Far from being an expensive liability, older workers can add value, put in
high quality performances and with the right handling, can be easy to manage.
Nic Paton reports
Unveiling the Government’s Green Paper on pension reform in December, work
and pensions secretary Andrew Smith lamented the "wealth of talent and
experience" that is lost from the workplace every year as people stop
working too early. As the UK’s population demographic changes, retaining older
staff and managing their performance effectively, is rapidly moving up the HR
The Department for Education and Employment estimates that by 2010, almost
40 per cent of the UK’s workforce will be aged 45 or more, and during the next
20 years, the number of 50 to 64-year-olds in the European Union is expected to
rise by 26 per cent.
Improvements in health provision – which mean we are staying healthier for
longer – the closing of final salary pension schemes in many organisations, and
the stock market slump taking chunks out of pension savings, are all
contributing to this trend. More people are either wanting or needing to stay
in the workplace for longer, creating new challenges for employers and HR
Historically, much of the drive to keep older employees in the workplace has
come from the US, where concerns about the ageing ‘baby boomer’ generation –
now rapidly approaching retirement age – has been the focus of many minds.
A recent study by the American Association of Retired Persons found that 80
per cent of those surveyed expect to work beyond retirement, with two-thirds
saying they enjoy work and want to stay involved.
In the US, the mandatory retirement age has largely been abolished, and
federal legislation on age discrimination has been in place since 1967. After
the Government’s Green Paper, it looks as if the UK will soon be heading the same
It proposed measures designed to give individuals more choice in how long
they worked, including ending compulsory retirement ages except where companies
could prove justification, and raising the normal pension age in the public
sector for all new recruits to 65.
It also said ministers would consult on changing Inland Revenue rules which
currently make it impossible for people to draw their occupational pension and
continue working for the same employer.
Last summer, a landmark employment tribunal ruling, the case of Rutherford v
Towncircle, gave workers over 65 the right to claim for unfair dismissal and
redundancy payments – although the Government is appealing the ruling.
And, most importantly, the European Union’s Employment Directive is due to
come into force in 2006, which will ban age discrimination in the workplace.
Yet for many older workers, employers remain stuck with the idea that once
you hit 65 it is time for the carriage clock. And getting a new job once past
50 can be difficult.
A study by FiftyOn, a website for employers wanting to recruit older
workers, found 44 per cent of its members had experienced ageism, and 65 per
cent of those had been forced to leave as a result.
And a Mori poll published in December found that age is still the number one
form of discrimination in the workplace.
In the run-up to the 2006 legislation, HR needs to be the catalyst in the
workforce to show that managing the performance of older workers needn’t be any
different to managing the performance of any other employee, argues Mike
Emmott, employee relations adviser at the Chartered Institute of Personnel and
"HR people should be going through the whole employment package to make
sure that none of its elements embodies some form of discrimination on the
grounds of age," he suggests.
This should include looking at things such as pension provision, recruitment
and selection policies and incremental pay systems, that could perhaps be seen
as discriminating in favour of older staff. Employers should also be working to
clean up their assessment and appraisal systems and consider the assumptions
they make about people and how they work, adds Dianah Worman, adviser with the
The problem with any debate about older staff is the stereotyping and
misconceptions ingrained into so many people’s attitudes, argues FiftyOn’s
chief executive John Gordon Saker.
They can be perceived as having a "you cannot tell me how to do my
job" attitude, and younger workers – particularly those managing older
staff – fear their experience.
For the same reason, they can be overlooked when it comes to training and
development, as many managers assume it is not worth investing in staff who may
only have a short shelf life ahead of them.
More common beliefs are that older workers need to take more time off sick,
and may be more expensive to employ due to their extra years of service, as
well as being more costly when it comes to paying their pension. There can also
be concerns that employer liability insurance – where premiums are already
soaring because of an increasingly litigious workforce – could be more heavily
weighted by having an older workforce.
The argument here is that older employees, who may be more physically frail,
could be more likely to suffer injuries or accidents in the workplace, thereby
making employers more liable to claims.
But these are all misconceptions that simply do not stand up to scrutiny,
argues Mike Cutt, HR manager with B&Q – perhaps the organisation in the UK
most associated with employing older workers and winner of the Department of
Work and Pensions’ Age Positive at Work category at the Personnel Today Awards
"Our more mature workers are more relaxed, and have higher customer
service skills, a more natural way of welcoming customers and a lower rate of
absence. They are a delight to manage," says Cutt.
