How to recruit and retain older workers

Age discrimination is a feature of too many UK organisations. Ageism in employment takes a number of forms. It can mean older workers are overlooked for promotion, are less likely to receive training than younger members of staff or are more likely to be considered for redundancy. Often employers simply reject any job applicant over a certain age or use language in job advertisements that discourages older applicants. Even firms attempting to combat age discrimination by developing policies and procedures with that aim in mind, often have difficulty overcoming the entrenched attitudes of line managers who generally feel more comfortable managing staff younger than themselves, and of younger employees who at times regard older colleagues as hindering their own career progression.

Attitudes are much harder to change than the practices that support ageism. Nonetheless, ensuring good practice in terms of recruitment, selection, promotion, training, redundancy and retirement can make it easier to challenge prejudice. Highlighting the business benefits outlined in the previous chapter , especially with practical examples, can also help generate support for age diversity. B&Q found that doing so helped it to overcome the initial scepticism within the organisation about taking on older workers. A company spokesperson commented: "There were concerns that people aged over 50 would be more prone to illness, and so would take more sick leave than other workers. Some managers were also worried that older staff wouldn't be able to stand the pace, and would have to be 'carried' by other employees."¹ The comparative study of B&Q's Macclesfield store and five other outlets conducted by the Institute of Employment Research at Warwick University proved that these fears were unfounded (see chapter two ).

Commitment to ending age discrimination at the highest level is vital to successfully combating ageism. A top-level champion will ensure age diversity issues are taken seriously and that espoused corporate values on age become a reality in practice. Among our case study organisations, this factor was deemed crucial by most, including recruitment specialists Eden Brown, and HM Customs and Excise (see chapter five). At HM Customs and Excise, for example, the lead in managing diversity is taken from the top, with Richard Allen, HR director and board member, working closely with the department's chairman to champion age diversity issues and gain top-level commitment. Allen has commissioned research into the department's appraisal and appointments systems and selection procedures for assessing candidates for the "Civil Service Fast Stream" to identify any possible age bias (see case study 3, Chapter four ). Aside from top-level support, the human resources function must act as the driving force for change, ensuring the development of best HR practice for all age groups. Top-level commitment to age diversity is one of six principles to end age prejudice developed by the EFA (see figure 3.5 ). Awareness training across the organisation will enable the whole workforce to understand issues of age equality and help to reduce any problems.

FOCUSING ON THE SIX MAIN AREAS OF EMPLOYMENT

The government's Code of Practice on Age Diversity, launched in June 1999, focuses on the six main features of employment - recruitment, selection, promotion, training, redundancy and retirement (see figure 3.1 ).² The code recommends, among other things, avoiding the use of age limits in job advertisements, using mixed-aged interview panels, discarding age as a criterion for redundancy and rethinking current practice in terms of early retirement. The main areas of the code are:

Ensuring good practice in each of these aspects of the employment cycle lies at the heart of combating discrimination. Yet, overcoming ageism requires more than removing age limits from job ads and applying greater fairness to the selection process for redundancy. There needs to be a holistic approach to combating discrimination on the grounds of age. As Alan Walker, author of Managing an ageing workforce: a guide to good practice from the European Foundation for the Improvement of Living and Working Conditions, has explained:

"Good practice in the management of an ageing workforce consists of both specific measures to combat age barriers, and general employment or HR policies which provide an environment in which each individual is able to achieve his or her potential without being disadvantaged by their age. It is, however, possible to implement very specific initiatives, such as the abolition of age limits in recruitment advertisements, without altering the approach to age management in the organisation as a whole. Thus examples of good practice may be found in organisations that nonetheless have plenty of other age barriers. The comprehensive elimination of age barriers requires a broad management strategy."³

Good age management in the UK is hard to find and in many cases is often no more than good practice in terms of recruitment. And where wholesale anti-age discrimination practices have been established, barriers to equality remain. At HM Customs and Excise, for example, the compulsory retirement age, which for senior civil servants is 60, acts a significant barrier to achieving a fully diverse workforce. Establishing a robust and integrated set of measures that truly eradicate age discrimination requires careful planning, implementation and monitoring, and goes beyond the inclusion of age in an equal opportunities statement. There are also legal implications - such as data protection legislation with regard to age monitoring - to consider.

