Opportunities for Older EmploymentA Debate

Thursday 25th October 2012Tavis House1-6 Tavistock SquareLondonWC1H 9NA

Agenda

14:00 Welcome

Ian Rutter, Senior Manager - Engage Business Network

14:15 The Importance of Older Workers

Elaine Squires, Deputy Director Department for Work and Pensions | Redefining Retirement

14:35 McDonald’s Case Study

Michele Ryan, HR Director - McDonald’s

15:00 Your current workforce; questions, queries and challenges answered

Questions to the expert panel, chaired by Chris Ball, CEO, TAEN

16:00 Close

Welcome

Ian Rutter – Senior Manager, Engage Business Network

36.3% of those people aged between 50 and State Pension Age were out of work, as of December 2011;

Those people who lose their jobs over 50 only have a 10% chance of being re-employed.

ONS, 2012

Some employers define an “older worker” as “a woman over 35” and “a man over 42”.

“We conducted an experiment where we sent out job applications to both advertised and non-advertised positions. We applied to each position both as a younger worker and one in their 50s so that we could identify any discrimination according to age in the early stages of the recruitment process.

The researchers sent out CVs for bar work which showed four years of relevant experience but an age which was either 25 or 51, and also CVs for personal assistant jobs showing 5 years’ experience and an age of either 24 or 50. In each case, the younger worker got more responses; the younger CVs were 125 per cent more likely to get a response for bar work than the older ones.”

New Statesman

“Employers need to take age seriously because older workers will form an increasing percentage of the working population. The people we recruit will be older and the people we train and develop will be older. It’s in everyone’s interests to make the most of the skills and experience of all employees, regardless of age.”

ACAS

“Extending working lives increases the supply of labour, raising the potential levels of gross domestic product and consumption.”

DWP Working Paper

“In 2011, employers reported that almost 1.5 million employees are deemed not fully proficient as they have a skills gap.”

ONS

By taking steps to increase the employment of older workers, countries can avert economic stagnation

Increasing the number of older workers and making productivity-enhancing investments in human capital, governments and businesses could boost growth and job creation

Accenture

Retaining older workers is likely to increase overall employment growth

Participation among elderly workers is associated with greater participation among younger workers

Accenture

Organisations can sustain older workers’ productivity by adapting the workplace to their needs

BMW’ s production line composed of a majority of elderly workers increased its productivity

Accenture

ASDA

•80% of the workforce now takes advantage of flexible working.

•Workforce age diversity has increased: 21% aged over 50 and 24% under 25

•Labour turnover reduced to 21% and absence to 3.1% (compared to retail averages at the time of 28% and 4.1%).

British Gas

•The greater age diversity in the training groups improved the behaviour and maturity of the group as a whole, and older trainees often acted as life mentors for less experienced team members.

•A bigger target recruitment market has meant reduced costs and a wider diversity in the applicant pool. The company’s reputation has been enhanced as an employer of choice.

Co-op

•The skills, experiences and value that older workers can bring to the business have enormous advantages. It makes sense to harness these skills and experiences, which would otherwise be lost through imposing a default retirement age.

•There are currently 1,957 valued employees of the Group over the age of 65, who continue to make a positive contribution to our success and growth.

JD Wetherspoon

•Flexible hours help to attract staff to cover busy periods.

•Staff retention levels are well above the industry norms.

•More life experience particularly beneficial to pub manager role.

Marks & Spencer

•Has no retirement age; retains highly effective staff.•Increased loyalty of employees who value choice to work longer.•Performance management used in an identical way for workers of all ages.•Has successfully removed the retirement age and has seen the number of employees who want to work past the age of 65 increase significantly.•Marks & Spencer has one of the lowest employee turnover rates in UK retail.

www.dwp.gov.uk/docs/good-practice-managing-without-fixed-retirement-age.pdf

The importance of older workers

Elaine Squires

Deputy Director

Redefining Retirement Division

An Ageing Population

• There are currently 4 adults aged 16 to 64 for every adult over 65. This ratio is projected to drop to 3:1 by 2025 and eventually to 2:1. However, planned changes to SPA will keep the ratio of working age people to those above SPA fairly consistent at a sustainable level.

