Sent: 02-09-2008 10:58:01
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Employing Older Workers - Part 2
Last time I pointed out the growing problems with trying to solve worker shortage by increasing immigration. I also discussed the need for employers to actively find ways to encourage older people to stay in the workforce and will expand upon that notion in this article:
A 2007 study by Aon Consulting found that up to 75% of British workers expected to work past retirement age. This was primarily based upon perceived financial need.
However, whilst this may seem like good news in terms of solving the skills shortage, Jon Beaumont at Aon Consulting offered a mixed assessment. On the plus side, he said that customers in service industries often preferred to deal with older employees. Further, the evidence suggests older staff are more loyal and reliable than younger workers (despite all the worries about failing health, older employees take less sick leave than younger ones).
However, an ageing workforce presents particular challenges. The research found that showed that 53% of people would work beyond 65 because they felt it was the only way to generate an adequate income. Only 25% stated they would continue working because they wanted to.
As Beaumont points out, motivation could become a problem as the hearts of those forced to continue working might not be in it.
But even such issues can be overcome and some companies believe they are already ahead of the curve on the age issue by their willingness to be flexible. Rentokil UK for example has turned to retired staff to meet customer demand, especially when it grows in the summer months due to problems with bees, wasps and ants.
The MD explained that customers seem to find mature staff particularly reassuring. As a result Rentokil UK now have more than a dozen retired technicians who still have the skills, attitude and experience, and who still want to work. The caveat being they want to be employed on a part time basis.
In another example of forward thinking, Nationwide building society has become a pioneer in the retention and recruitment of older workers. It raised its age for compulsory retirement from 60 to 70 in 2001, and then again to 75 in 2004.
The rationale behind these moves was explained by the head of HR who argued, "changing demographics meant there was a clear business case for change". He went on to add that customers were more satisfied with the service they got from older staff. Older workers also stayed longer and recruiting and retaining more older workers met the company's fairness and diversity policies.
But how did the employees react to the upward move in the compulsory retirement date? Don't forget, this change did not mean that people had to go on working until that age, merely that they could work up until that age but no longer. 347 of the 19,000 staff now are over 60, including a manager of 74.
Interestingly, until recently, Nationwide ran a defined benefit scheme (as was common in the UK), so it does not seem that these older employees are working just because they need the money. Rather, it appears they actually want to keep working, albeit part time.
Sadly, not many companies are going all out to attract older people. However, many, including me, would argue that it is time the majority woke up to the pending crisis. As the Sunday Times article points out, we have to consider the major talent shortfall facing us over the next 20 years. Time simply is not on our side.
I would argue that the situation is not that different in Australia. We may be the clever country on some things, but isn't it about time we got clever on this issue? We need to understand that a retirement age born in the 19th century is not really applicable to the circumstances of the 21st century?
If we are capable and willing, why should we stop at the arbitrary age of 65, let alone 60? Does it not make more sense to keep on using our knowledge and experience rather than letting it wither away?
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