• International Workplace
  • 14 February 2017

Retaining older workers: government addresses the business challenge

Businesses are being encouraged to retain, retrain and recruit older workers in new evidence published by the Department for Work and Pensions, Fuller Working Lives: a partnership approach.

According to the report, which, it says, is written by businesses for businesses, an older workforce brings benefits for both employer and employee as well as the economy. Its argument for addressing the challenge to businesses of an older workforce is based on the following evidence:

  • In 2010, one in four of the working age population were aged 50 years and over; this will increase to one in three by 2022, driven by changes in demographics and State Pension age.
  • The average age of leaving the labour market has increased over the past two decades, but it is still lower than it was in 1950 and is not keeping pace with the increases in life expectancy.
  • As people approach State Pension age, the level of employment falls and economic inactivity rises as they leave the labour market ‘early’.
  • There are almost one million individuals aged 50-64 who are not in employment but state they are willing to or would like to work.
  • For most people, being in good, appropriate and paid work can be good for both your physical and mental health.

The report’s authors comment that, as the population and the workforce continue to age, to avoid a loss of labour, employers will need to increasingly draw on the skills of older workers.

“Employers will need to retain the valuable skills of older workers; retrain them if they want to support workers to stay in the labour market and recruit them to maintain labour supply and gain the benefits of a multi-generational workforce.”

However, while employers stated that they valued a mixed-age workforce and were aware in general of an ageing population, very few were taking active steps to change their policies and practices.  

The key findings were that:  

  • An ageing workforce is not yet a prominent concern for most employers.
  • Fear of contravening equal opportunities legislation acts as a brake to employers collecting information on age.
  • Line managers may not always have the skills required to ensure older workers feel comfortable discussing issues with them relating to ageing.
  • Flexible approaches to work arrangements are much more likely to be made for long-standing employees than for new entrants.
  • Employers are less likely to offer flexibility to workers in physically demanding roles (which tend to be lower paid) and this may be contributing to a tendency for lower paid workers to leave the workforce earlier.
  • Employers value older workers, but the qualities / benefits older workers are praised for can be hard to demonstrate in a job interview.

Enabling those older workers who can work, to stay in work, is critical, the report says, if we are to achieve Government’s aim of full employment, increase economic growth and ensure pension sustainability for the future. It says:

“The dependency ratio is projected to increase as there are fewer people of working age to support a larger population over State Pension age. Without action, there are likely to be significant challenges in financing state pension provision in the future. Working longer is also a significant factor in the financial, health and social wellbeing of individuals.”

The report also finds that, despite common misconceptions, there is no evidence that increased employment of older people is at the expense of job opportunities or wage rates of younger people: “Increasing overall employment can further economic growth, which in turn means more job opportunities for everyone, including young people. With an ageing population, a mixed-age workforce is increasingly likely and can be beneficial for employers.”

The Chartered Institute of Personnel and Development (CIPD) published a report in 2015 on managing a diverse workforce. Knowledge sharing, enhanced customer service and greater innovation were seen as the key benefits of age-diverse teams. Employees themselves identified many benefits of working with colleagues of different ages, including having different perspectives, knowledge sharing, new ideas and improved problem solving.

Other benefits highlighted by employers include:

  • The experience of workers over 50.
  • The reliability of older workers.
  • Workers over 50 are easier to manage than younger workers.
  • The role older workers play as mentors.
  • Older workers are more productive.


The full report can be viewed here.