• We’re living longer and seven million people are not saving enough to provide the income they want in retirement.

• The Pensions Commission (2006) said society as a whole and individuals have to make a choice between having more poorer pensioners, paying more tax, saving more, or working longer.

• Working longer is one way for people to ensure they have an adequate income in retirement.

Average retirement age has been rising over the last decade….

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Average age of exit

Life Expectancy at 65

Males

Gap in 1984 – 16.3 yearsGap in 2010 – 21.6 years

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1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

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Women

… but is not keeping pace with life expectancy

• The proportion of people in work past State Pension Age has continued to rise – now 1.4 million

• Most other countries have also seen increase in employment post pension age.

Working longer benefits for individuals and the economy

• Enabling older people who can work to stay in work is critical to the economy and pensions sustainability – and to the financial, health and social well-being of individuals.

For the individual

• Working longer is one way for people to ensure they have an adequate income in retirement. Retiring 2 years after state pension age and continuing to save in that time can enhance private pension income by 20%

For the economy:

Everyone working a year longer would – all other things being equal:

• add 1% to GDP (about £14bn)

• Bring in about £7bn in additional taxes by 2018.

Older workers increasing in the UK labour market

• 66 per cent of 50-64 year olds are in employment compared to around 71 per cent of 16-64 year olds

• Employment rates decrease sharply from age 60

• Unemployment for 50-64 year olds rose steeply through 2008 and 2009, but rose from a low base, and unemployment still much lower than for other groups.

• Unemployment rates low as older workers tend to either retire, or move onto health related benefits.

• But once unemployed more likely to be long term unemployed – or never work.

Older people can find it harder to get back to work

Attitudes• Among older workers – that they’ve “done their bit”, or face discrimination• Among employers – older workers can’t be trained• Among others - wide perception that there are things people can’t do or

shouldn’t be doing past a certain age.

Skills and qualifications• Knowledge of the modern job market or competence based interviews• Out of date qualifications (eg employers asking for A* GCSEs)• Need to move to different industry or career

Flexibility and Health• Many older people want to work part time or in other flexible pattern• Health issues can change what people can do. (50% of incapacity benefit

caseload over 50)

Evidence challenges outdated assumptions

Older workers generally:

• remain as productive in most jobs at least up to age 70, particularly where they get the same levels of training as younger workers

• have lower levels of short term sickness.

• are better at dealing with stressful situations owing to years of experience

• are just as trainable as younger workers

• have lower levels of staff turnover

• don’t block opportunities for younger workers

• can mentor new recruits and apprentices to increase productivity.

We are working with individuals and employers

Individuals• Tailored back to work support including skills provision and job serach

support

Employers• DWP’s Age Positive Initiative provides guidance and case studies to

employers and business organisations on employing older workers and the business benefits of adopting flexible approaches to work and retirement.

• Our extensive Sector Initiative, worked with over 80 employer lead organisations across 9 of the largest sectors to help employers manage removal of the default retirement age.

• Age Positive guidance is available at www.dwp.gov.uk/agepositive

The Impact of Older Workers:How Older Workers will be pivotal in helping McDonald’s achieve its customer service vision

Michele Ryan, HR Director, McDonald’s UK

“Typical” McDonald’s employees?

Hire for Commitment

Inclusive: Good for staff and customers

Authentic British Service

Authentic British Service

Application of academic rigour

Spot the pattern …

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Customer Satisfaction: Quality

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Customer Satisfaction: Service

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Customer Satisfaction: Cleanliness

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Customer Visits

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Customer Visits Variance

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Sales

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Sales Variance

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Impact of Older Workers

Impact of Older Workers

Games Makers and Champion Crew

Survey of McDonald’s Managers

69% said older workers empathise and connect well

with customers

47% said older workers

‘go the extra mile’ to deliver

great customer service

44% believe they mentor

younger employees

The future is bright…

The future is bright…