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New research has found that older workers in Britain are still deprived of formal performance appraisals and discriminated against when it comes to training.
This may have caused low morale as well as restricted their ability to contribute in innovative ways. It has also had a knock on effect on firms’ labour productivity.
The study is based on European Company Survey (2013) which included approximately 1500 companies each from Britain, Germany and France between 2011 and 2012. Dr Wen Wang of the University of Wolverhampton found that workplaces with just a 1% increase in workers over 50 years old were 29% less likely to see an increase in productivity since 2010 in the UK.
But this is not the case in Germany or France; though there are high numbers of older workers in Germany.
Remarkably workplaces with a high proportion of older workers are associated with lower coverage of formal performance appraisals and training. This reflects a general stereotype towards older workers in Britain, that performance and motivation decreases from 50 onwards.
Demotivation among older workers
Older workers are demotivated as well as having a lack of skills to innovate.
The data showed that workplaces with high proportion of older workers are significantly less likely to say they have developed new ways of marketing, new processes, products or service, in the last two years.
These are the key elements to a labour productivity increase.
Formal performance appraisals demonstrate the “serious business” of older workers.
Thus employers have missed opportunities to identify and to develop older workers.
Although older workers make up a higher proportion of the workforce in German workplaces than in Britain, (for example, 57% of German companies in the data have 20% or more employees over 50, compared with only 40% in Britain and France), there is no noticeable difference in terms of new product/service, new process or new way of marketing among these three countries; this indicates their older workforce did not compromise organizational innovation in Germany.
'Economically vital'
Older workers are economically vital in Britain. Research shows that in 2015 there were 9.4 million people in employment over the age of 50 in the UK, equivalent to over 30% of the workforce.
In the coming decades, most of these people will leave work permanently. This will create a huge shortage of labour.
Meanwhile, according to ONS figures, the total fertility rate has been less than 2% since the 1970s. Moreover, given the increased restriction on migrants, the shortage of labour will mostly hang on the heads of older workers.
As the world population ages, so does the corresponding workforce. In 2015, 55 million people were aged 65 and over, reaching 8.5% of the total population (US Census Bureau, 2015).
Older workers are economically vital in Britain.
Of the world’s 25 ‘oldest’ countries in 2015, 22 are in Europe. Even though the percentage of population aged over 65 in the UK is 17.7%, lower than in Germany 21.5%, older workers have a higher participation rate of 10.3% in the former than only 6.1% in the latter (OECD Stat, 2016).
Economic pressures and social connection
Old workers prefer to stay economically active driven by economic pressure and maintaining social connections.
With the relative reduction of pension provision, the removal of the default retirement age in the UK in 2011, and increased general health and life expectancy, the high presence of older workers will be one of the new features at the workplace.
Employers are expected to respond to this demographic shift in order to sustain their competitiveness.
First and foremost, HR managers have to change their mindset when it comes to older workers.
Older workers are perceived to have lower skills and inadequate, outdated qualifications. This has to be resolved by both employees and employers, and the latter have an important role to play if they want to retain older workers.
HR must adapt their mindset
First and foremost, HR managers have to change their mindset when it comes to older workers.
Older workers are now an important part of the workforce and will be more so in the next few decades.
The over 50s make up over 36% of the workforce in education, health and social work, and real estate activity (CIPD, 2015). In the short to medium-term, their expertise and skills cannot simply be replaced.
Second, age management policies are needed to recruit and to retain older workers, who have long and healthy years of service ahead. Employers need to set a long-term vision to work with older workers and essentially pass this message on to them.
Older workers as a "serious business"
At the practical level, formal performance appraisals demonstrate the “serious business” of older workers for the organisation concerned.
Age management policies are needed to recruit and to retain older workers.
It indicates a long-term rather than short-term working relationship between the employer and employees, which can in turn motivate older workers to stay longer with the company.
Workplace adaptations, such as new health and safety measure geared towards older workers, can ensure performance will not be compromised by reduced agility. Bigger computer screens and rest area are common indicators of commitment towards older workforce.
A meaningful appraisal is an important way to identify the need for further development. Last but not least, new forms of training will be required.
Older workers may not be interested in formal qualifications for promotion, but are willing to brush up technology skills or a develop a new skill set in order to take on new roles. Such training is generally under developed.
HR managers may consider building it up and running training in-house, or putting such demand forward for other social partners, such as university, training agents to respond to.
