On the 1 October the Default Retirement Age was abolished, signalling a major change for businesses and for employees who can now choose if and when they want to retire. But not everyone sees this move as positive. Some business lobby groups have been quite vocal in their concerns that UK businesses may be saddled with an ageing and incompetent workforce, incapable of performing their jobs, but unwilling to leave the workforce. The CBI stated that companies will face “huge uncertainty and greater risk of tribunal claims if the government does not tackle the unintended consequences of the decision”. Others have argued that if companies have expensive older workers on their payroll, the job prospects of younger workers will be affected, worsening the problems younger people are currently facing finding work.
Benefits
However, their concerns overlook the fact that older workers can deliver significant benefits to companies, not least in terms of the knowledge, experience and ideas they can deliver. Interestingly, in industries such as engineering and manufacturing, where there is a shortage of talent, one of the big concerns is the impact of the baby boomer generation retiring. Companies in these sectors are looking for ways to retain the knowledge of these ‘older’ workers and ensure it is passed on to successors to avoid what is commonly termed, a ‘brain drain’.
Currently there are around 850,000 workers in the UK who are over 65 years old and there has been no evidence that their performance has had any negative effect on company performance. In fact, it has been demonstrated by companies such as B&Q who employ many older workers that they can have a very positive impact on a company’s performance and culture, particularly where older workers mentor and train new recruits. I believe that age is immaterial in a business if the right processes are established to ensure that employees are developed in the right way and their skills and talent is used effectively.
Obstacles
However, there are some barriers that businesses need to overcome in terms of how they manage older workers. Research from the Chartered Institute of Personnel and Development showed that older workers are rather worryingly at the bottom of the priority list for companies when it comes to training and performance management. The report, ’Employee Outlook: Focus on an Ageing Workforce’ which surveyed 2,000 employees found less than half of workers (46%) aged 65 and above claim to have had a formal performance appraisal either once a year or more frequently, compared to 65% of all employees. It also found that 44% of employees aged 65 and above have not had a formal performance appraisal in the last two years or never since reaching retirement age. This result compares unfavorably with 27% average of other age groups since reaching retirement, compared to 32% across all age groups.
It seems that some companies are failing to develop older workers and don’t see the point in investing in employees who are near the end of their careers. However, with the change in law, this situation needs to be addressed and there needs to be a “mindset change” in certain companies.
Gaining insight
It goes without saying that businesses need to invest in the skills and development of employees of all ages and at all stages in their career life with a company. But this isn’t enough. Managers need to ensure that they truly understand the training, coaching and mentoring needs of each individual at all levels so they can deliver targeted interventions that will have a genuine impact on performance.
The only way that companies can gain this insight is through the delivery of regular employee assessments that test the skills, knowledge and performance of employees. If the assessments are based on situational or “on the job” assessment then the information gleaned from them will give managers a complete and accurate picture of the skills, knowledge and competencies of their workforce.
Benchmarking
Using assessments, employees can also be benchmarked against performance criteria, enabling managers to understand where skills gaps lie in the organisation and the training interventions that are needed for each individual so as to improve their performance and productivity. This knowledge will not only enable companies to deliver more targeted training and development programmes and improve the performance of individuals, but will ensure they maintain and improve the skills of all workers, whatever their age or stage in their careers.
Assessments will also highlight transferrable skills which will give managers the insight they need to make the best decisions about who to redeploy in other parts of the business. Star performers will be highlighted too so decisions about whether they need greater responsibility, a promotion or if they can be used to mentor or coach other staff to ensure their knowledge is passed on.
From October, when employers will no longer be able to require employees to retire at a certain age, they will need to ensure that they give the same focus and attention to the training and development of older workers. They need to ensure they have the right performance management systems and practices in place that will equally look at their workers whatever their age. By using assessments, companies can gain insight immediately into the development needs of each individual, and this knowledge can help managers make the best decisions about getting the most out of their staff no matter how old they are.