It's a cultural thing

Organisational culture is often described as "the way we do things around here". MR 4 defined it as: "The commonly held values, attitudes and beliefs that distinguish one group from another, and the systems and symbols that perpetuate the culture."⁴ Combating age discrimination will often require a shift in organisational culture. The lack of training opportunities for older workers and their general omission from the selection process for vacancies, for example, spreads the belief throughout the organisation that older people are of less value to the company than other age groups. In many enterprises, the absence of older workers from the workforce - largely as a result of early retirement/redundancy programmes - will create a situation in which any member of staff over the age of, say, 55 is regarded as unusual. Such ageist attitudes simply become part of the organisation's cultural norms - that is, the acceptable way of doing things.

Staff, particularly line managers, who often have an aversion to managing people older than themselves, and younger employees, who might feel older workers threaten their own development, will need to be convinced of the need to alter their attitudes to mature people. The leadership of key decision-makers will be crucial in delivering the kind of cultural shift required to overcome common assumption about older workers. As was noted earlier, senior management commitment to tackling ageism will help establish new cultural norms. Better communication, training and development on diversity issues can help to secure and reinforce a cultural shift.

STARTING POINT: AGE DIVERSITY POLICY

Establishing a written policy that commits the organisation to equality of opportunity, and selection and advancement on merit, based on objective job-related criteria regardless of age, disability, gender, sexual orientation, race or religion is an essential first step in overcoming discrimination (see EFA checklist, figure 3.2 ). In terms of good policy and practice for older workers, IES warns: "Changing attitudes and raising awareness of age-related issues within the workplace is as important as having the right HR policies in place. Having an EO (equal opportunities) statement on age does not ensure organisation-wide compliance."⁵

Nonetheless, policies designed to support age diversity, although meaningless without genuine management commitment to the aims, at least lay the ground rules of what is, and what is not, good practice, as well as providing guidance on how to implement, communicate and monitor the strategy. The establishment of policies aimed at age equality might also have a positive impact on recruitment, for example, by making the organisation more appealing as an employer to a wider audience, ensuring the firm can choose from the widest possible field of candidates.

Traditionally, a written commitment to equality of opportunity has taken the form of an equal opportunities statement, although more recently policies on managing diversity have become popular.

Managing diversity is distinct from equal opportunities in several ways.⁶ First, it focuses on maximising employee potential rather than on simply removing discrimination; second, it is seen as relevant to all employees and not just an issue for disadvantaged groups; third, it is a matter that involves managers, not just HR; finally, it does not rely entirely on positive action. Many of the barriers to the recruitment and retention of older workers are derived from stereotyped views of others. Focusing on the workforce as a whole by highlighting the strengths that different people can contribute to overall corporate performance is a better approach to achieving equality than a policy aimed only at removing obstacles for specific groups of workers.

An employee leaflet published by the Land Registry, the government agency with responsibility for administering land titles, explains: "[Managing diversity] aims to change the culture to accommodate people with different backgrounds, styles and working patterns, rather than expecting people to change to fit into our prevailing culture. Everyone is included and everyone contributes at all levels."⁷

The EFA regards the City of Bradford Metropolitan District Council's age diversity policy as a model document.⁸ This policy includes statements of commitment to the promotion of age diversity, reasons for that pledge and - to ensure that the policy achieves its objectives - a statement that the employer will:

Written equal opportunities policies are common in the UK. A CBI survey in 1998 reported that 86% of organisations had policies, with larger firms more likely than smaller businesses to have one - 96% of those employing over 5,000 employees had a policy compared with 80% of companies with fewer than 200 members of staff.⁹ The 1998 Workplace Employee Relations Survey (WERS), based on a much larger sample than the CBI's, found that 64% of workplaces had a formal written equal opportunities policy.¹⁰

Despite the popularity of formal written EO policies, age is the issue least likely to be covered, which gives an indication of the level of importance attached to combating ageism in many organisations. Equal Opportunities Review reported that just over three-quarters of the 140 respondents to its 1999 survey of EO policies included age: a lower proportion than either race or gender (each reported by 95% of participants, and both of which are protected by legislation); or disability (93%).¹¹ The omission of age from a large number of EO policies was also the finding of a study of 420 English NHS trusts.¹² Whereas 90% or more made reference to ethnicity, disability and gender, age (67%) was least likely to be covered, also coming behind both religion (81%) and sexuality (77%).

Age diversity policies should be supported by guidance so they are fully understood at every level of the business. This will ensure the roles and responsibilities that they give rise to are clear and are performed competently.

