UK employers rethink retention strategies to avoid ‘retirement cliff’

Employers should rethink how they recruit and retain experienced workers as demographic change and longer working lives reshape the labour market. In an Opinion piece for People Management, Annie Coleman, founder of Age Rebels and global ambassador at Stanford University’s Center on Longevity, argues that the fundamental problem with how most organisations consider age is that they are still operating on the assumption that a career lasts 40 years, people wind down in their late 50s and retirement at 66 represents a tidy conclusion. She says it represents a ‘retirement cliff’ which risks the business losing valuable skills, experience, and institutional knowledge when experienced workers leave. We’ll hear from one of our lawyers who is helping clients with this very issue.

The article cites the data to back her argument. ONS figures show the employment rate for people aged 50–64 has not recovered to its 2019 peak of 72.6% and there are currently 3.6 million economically inactive people aged 50–64. The Centre for Better Ageing calculates that raising the employment rate for this group to 75% by 2030 would generate at least £9bn a year for the UK economy. Coleman says: “There is a commercial case that boards cannot afford to ignore. The over-50s control the majority of UK household wealth, and the European Commission estimates the European ‘silver economy’ at approximately €5.7trn. If your leadership, hiring panels and product teams do not include people who understand mature consumers from the inside, they are designing for a market they cannot see.” She says employers need to challenge age stereotypes, invest in the development of older workers, and offer the flexibility needed to support longer careers. 

Let’s get a view on this. Trish Embley is Head of Client Training at Pinsent Masons and earlier she joined me by video link to discuss it: 

Trish Embley: “I think the main problem, really, has been the exodus, the voluntary exodus, of the over-50s since the pandemic because we're talking about a group where I think it's about 65% now who are mortgage-free, debt-free. After the pandemic they saw they could have a different life, and maybe a better quality of life, and they voluntarily left, as well as those who may have been forced to leave through some form of discrimination and this has made the labour market tighter, more competitive, and had that knock on effect of creating that competition that leads to inflation in terms of demands on salaries.”

Joe Glavina: “The latest figures from the employment tribunals shows a noticeable rise in the number of age discrimination claims being brought by older workers and yet most firms’ D&I strategies we come across don’t focus much on this group. The two must be connected.”

Trish Embley: “Yes, I think that's absolutely right. Quite understandably the focus of D&I strategies more recently has been on gender, race and ethnicity, and disability but there has been in the last recorded figures a 74% increase in age discrimination claims and this is mainly because, as one study found, and they refer to this as age discrimination being the last socially acceptable form of discrimination and, again, it's one of the reasons why people of this age group report feeling undervalued, they feel that there are barriers to their progression and development, and those that maybe would like to be back in the workplace fear some form of age discrimination.”

Joe Glavina: “So what are the key action steps, Trish? What advice are you getting to clients about how to address this problem?”

Trish Embley: “Well, the advice that we're giving is that whether you want to attract - and the government themselves are really focusing on how we can get people of this age group back into the workplace because, of course, if we can, that's a whole load of tax being paid to the Treasury. So, we're advising there are three things employers can do to either get all the wealth of knowledge and skills of this age group back into the workplace, or to keep them. The first would be tackling the discrimination that I've mentioned. Studies have been done that show hiring managers would not look at the over-50s, they make stereotypical assumptions and would be disinclined to engage them or, even if they would engage them, they wouldn't want to invest in training and developing them. So, I think there's something to be done there on unconscious bias training, anti-discrimination training for hiring managers. The second thing is about healthy ageing at work. Now, without making stereotypical assumptions, health conditions do increase as people get older. We know that around one in four women are leaving work because of the symptoms of the menopause and what studies also show is this is the group that would be disinclined to ask for any sort of flexibility. So, it's something that we're saying to employers think about, acknowledge that there may well be health issues, and make sure that you're making accommodations in terms of adjusting, maybe, job roles, or hours of work, or place of work, so that people don't leave you because of health conditions. That brings us on to the third key action which is flexible working. So, this is the generation who, perhaps, might, without wanting to make any assumptions, but might want to take a step back as they transition into these sort of twilight years of their career into a role that maybe isn't so demanding, or has a different focus which means they would get more value out of it, so not so focused on necessarily money, but a job that they feel is worthwhile, like mentoring younger workers, and thinking about where they work. So again, this tends to be the generation that has had enough of the commuting, and the long hours, and so may want to move into a role where all of that can be accommodated.”

So the message is clear. Employers that recognise the value of experienced workers and create the conditions for them to stay are likely to be better placed to retain valuable skills and knowledge. If you would like help with that then please do contact Trish – her details are there on the screen for you.

- Link to People Management article: ‘Why employers must stop disregarding older workers’