Most of the group’s managers are in their late 20s to early 30s, but there
have been no age-related problems between managers and employees. Managing
older workers is less about having specific protocols or processes in place and
more about inducting new recruits into a culture of tolerance, Cutt says.
Screenings, interviews and assessment procedures, should be no different
than those for other workers, and older staff should be offered the same
compensation and benefits, Cutt says.
Similarly, when organisations work to break down stereotypes – primarily
through HR – the business benefits clearly outweigh any extra administrative
burden, argues HR director of the National Maritime Museum Andy Bodle.
Last July, the museum scrapped mandatory retirement for its 460 staff, about
five per cent of which are aged 65 to 69 and nine per cent aged 60 to 64.
"If any manager, whatever their age, gives people the dignity and
respect they deserve, they will not have a problem," says Bodle.
The health of older staff is one area that does need to be monitored when it
comes to performance management.
Physical strength declines with age from a peak between 20 and 30 years,
mental capacity is reduced limiting their ability to process information and
eyesight may not be as good. As a result some older workers might find it
harder to learn new skills and technologies.
However, on the plus side, older people will probably have more experience
of life and the workplace than their younger counterparts, and may have
developed better coping mechanisms. But good health screening, occupational
health and health promotion, are all vital.
At Marks & Spencer, for instance, all 65-year-old employees are given a
health assessment, says Mark Watson, policy employment adviser, and areas such
as manual handling are looked at very closely. Since scrapping mandatory
retirement in 2001, the number of staff over 65 has risen by 600 per cent.
"One of the biggest issues people expect is the performance management
of individuals when they get older, but we have never had any problems,"
"We do make allowances in terms of physical exertion," agrees
B&Q’s Cutt. "The only time we need to be careful is if there severe
physical exertion or lifting."
But generally speaking, older workers are good value for money and the high
performance of older staff can be a performance issue in itself when dealing
with managers, concedes the CIPD’s Emmott. "The more you bang on about how
good they are, the more you exaggerate their worries. But how do you train
someone not to feel threatened?"
Ultimately, good performance management of older employees is all about
sensitivity from HR, rather than protocols and action plans, he suggests. It
involves being sensitive to the health and financial needs of the older
workers, but also being sensitive to the fears and prejudices of other
"Research says the problems are in the mind. You should treat your
older workers as you treat anyone else," he says.
Fifteen ‘gold star’ employers with positive policies on age
Marks & Spencer
Dept for Work & Pensions
HM Land Registry
Kent County Council
Source: Employers’ Forum on Age
Case study: HBOS
Last October, HBOS – the bank formed
through the merger of the Halifax and the Bank of Scotland – introduced a
programme for people who wanted to work beyond normal retirement age.
The previous retirement ages for the two banks had been 60
years at the Bank of Scotland and 62 for Halifax, but under the new policy,
employees can now request to work up to a maximum of 70 years old.
"About half our customer base is over the age of 50, so
there are positive business benefits for us in being age positive," says
Tyrone Jones, HBOS diversity manager.
Even before the introduction of the new programme, the
proportion of older workers was rising. In the past year, the Halifax has seen
its percentage of workers aged over 50 rise from 9 per cent to 10.6 per cent.
The Bank of Scotland’s proportion is currently 11.7 per cent, although
comparable figures for the previous year were not available.
Nevertheless, the number of staff aged more than 60 is still in
the "few hundreds" out of a total of 60,000, admits Jones.
At the launch of the new programme, guidelines clarifying the
new policy were prepared for HR teams across the two businesses.
When it comes to managing performance, older staff are treated
no differently to other employees and are subject to exactly the same
performance appraisal systems, stresses Jones.
"There is nothing over and above what we do for all our
colleagues. Everything is done on an individual basis," he says.
Health checks may be carried out and workstations or job
descriptions amended, but no more so than with younger members of staff, adds
And when it comes to dealing with managers, it is a question of
appraising where things are going wrong, addressing and challenging any
prejudices and providing appropriate support and training, he says.
Doing away with the mandatory retirement age has made managing
older staff easier, argues Jones. "Before, you might get managers taking
the soft option and not addressing issues because the person was close to
retirement age. Now, you have to be mindful that everyone has to be managed in
the same way."