tension between the experienced Baby Boomers as they approach retirement and the ambitious, technologically savvy younger generation who will eventually replace them.

Intergenerational tensions are inevitable but often exaggerated. PwC’s research found, for example, that 76% of Millennials enjoyed working with older senior management and 74% said they were as comfortable working with other generations as with their own.

Even so, intergenerational workplaces come with risks for employers. By far the two most significant are:

  • The risk that younger workers will move on if they feel their career path is blocked by older workers who aren’t ready to retire
  • That some older workers who cannot afford to retire will stay in place, demotivated and unproductive.

How to get the best out of your workers, young and old

Intergenerational people management takes a bit of creative thinking and an understanding that every generation – and everyone – is different and has different management needs. So here is our advice:

  • Consider introducing a flexible approach to retirement, including part-time working and phased retirement
  • Create an environment where experience and knowledge is shared and passed on.
  • Make the most of mentoring
  • Adapt training to the needs of older workers
  • Look out for unconscious bias – is the corporate language unintentionally ageist?
  • Review your recruitment criteria
  • Within your talent strategy, identify the real value add of maintaining this wisdom and experience in the work place and be creative in finding ways to solutions to doing so.

Case study: Nationwide

Nationwide, the world’s biggest building society, employs around 16,000 people in 700 branches across the country. In 2005, the company increased its retirement age to 75 for those who wanted to continue working. In 2011, 14% of its employees were over the age of 50. The company believes that recruiting and retaining employees of all ages allows them to reflect the diversity of their customers, about a quarter of whom are retired.

Nationwide introduced a number of initiatives to support and encourage older workers. Its workplace pension scheme includes an option for members to draw their pension while still working, and employees are allowed to gradually reduce their hours before their retirement date.


Need help?

Talent Management is one of Space2BE’s 6 core offerings. Often our clients don’t have the expertise (or sometimes, the ‘time’) within their business to create a workable talent strategy. If you’d like us to help you with yours don’t hesitate to get in touch and we will explain how we work alongside you and make the process as painless as possible.  You can email us at connect@space2be.co or call us on 020 7666 3070.Karen Griffin

Further reading

Attract Grow Engage: Optimising the Talents of an age-diverse workforce by Ashridge Business School and the Institute of Leadership & Management

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/142752/employing-older-workers-case-studies.pdf

PwC’s Millennials at work: http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/assets/reshaping-the-workplace.pdf

https://www.gov.uk/government/collections/age-positive