Monitoring for age

Monitoring is considered an essential requirement of equal opportunities. Guidance produced for the Civil Service recommends that departments and agencies: "Incorporate monitoring exercises of appraisal markings, recruitment, training, wastage, etc, and staff attitude surveys, to identify if there are particular age groups at an unfair disadvantage compared with others."¹³

Regular monitoring of the workforce will detect age imbalances and enable age diversity goals to be set. Monitoring recruitment and promotion decisions, and access to training, among others, will demonstrate the effectiveness of any anti-ageism measures. This final point was highlighted by an IRS survey of equality monitoring. It found that the main reason employers engage in monitoring is to check the effectiveness of EO policies and procedures -- over 93% of respondents said this was the case.¹⁴ Two-thirds said they monitor to ensure the best person is appointed to any position.

A further influence on employers' decisions to monitor equality is to ensure they meet their legal obligations on discrimination issues - reported by more than 44% of participants to the IRS survey. Although there is currently no age discrimination legislation in the UK, it will be in place by 2006 at the latest so employers will eventually have to ensure their policies and procedures do not discriminate on the grounds of age. If the legislation follows that of the law applying to race, sex and disability discrimination, there will be no financial ceiling on the damages awarded in employment tribunals. Hence, there will be a large incentive for employers to ensure adherence.

Currently, employers are less likely to monitor policies and practices for age than for other issues. Equal Opportunities Review's 1999 survey reported that monitoring the effectiveness of EO policies in areas such as recruitment, training and appraisals was lower for age than for race, gender or disability.¹¹ This picture was confirmed by the IRS survey.¹⁴ It found that 61% of respondents monitor by age, whereas almost 85% do so by gender; 80% by ethnic origin; and 68% by disability.

Monitoring is the first step in a process to identify potential problems and enable solutions to be developed. Employers will also be able to check progress against targets, or use the data to modify goals. The information gathered from monitoring should be carefully and regularly analysed to discover areas that need attention. Action plans to rectify direct or indirect discrimination can then be developed. Monitoring, for example, will show if older workers:

The IRS survey of equality monitoring reported several examples of the outcomes of companies' age monitoring.¹⁴ Prudential's group pensions division found that its workforce age was heavily skewed to under-25s, which was a concern, while Forte Hotels established that the typical age range of staff was in the 18 to 22 bracket.

Data is normally collected directly from employees. The IRS survey reported that self-classification by job applicants, who were asked to complete a monitoring form with an application, was the most common technique for equal opportunities monitoring - cited by 83% of participants.¹⁴ A further common mechanism is self-monitoring by new recruits, who typically complete a monitoring form on appointment. Almost 39% of respondents to the IRS survey used this procedure. Workforce audits, used by more than a third (35%) of survey participants, are sometimes annual exercises, but often are a one-off or used only occasionally. The Corporation of London, for example, operates a yearly workforce audit, requesting staff to provide information on racial origin, age, disability and daily care arrangements. The latest results show that 56% of the Corporation's workforce was aged 41 or over, with the remainder aged 21 to 40.

Monitoring personal information has legal implications. The Data Protection Act, which came into force in 1999, regulates how personal data relating to individuals may be obtained, held, used and processed. Anonymous monitoring data - if information is stored without a link to individual names and other details - can reduce the risk of employers breaching the provisions of the Act. A common approach to data storage is to use a computerised spreadsheet that does not include names for EO analysis.

Age profiles

Organisational age profiles, based on the information ascertained from monitoring, will provide a picture of the age mix of the workforce. Age profiling enables firms to track trends in the age of its workforce, and prepare for future demographic changes. It provides a baseline for monitoring progress and ensures that the long-term composition of the workforce contains the right balance of skill and experience.

Age profiles in many organisations, particularly in the private sector, fell in the 1980s and early-1990s as firms encouraged older members of staff to take early retirement to cut costs. However, the significant curtailment in recruitment, which was the flipside of early retirement to drive down overall staff numbers, helped to combat this trend at NatWest Bank, for example. Some 87% of NatWest UK's workforce was aged 45 or under in 1995.¹⁵ But the proportion of staff aged under 25 had fallen by 20% over the previous five years, pushing up the number of staff in the 26 to 45 age bracket by the same amount. The workforce at Marks & Spencer, the high-street retailer, is ageing. In June 2000, nearly 34% of staff were 45 or more, compared with 29% at the start of the year.¹⁴

