The great unretirement: how businesses are bringing back older workers
The high number of people defined as economically inactive – those who are choosing not to work – is creating a headache for businesses and the government.
The number of working-age adults that have left the labour market has risen by 830,000 since the start of the pandemic, according to the Resolution Foundation’s Post-pandemic participation report. This is seen as a major contributor to the current talent shortage and the UK’s economic stagnation.
There are many reasons for this increase, but one of the largest cohorts in this economically inactive group is the over-50s, who make up 76% of the 830,000 who have left work.
One business that has felt the effects of this change first hand is the insurance firm Axa, which has seen a 30% decline in workers aged over 50 in its UK business over the past two years. “Covid has had quite a big impact, people rethought their lives, explored new careers and sought out greater flexibility,” says chief operating officer Emma Harvey.
Recruiting and retaining this older generation of workers is now a key part of the company’s people strategy. “We’ve got both skill shortages and candidate shortages, and attracting talent is extremely difficult at the moment,” Harvey adds. “The over-50s represent a big talent pool that we’re able to tap into, so it’s a massive opportunity.”
Bringing talent back
There are encouraging signs for employers. The Office for National Statistics reports that there was a net flow of 48,000 people moving out of economic inactivity and into employment between the three months to the end of September and the last three months of 2023. A large proportion of this figure can be attributed to those aged 50 to 64 – something that Helen Morrissey, head of pension analysis at Hargreaves Lansdown, describes as the ‘great unretirement’.
Who counts as being economically inactive?
This term refers to the group of people who are of working age (16 to 64) but who are not in work and have not been seeking employment within the last four weeks.
This is different from the unemployed, who are actively looking for work and are considered available to start working within two weeks.
Some of the reasons people may be economically inactive are if they are a student, being retired or if they are too ill to work.
“The rising cost-of-living will be playing a part as people are realising their pensions may not go as far as they had expected. However, we also know some of these people stopped work because of long-term sickness, so better health may have encouraged them to reconsider a return to work,” she says.
Despite the shifting tides, many organisations are lacking a “well thought out strategy” for attracting older talent, according to Claire McCartney, senior policy adviser at the Chartered Institute for Professional Development.
She believes there is still a lot of age discrimination in the recruitment process and is encouraging organisations to review the language they use in job adverts and their, often young, brand image, which “can potentially deter older workers from applying for positions”.
“Older workers have a great deal to offer in terms of skills and experience,” McCartney adds. “Employers are missing a trick if they’re not making their recruitment processes age-inclusive.”
Businesses see mixed results in reaching older workers
One of the initial challenges Axa faced was knowing where to find this older demographic. “The places we’ve always gone to look for talent, like LinkedIn and Indeed, aren’t necessarily the places over-50s are looking for roles,” Harvey says. “So, we have had to [take] different routes to find them.”
This has included using other social media sites, such as Facebook, and refer-a-friend schemes to access this talent pool. “We’ve found that this generation would rather talk to somebody about what the job is like before they make a decision, so we need to find different ways to engage and have those conversations,” she explains.
The insurer is not alone in trying to reach over-50s talent. McDonald’s and EasyJet are among a number of companies to launch recruitment drives specifically targeted at this demographic.
One of McDonald’s job ads from last year featured Roland, a customer experience leader who had considered retirement before pursuing a career with the fast food chain. Its UK and Ireland chief people officer Rebecca Dodd says: “We have a long history of employing and investing in older workers and we value the knowledge and experience that they bring to our teams.”
EasyJet also claims to have had a “strong response” to its recruitment campaign and the travel company saw visits to its careers site triple in the days following its launch. “We wanted to encourage talented people, looking for a career change later in life, to bring their wealth of transferable skills and experience to the industry,” says Michael Brown, director of cabin services. “With part time as well as full time opportunities available, it also means we can offer a career with flexibility that many think this job may not have.”
But not every business has seen the same success. Halfords CEO Graham Stapleton has described the challenges the business has faced in getting “enough qualified technicians into our garages to meet demand”, specifically citing tough labour market conditions.
The company set a target of filling 1,000 technician vacancies last year, with retirees being one of the key groups it hoped to entice into its workforce. However, only one candidate aged 50+ has been hired as part of its ‘Rediscover Work’ programme – an apprenticeship scheme aimed at reskilling older workers to fill its technician vacancies. A further 11 have expressed an interest and are going through the interview process.
Uptake has been “a bit slow”, group apprenticeship relationship manager Rhoda Lee admits. But she is hopeful more applicants will have come through its recruitment portal, where candidates don’t have to disclose their age.
“It has been difficult to hire technicians in the current market, so we have been looking at all the other ways we can try and fill the positions,” she says. “We want to get that message across to people that you can come back to work in an industry you may not have considered before and use an apprenticeship to get trained in that area.”
Lee believes that the opportunity to learn new skills and earn a qualification will help with attraction but inflation is also driving people back to the workforce. “Some have said that they simply need the money, because of the cost-of-living crisis, their pension simply isn’t covering what they thought it was going to cover any more.”
Creating an inclusive environment
But businesses cannot solely rely on financial difficulties forcing people back to work. “We need to be thinking a bit more outside of the box when it comes to catering for the needs of this older generation,” Harvey says.
Axa became one of the first insurers to be accredited as menopause friendly in 2022 and also has a number of sickness, caring and dependency leave policies, which can be particularly helpful for older workers. The company has also reviewed the imagery it uses on its website to ensure it portrays a more inclusive working environment.
Speaking to Axa’s European compatriots has also helped Harvey. She explains that, as staff approach retirement at these businesses, many move into flexible consultancy-style roles to lend support on larger projects. This concept of a “subs bench” is something she is now planning to introduce in the UK.
“Older people are realising that they’ve got the energy, motivation and passion to work, but they want to do it in a way that suits their lifestyle,” she adds. If businesses are able to adapt their attraction and retention strategies to suit the needs of this older generation then more businesses may be able to benefit from their skills and experience.