Default retirement age ruling exposes ignorant employers and dysfunctional Government policy

Chris Roebuck speaker
By  Chris Roebuck
By Chris Roebuck

Author, speaker and advisor on leadership and employee engagement

Friday's ruling, which upheld the right of employers to force the retirement of staff when they reach retirement age, shows just how ignorant some British employers are and how dysfunctional Government policy is. At least the judge saw sense and said the whole thing was unsust ...

Friday’s ruling, which upheld the right of employers to force the retirement of staff when they reach retirement age, shows just how ignorant some British employers are and how dysfunctional Government policy is.

At least the judge saw sense and said the whole thing was unsustainable. Employers that remove more ‘expensive’ older workers and get in cheaper younger workers because they think this gives them an advantage are wrong. Even if older workers cost more, the evidence shows they often produce a greater return on investment than younger staff and deliver a more stable workforce. 

It is said that many great historical figures didn’t reach the height of their powers until well over 50. Most current world leaders are over 50. A substantial proportion of CEOs of major organisations are over 50.Why then do some organisations think those over 50 but not on the board are of little value?

Staff over 50 are often more flexible than younger ones, better with customers and can develop the skills of others, thus increasing the performance of all. Due to their experience, they often have valuable organisational knowledge and keep the organisation running well day-to-day. Many have been through difficult experiences – for example, previous economic downturns – which increase determination to succeed and give them vital skills to help their organisations survive the present difficult conditions.

Older workers are also less likely to give up on the organisation so why should some organisations give up on them?

The workforce is made up of 70% of women and 75% of men over 50. So unless organisations keep older workers longer it will cause shortages of both people and talent because there aren’t enough young workers to make up the shortfall.

By 2012 the 45-plus customer age  group will become over 40% larger than the 20 to 45 age group. They also have the most money to spend, the peak of household income occurring between 55 and 74. So older workers are the best staff to deliver customer service to the increasingly key customer group they reflect. 

Many older staff want to stay on past retirement age, and now over two thirds want to work on for as much as nine years. While in Europe this a preference, in the UK it is often driven by financial need due to lower retirement benefits. This raises issues about lack of engagement among UK older staff compared with our competitors.

Performance and talent are not age-related. There are young workers who have the right attitude to succeed but according to the research in any group of staff a larger percentage of the population of older workers have more of the attitudes and skills organisations need. So what should organisations be doing to realise the value of older workers?

  • Check your customer demographics – older workers deliver best service to older customers
  • Maximise the quality of development to older workers and encourage them to develop themselves and others
  • Minimise loss of intellectual capital by ensuring transfer from older workers before departure.
  • Balance recruitment of new workers with return of valued retirees
  • Ensure flexible working and lifelong strategy learning is in place – for example, flexible retirement options and part-time working
  • Senior leaders must model desired behaviour related to older workers

At team level make a difference quickly through getting line managers to:  

  • Review team deliverables and skills to create new opportunities for older workers to contribute and transfer knowledge via mentoring or coaching
  • Engage older workers more to perform better and do not assume they are delivering full discretionary effort
  • Consider recalling retirees, even if part-time, rather than recruiting new outside workers
  • Recognise people learn in different ways be they older or younger and finding the best way for each individual
  • Seek to become an effective manager and inspirational leader to both young and older workers

In all the above HR must play a key development, facilitation and supporting role.

Organisations spend large sums of money recruiting younger workers while spending little on leveraging better the skills and abilities of the older workers they already have. Older workers need investment as well as younger ones and their immediate ROI is often higher.   

To be successful organisations need to reflect the society they exist in. Never forget that age is an indicator of years gaining valuable experience, not a sell-by date. After all one day you will be over 50 yourself.