While unemployment has dropped in recent months, a growing number of employers have voiced concerns about the future of the UK labour market. In part, this is due to the percentage of people who have reached, or are approaching, retirement age but would prefer to continue working.
According to new research by the Economist Intelligence Unit (EIU), just under one in three participating companies believe that the number of employees on their pay roll over the age of 60 will increase on a grand scale by 2020. This prediction is backed up by independent research into the Government’s extension of the state pension age to 70 or above, and clearly shows that businesses will have to carefully consider the implications of an older workforce in the coming years.
The report was commissioned by professional services firm Towers Watson, who wish to prepare their clients for the changes already beginning to take hold within the labour market.
UK head of pensions at the firm, John Ball, says; “Population change alone will only deliver a modest increase in the number of older workers by 2020, but people are likely to retire later, too.
“A combination of higher life expectancy and inadequate savings inevitably means working for longer, and higher state pension ages will give this a nudge.
“Everyone not already in their 60s has a state pension age above 65.”
Should figures from the Office for National Statistics be believed, the number of over 60s workers in the UK is set to rise by 13 per cent between 2013 and 2020. Not only will this mean that young workers may struggle to find work in firms where employers choose to keep on more experienced staff rather than training up apprentices or junior graduates, businesses will also have to address their policies on issues such as healthcare provision and sick leave to take into account the likelihood of ill health becoming a problem as their workers reach old age.
On top of that, manufacturing firms and those with employees required to participate in manual labour may find that productivity levels drop. This could prove costly for small firms in particular, and some may have to turn down additional contracts in order to ensure deadlines are met.
Mr Ball concludes; “An ageing workforce creates significant challenges for employers, especially around how to control the cost of benefit provision for this group of workers.
“Employers need to recognise that the benefits they offer need to be adapted in order to deliver to the needs of the whole workforce, regardless of age.”
Do you think that an older workforce will help businesses to grow, as the more experienced members of staff can help with the training of new recruits, or do you think the toll taken on productivity rates will discourage businesses from keeping on staff members over the age of 60?
