The employment relations challenges of an ageing workforce

For the past year, employers have been unable to give notice of retirement to employees, and it is more than five years since age discrimination legislation was introduced in the UK.

One might expect that organisations have made significant progress in supporting, motivating and rewarding older workers during this time. After all, we know that the workforce is ageing, and that people are living and working longer. These two trends are not only resulting in an increased burden on pensions, but employers having to attract and retain older workers to ensure that they can fill vacancies and be confident of having the skills that they need.

Despite the business case for engaging and retaining older workers, in recently reviewing what we know about this area, I have failed to find evidence of many UK employers making significant progress in doing this. Most employers have taken steps to address age discrimination within their organisation in line with the 2006 legislation (and, later, the Equality Act in 2010) but they do not appear to have moved beyond this. While a number of well publicised cases have introduced special schemes for managing age diversity at work, including flexible working, rewards and career development schemes aimed at older workers, these are the exception rather than the rule.

Barriers to a proactive approach

Emma Parry

Dr Emma Parry,
principal research fellow at Cranfield School of Management.

Most organisations have adopted an “equality” or “inclusion” approach to age diversity, making sure not to discriminate on the ground of age, but not moving onto a diversity management approach in which they actually value or leverage the differences between different age groups. A review of research and discussions with employers suggests that their understanding of the legislation may actually act as a barrier to adopting more proactive approaches, as they are concerned about being accused of discrimination if they offer rewards aimed at different segments of the workforce. In addition, the recent economic downturn has led to a perception that the ageing workforce is no longer a pressing issue for employers due to rising unemployment, particularly among younger age groups. In fact, this demographic trend is a long-term issue that needs to be addressed now.

More worrying is the suggestion that stereotypical attitudes towards older (as well as younger) workers appear to prevail regardless of legislation. My own research suggests that the legislation has made little difference to age-related attitudes at work. A number of high profile tribunal cases have showed that attitudes towards age are deeply embedded and affect managerial decisions. Simply changing policies and practices is not sufficient to address age discrimination or to ensure that older workers receive the support that they need. Older workers in some organisations that have introduced age management policies and practices still see their organisation as “young” or perceive that they have fewer opportunities and less support than younger colleagues. The creation of an organisation in which workers of all ages feel valued, rewarded and supported requires more than the introduction of age management practices.

Supportive culture

The support of line managers and the existence of an open and supportive organisational culture have been shown to be the crucial factors in motivating older workers and allowing them to have rewarding careers up to, and past, normal retirement age.

The message to employers is clear. Employers need to act soon in order to both ensure that they have the skills that they need for competitive advantage and also to make the most of the older individuals in their workforce who are already staying longer and have a lot to offer the organisation.

Employers need to move away from a focus on equality and eradicating discrimination (although these are obviously still important), to creating policies, practices and a wider organisational climate that recognises that different workers (including those in different age groups) might be motivated by different things.

Research has suggested that flexibility is key when engaging older workers, both in terms of the provision of flexible working practices, but also flexibility in job content and roles and in addressing changes in an individual’s capacity to perform a role. Flexibility in the delivery and content of training, as well as encouraging older workers to undertake continued development, is also important.

In addition, line managers and other employers should be encouraged to address stereotypical attitudes towards age in organisational culture through educational programmes and by pairing older and younger workers together at work. It is time to move away from stagnation in managing an age-diverse workforce and take proactive steps to leverage the many advantages that age diversity can provide to organisations.

Dr Emma Parry, principal research fellow at Cranfield School of Management, co-authored the Acas paper “The Employment Relations Challenges of an Ageing Workforce.”

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