The public sector workforce is generally older than in private industry. Local government, for instance, has an older profile than the rest of the economy, with 29% of staff aged over 50 and just 5% aged under 25.¹⁶ In the workforce as a whole, 22% of employees are over 50 and 16% are under 25. Bradford Metropolitan City Council provides an example of the typical age profile of a local authority workforce. In April 1995, the council employed 23,594 workers. Of these, more than half (52.1%) were 40 or over.¹⁷ Another example from local government is Oxford City Council. Age profiling in 1997 revealed that the council's workforce was much older than in the county as a whole, with only 13% of staff under 30 and only 1% under the age of 21.¹⁸ A similar picture emerges for other areas of the public sector. Less recruitment and early retirement has altered the age structure of the civil service over the past decade. The proportion of staff aged between 30 and 55 has increased significantly. In 1999, staff aged 30 to 55 represented 74% of workforce, compared with 52% in 1987.¹³

The figures suggest that, initially at least, demographic change will have a bigger impact on public services than on the private sector. The French public sector provides a further graphic example of the impact an ageing population will have on the workplace. Almost half the 1.9 million-strong workforce is set to retire over the next decade, with the education sector facing the biggest upheaval, losing 40%, or 190,000 teachers.¹⁹

RECRUITMENT AND SELECTION

Age discrimination is most noticeable in the recruitment process. A CIPD survey reported that one in eight UK workers had been discouraged from applying for a job in 2000 because the recruitment advertisement contained an age restriction or implied applicants needed to be a certain age.²⁰ However, the CIPD's annual recruitment survey, which in 2000 asked about age for the first time, found the majority of employers (83%) do not take age into consideration in recruitment decisions.²¹ Most firms (87%) say that they use an open recruitment process to build a diverse workforce. There are several explanations for these contrasting views. One is the content of job ads.

Job advertisements

Age discrimination in the recruitment process can be both direct and indirect. Job ads, for example, can contain both overt and hidden discrimination. Age restrictions, although less popular now than in the past, are still fairly common and overt barriers to age equality. A more discreet approach is to use language that suggests a particular age range is being sought. Equal Opportunities Review (EOR) examined age bias in more than 7,000 job advertisements published in The Sunday Times between October 1997 and March 1998, and in "free" London magazines in the week beginning 9 March 1998.²² Almost 8% of ads had numerical age limits, while 3% contained ageist words or phrases. A similar exercise in 1992-93 found that 35% of ads contained numerical age limits.

EOR's 1997-98 research also revealed that some companies which proclaim themselves as equal opportunities employers in their advertisements, and which no doubt consider that they operate an open recruitment process, often exclude candidates on the grounds of age.

For example, a discount retailer advertised for applicants "ideally mid-to-late 20s" for posts in retail management, yet in bold capital letters at the foot of the advertisement was the announcement "Aldi is an equal opportunity employer". The use of language to signal that candidates should preferably be from a particular age group is usually done in two main ways: either by using language which relates to the person, eg "articulate youngsters" or "first jobber"; or to the working environment, eg, "young, dynamic department" or "young, fast-moving entrepreneurial company". Examples of the use of this form of coded language included: Walt Disney Television International, which was looking for a human resource manager to "join a young, high-calibre management group", and Exxon Chemical, which despite a statement declaring "we are an equal opportunities employer", was seeking to recruit a "young, dynamic technical sales professional".

Practical steps

However, good practice in recruitment means more than removing age limits and coded language from job advertisements. Practical steps include:

The bottom line is that the selection process should be applied consistently to all candidates. Age should only be a criterion if it is objectively justified, although quite often this has the effect of placing an implicit age bar on some occupations. The civil service guidance document on age diversity provides the following example as an objective criterion: "able to give five years service following training." The proper way to assess candidates for employment is to evaluate the individual's performance and potential to see if they are competent to do the job. Adopting competency-based recruitment, which looks at a person's ability to do the job, rather than background or formal qualifications, is one way of overcoming age discrimination in the selection process. Potential recruits to work for the Employment Service, for example, are asked, through a combination of application form, work samples and structured interviews, to demonstrate that they have the skills appropriate for the job.¹⁷

Competency-based recruitment is seen as fairer to older applicants because they, as a group, tend to have fewer formal qualifications than younger people. One study found that older workers are more than twice as likely to have no formal qualifications as their younger counterparts.²³ Analysis by the DfEE reported that, in spring 1997, only 25% of those aged 50 to 59 and 23% of those aged 60 to 64 had higher education qualifications or two or more A-levels. This compared with 37% of 25 to 29 year-olds.²⁴

