Economist Dr Ros Altmann has been appointed by pensions minister Steve Webb to challenge outdated perceptions about over-50s in the labour market. Speaking at a London event to launch the role, Altmann said businesses that fail to embrace older workers will lose ground.
“It is time to revolutionise retirement,” she said. “It’s not about working till you drop, it’s about opportunities. Many employers will face skills shortages if they don’t think about how to retain older workers.”
Demographic changes mean over 50s will account for more than a third of the working population. In the next ten years there will be 700,000 fewer 16-49 year olds in the labout market, but 3.7m more people between 50 and state pension age. The UK employment rate for those over 50 is currently 60% but other countries achieve rates of 70% or higher.
Webb added that the drive is “going with the grain of what many people want for themselves”. “We don’t see this as a battle between younger and older workers. There is complementarity.”
Altmann said she will engage with businesses, HR professionals and individuals to ensure a place is found for older workers to continue to be productive and contribute to the economy. She added that the end of default retirement and the extension of right to request flexible working legislation means “the door is wide open”.
However, line managers and HR professionals need to learn how to attract, retain and manage older workers. “It is a challenge to HR and may require different ways of working. Line managers may be a bit frightened about how you manage older workers but it can be done and demographically it is going to have to happen.”
In the 1950s people were working 50 years to fund 10 years of retirement, meaning five years’ work could fund one retirement year. Now that figure is less than two years of work per retirement year.
Older workers also have to change the assumption that they will end their working lives at the peak of their earning. Part-time roles and phased retirement mean financial reward will also reduce. “It does require individuals to accept that when they stop work they won’t be at their highest salary. They can downshift. There is nothing wrong with that,” said Altmann.
Baroness Greengross, chief executive of the International Longevity Centre-UK, chaired the event. She said: “We are living longer than ever before, yet far too many people fall out of the workforce early. Without more older workers active in the workplace there are significant risks for UK plc that we will not have the workforce or skills we need to be a competitive nation. Businesses must wake up to the challenge of extending working lives.”
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