Economic inactivity in the over-50s took an upturn during the pandemic, reversing the downward trend of the previous 10 years.
According to the Office for National Statistics (ONS), the number of people aged 50 to 70 years who moved from economic activity to inactivity between the second and third quarters of 2021 was 87,000 higher than in the same period in 2019. That is contributing to the more than 1 million drop in the size of the workforce and why unemployment is at a low of below 4% while job vacancies are at near record levels.
Some 75% of these older workers who left employment did so of their own accord, citing varying reasons such as feeling undervalued, seeking early retirement or simply not wanting to work anymore. But there is a need for their return.
Earlier this week, John Lewis CEO Dame Sharon White linked the exodus of over-50s from the workforce to rising inflation, claiming that the competition for talent to replace them had pushed up wages.
Speaking on the BBC’s Today programme, she added: “There’s not a business in the UK that’s not finding it very difficult to recruit at the moment because there are so many more jobs and far fewer people looking for work. It’s a big issue.”
As a result, White called on the government to “really think much more about how to encourage more people back into work”.
Can over-50s plug the recruitment gap?
Figures from the ONS also reveal that two-fifths (39%) of those aged over 50 who left the workforce during the pandemic would consider returning to paid work in the future.
With the UK labour market remaining extremely tight – the number of unemployed people per vacancy is at a record low of 1.0 – there is a need to expand the workforce. Enticing back those who have left is seen as a way to bridge the gap.
Yvonne Smyth, group head of equity, diversity and inclusion at recruitment firm Hays, says: “Organisations are definitely more aware of older workers being an untapped and potentially overlooked talent pool.”
However, she advises that many businesses will need to adapt their workplace policies in order to entice the over-50s, in particular, back. “It’s very unlikely that you will be able to tempt someone who has retired back to work five days a week in an office, for example,” she says. “Employers need to be offering and advertising flexibility at the point of hire – and this includes part-time working.”
Travel and insurance firm Saga has had particular success in this area and managed to avoid the exodus of older talent from its workforce that many other businesses witnessed during the pandemic.
Its chief people officer Jane Storm attributes this to the organisation’s focus on being a “champion of age in the workplace”. To demonstrate this, Saga has held listening groups, introduced age training, and improved flexibility. It has also introduced new policies catered specifically to this group, including its grandparents leave policy, which gives staff one week of paid leave when a grandchild is born.
Storm says: “The UK is facing one of the biggest headwinds in our history, with low unemployment and a shortage of workers. Attracting and retaining this workforce is critical. There is an opportunity for all organisations to step forward and educate their colleagues on generational differences and extend their diversity and inclusion strategies to focus on age, especially where it intersects with other protected characteristics.”
How to encourage older people back to the workplace
Victoria Tomlinson is chief executive of Next-Up, an organisation that helps employees pre-retirement. She believes the over-50s are generally overlooked by businesses and agrees that offering flexibility is key.
“Employers have to take up the onus. Everyone is so focused on millennials that they’ve taken their eye off the ball with what’s happening with the older generation,” she says. “What they need to do is make work flexible, to give people purpose and to invest in their skills in exactly the same way businesses do when people start their careers.”
With the cost-of-living crisis weighing heavily on people’s minds, many retirees could be persuaded back into employment in order to pick up additional income. But it is not the only perk the over-50s are looking for from an employer.
A survey byrecruitment company Robert Walters shows that flexible hours, citied by 55%, training opportunities (34%) and bonus schemes (30%) are the most popular perks among this demographic.
Tomlinson says that while some former retirees are just seeking an extra bit of money, “they need purpose and to feel valued as much as anyone. A lot of people struggle with sociable loss when they retire; they like to still feel part of something”.
Ageism is also an issue preventing older generations from returning to work. The Confederation of British Industry found that only 24% of HR leaders between the ages of 25 and 30 say they felt motivated to recruit workers in the 55 to 75 age bracket.
David Bernard, founder and CEO of behavioural assessment firm AssessFirst says: “The implications of ageist hiring practices are multi-faceted, but their effects have undoubtedly been felt by many jobseekers within older age groups. Biased hiring practices are exacerbating the labour shortage and causing businesses to miss out on a huge portion of talented workers capable of really making a difference.”
He advises companies that are looking to be more inclusive to evaluate the efficacy of their recruitment practices and to focus on an individual’s skills and qualities when hiring, rather than any other factors which are irrelevant to the job.
He adds: “If an organisation has built teams predominantly comprising younger individuals, they should consider asking themselves whether they have – consciously or subconsciously – avoided hiring those within older age groups - and why.”
Although the recently retired may seem appear to plug a hole during current recruitment challenges, it is clear companies have work to do to to tempt them back. And these changes need to be for the long term, kickstarting a change in the way business sees the value of older workers.