Interviewers need to guard against prejudices and stereotypical views about age, especially as line managers are increasingly responsible for recruitment decisions and they may have little understanding or awareness of equal opportunities issues. Often line managers make recruitment decisions based on age because they have a "natural bias" towards employing younger people. The Institute of Management's 1996 study of attitudes to age and employment found that 55% of managers said they had used age as a criterion in recruitment and selection.²⁵

Assumptions about an individual's abilities or fitness that are based on personal perceptions of older workers should never provide the foundation of selection decisions. Judging an individual's age on the basis of personal characteristics should also be discouraged.

Since 1993, Nationwide Building Society has operated telephone short-listing for posts, including for customer advisers and branch managers, believing that this "lowers the risk of assumptions made on appearance". The interviewer is given only basic details of each applicant. The company says this has helped to broaden the age range of new employees, with a growing number of people aged 50 or more recruited. Previously, many in this age group would have been rejected at the shortlisting stage (see figure 2.4, chapter two).

Monitoring recruitment practices and decisions is necessary to ensure that candidates of all ages are shortlisted, interviewed and appointed. The information will help to identify where barriers remain, and whether particular age groups are not being attracted to apply for vacancies. Also, recording where different age groups saw the job advertisement will enable the firm to target future advertising.

PROMOTION

Unfair perceptions about older workers all too often influence promotion and progression decisions. Many managers assume, often wrongly, that workers who have not progressed their careers sufficiently by the age of, say, 45, should be passed over in favour of younger employees who voice their "ambition" to take on more responsibility. Typically, arrangements for succession planning will overlook older workers because their long-term contribution will be limited by their age, so the return on investment will be minimal. Bias in succession planning programmes, and career progression generally, might stem from the common practice of moving individuals throughout the organisation to gain insight and experience of different parts of the business. Older workers might be reluctant to relocate continually, although younger workers with family responsibilities are increasingly unwilling to uproot.

Another form of age bias, stifling older workers' chances of furthering their careers, is the lack of training and development for older workers (see below). As a result, they are often disadvantaged in the promotion process because they have had less opportunity to update their skills.

Practical steps

Career progression should be based on merit and the ability of the individual to do a job at a higher level. Basing promotion decisions on objective performance-based criteria is a fair and consistent way of selecting staff for elevation. It reinforces the concept that effective performance will be rewarded.

An appraisal system that defines, measures and rewards the contribution of all staff, regardless of age, and is viewed by employees as fair, will help to ensure that assumptions based on age stereotypes do not inform promotion decisions. Generally, the aims of appraisal are fourfold:

An appraisal system based on the above criteria, consistently applied, will clearly identify employees who are ready for more responsibility and promotion. The regular feedback and communication that lies at the heart of an effective performance management system will enable individuals to convey to line managers their career aspirations, so there will be little confusion about whether someone wants to take on more responsibility. Personal development plans, reflecting career goals, will ensure individuals attain the necessary skills to maximise their potential and achieve their aims.

Aside from establishing an effective appraisal/performance management process, there are several other practical steps that employers can take to help reduce age bias in promotion decisions - this applies to younger employees as much as older workers. These include:

Problems and a possible answer

One aspect of promotion that is affected by the employment of older workers, especially retaining their services in management positions, is that it acts as a brake on the career aspirations of younger workers. Japan's workforce is ageing more rapidly than that of other developed nations and the government has long pursued initiatives to encourage older workers to remain in employment, such as extension to the retirement age. However, younger employees have voiced their concern with regard to the adverse effect on their careers of policies to increase employment opportunities for mature workers.²⁷

The situation in the UK has been exacerbated by a decade or so of delayering, which has produced flatter organisations with fewer managerial tiers. Although many older managers have taken early retirement and are no longer employed, the levelling off of the old hierarchical structure has limited the scope for upward progression. An earlier issue of Management Review found that almost 40% of surveyed employers with retention difficulties said the lack of promotion opportunities was a major cause of the problem.²⁸

Employers can solve the challenge of retaining older workers and of keeping younger employees happy with their career prospects by establishing mentoring systems. Mentoring is where experienced staff coach newer employees by passing on their knowledge. It makes effective use of the skills, knowledge and experience of older workers and ensures those features are not lost to the organisation when they finally leave. In terms of employing older workers, mentoring by those with a limited period of service available before retirement can be an invaluable resource, especially in succession planning arrangements. Earmarked young successors can learn from their mentors, safe in the knowledge that they will eventually move up the corporate hierarchy. Mentoring relationships demonstrate to older workers that their experience is of value, as well as fostering continuity in the organisation.

