From 6 April, UK businesses can no longer give notice to employees of their retirement under a default retirement age (DRA). Whilst Employment Minster Ed Davey hailed this reform as ‘great news for older people, businesses and the economy’, not everyone agrees. Several business leaders and lobby groups have voiced concerns that businesses may be saddled with an ageing and incompetent workforce, incapable of performing their jobs, but unwilling to leave the workforce. The CBI stated that companies will face “huge uncertainty and greater risk of tribunal claims if the government does not tackle the unintended consequences of the decision”. Others argue that if companies have expensive older workers on their payroll, it will harm the job prospects of younger workers which will exacerbate the current youth unemployment problems.
Whilst some of the concerns may be valid, it overlooks the fact that older workers can deliver significant benefits to companies, not least in terms of the knowledge, experience and ideas they bring. Let’s not forget too, in engineering and manufacturing where there is a shortage of talent, one of the big concerns of business leaders is the impact of baby boomer generation retiring. Companies in these sectors are desperate to retain the knowledge of these ‘older’ workers and ensure it is passed on to successors to avoid a ‘brain drain’.
Today, there are around 850,000 workers in the UK who are over 65 years old and there has been no evidence that their performance has had any negative effect on company performance. In fact, it has been demonstrated by companies such as B&Q who employ many older workers that they can have a very positive impact on a company’s performance and culture, particularly where older workers mentor and train new recruits. I would argue also that age is irrespective in a business if the right processes are established to ensure that employees are developed in the right way and their skills and talent is used effectively.
However, there are some barriers that businesses need to overcome in terms of how they manage older workers. New research out this month from the Chartered Institute of Personnel and Development showed that older workers are rather worryingly at the bottom of the priority list for companies when it comes to training and performance management.
The report, ’Employee Outlook: Focus on an Ageing Workforce’ which surveyed 2,000 employees found less than half of workers (46%) aged 65 and above claim to have had a formal performance appraisal either once a year or more frequently, compared to 65% of all employees.
It also found that 44% of employees aged 65 and above have not had a formal performance appraisal in the last two years or never, compared to a survey average of 27%. Older workers are also much less likely than younger workers to have received training, with 51% of those aged over 65 saying they had received no training in the last three years or never, compared to 32% across all age groups.
These statistics are worrying. UK companies are neglecting the development of their older workers in the mistaken belief that they don’t need to invest in their employees who are near the end of their careers. However, with the law changing in October, this situation needs to be addressed and there needs to be a mindset change in certain companies.
Managers need to ensure that they truly understand the training needs of each individual at all levels so they can deliver targeted training that will have a genuine impact on performance.The only way that companies can gain this insight is through the delivery of regular employee assessments that test the skills, knowledge and performance of employees.Using assessments, employees can also be benchmarked against performance criteria, enabling managers to understand where skills gaps lie in the organisation and the training interventions that are needed for each individual that will improve their performance and productivity. It will also ensure they maintain and improve the skills of all workers, whatever their age or stage in their careers.
From October, when employers will no longer be able to require employees to retire at a certain age, they will need to ensure that they give the same focus and attention to the training and development of older workers. They need to ensure they have the right performance management systems and practices in place that will equally look all their workers whatever their age. By using assessments, companies can gain insight immediately into the development needs of each individual, and this knowledge can help managers make the best decisions about getting the most out of their staff no matter how old they are.
About the Author
Mary J Clarke has served as Chief Executive of Cognisco since January 2004. Under her leadership the company has achieved sustained profitability and implemented a new operating model, developed a more customer and market driven culture and expanded the role and reach of Cognisco.