Skills productivity and the ageing workforce

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Fuller Working Lives, is a government lead partnership approach which encourages businesses to retain, retrain and recruit older workers to help boost productivity.

People in the UK are living longer, and the proportion of older workers in the labour force is increasing. As the population and the workforce continue to age, to avoid a loss of labour, employers will need to increasingly draw on the skills of older workers. Employers will need to retain valuable skills of older workers, retrain them if they want to support workers to stay in the labour market and recruit them to maintain labour supply and gain the benefits of a multi-generational workforce.

There is a significant group of people aged 50 and over who ‘voluntarily’ leave the labour market, either because they want to or have planned a financially stable retirement. There is another group of the population who leave the labour market ‘involuntarily’, typically due to health, caring or redundancy reasons; some of whom could have been supported to remain in some form of work. Financial incentives or disincentives to carry on in work also help to explain patterns of retirement decisions; the incentive to work tends to decline as individuals near State Pension age as a result of changes in incentives as well as the motivation to work.

The Government recognises that employers play a fundamental role in enabling workers to both stay in and return to work. Many employers are working innovatively to embrace the ageing workforce and the challenges and benefits that brings. The Fuller Working Lives Business Strategy Group was set up to drive change among employers and make recommendations to business on how to harness the benefits of a multi-generational workforce. Hosted by the DWP, the group attracted more than 50 members from some of the UK’s most influential companies and organisations; all of whom committed to review their own policies and practices in relation to people aged 50 and over; and to talk to other employers about the benefits and challenges of employing older workers.
They looked at how the retention, retraining and recruitment of older workers could be improved. Common themes emerged including the requirement for:

  •  A strong business case for employing older workers within each organisation and sector to show the economic need and impact.
  •  Improving line management training and awareness to understand and address the challenges being faced.
  •  An online portal providing information for both employers and individuals in relation to all issues affecting older workers; including health conditions, decisions about retirement and finances, skills and training.

Despite common misconceptions, there is no evidence that increased employment of older people is at the expense of job opportunities or wage rates of younger people. xi Increasing overall employment can further economic growth, which in turn means more job opportunities for everyone, including young people.

With an ageing population, a mixed-age workforce is increasingly likely and can be beneficial for employers. The Chartered Institute of Personnel and Development (CIPD) published a report in 2015 on managing a diverse workforce. Knowledge sharing, enhanced customer service and greater innovation were seen as the key benefits of age-diverse teams. Employees themselves identified many benefits of working with colleagues of different ages, including having different perspectives, knowledge sharing, new ideas and improved problem-solving.

You can find more details of the Fuller Working Lives project here.

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