TRAINING AND DEVELOPMENT

Generally, older workers receive less training than younger employees. Labour Force Survey data shows that in spring 2000 the proportion of employees of working age receiving job-related training - defined as both on- and off-the-job training - declined with age (see figure 3.3). Men tend to fare worse than women in all age groups.²⁹ The Family and Working Lives Survey (FWLS), which questioned more than 9,000 adults between the ages of 16 and 69 during 1994-95, found that no one over the age of 59 had received a month-long employer-paid course.³⁰ Employees aged 50 to 59 working in public administration or manufacturing were most likely to have been provided with training in the 10 years before the survey. Interestingly, the FWLS also found that older workers who had fairly recently received at least a month-long period of employer-paid training were more likely to remain in work. More than 80% of 50 to 59-year-olds who had received such training in the nine years preceding the survey were still working, compared with 66% of those whose training had been at least 10 years before.

Figure 3.3: Employees of working age⁵⁸ receiving job-related training⁵⁹ by age and sex; Great Britain; spring 2000, not seasonally adjusted

"Employers give priority to training those workers they deem most valuable or promising to their organisations, most capable of learning new skills and most cost-beneficial to train. Their questions about learning ability of older workers, as well as the costs of and returns in training older workers, help explain older workers' under-representation in training programmes. Workers who fail to get training risk obsolescence, they reinforce stereotypes about older workers trainability and flexibility or adaptability. These stereotypes then serve as impediments for further training."³¹

The lack of training for older employees in the UK is surprising given the pace of technological change and speed at which skills become out of date. Part of the explanation, as Rix points out, is that many employers believe that the pay-back period to make the training of older workers worthwhile is too short. However, as chapter two highlighted, turnover among older workers is much less than among workers in younger age groups. One argument that UK employers have always used to justify their general reluctance to provide training, especially in broad skills that can be used elsewhere, is that trained staff might be "poached" by another company. Given this view, it may be more cost-effective to train someone aged 55 who is likely to give between five and 10 years service than a younger person who is more likely to take their new skills elsewhere. The DfEE highlighted this view: "Research shows that turnover among older workers tends to be lower than among younger ones. On this basis, investment in the training and development of older workers can be as worthwhile as investing in that of younger workers."³²

Training and development have moved up the corporate agenda over the past few years. The number of companies achieving and pursuing Investors in People (IiP) accreditation - figures show that in June 2000 more than 19,500 enterprises have achieved the IiP standard and a further 41,000 are committed to achieving it - confirms an increased support for training among employers, as the standard requires the following commitment: "An Investor in People is fully committed to developing its people in order to achieve its aims and objectives".³³ The standard also requires employers to commit to "ensuring equality of opportunity in the development of its people", although there is currently no reference to age. However, the Government recommends that IiP assessors should consider age alongside other areas of possible discrimination (gender, race etc) when considering whether employers are offering equitable access to training and development opportunities.²

Practical steps

The need for people to adapt rapidly to change means that all employees need to develop a habit of learning. However, a number of barriers to learning need to be broken down if older workers who have had little formal education or have been absent from learning for many years are to derive the maximum benefit from any training. Poor image and low confidence are potential individual barriers to learning. Often, older workers have lost touch with basic educational skills and require support to re-engage with the learning process. Others might be reluctant for fear of failing. Some may have had a negative previous experience of learning. Often these barriers result in unwillingness among older workers to undertake learning or re-training. People who are not regularly engaged in training will find it hardest to resume when the opportunity arises.

Employers need to recognise that individuals learn in different ways and someone who has been away from learning for a considerable length of time might need longer to adjust to the process than a younger person. A participant from the retail sector made this point in research into employers' attitudes to older workers by IES: "Age is not as relevant as the teaching methodologies used. Young people fresh out of school are still in a learning culture; older people have learned in different ways and this needs to be considered."³⁴ Trainers, therefore, will need to adapt their approaches to the learning needs and preferences of different age groups. For example, in many instances older workers will already have some awareness of what is being taught and are more likely to find the learning process a positive experience if it builds on their existing knowledge; re-training activity should always try to include the transfer of existing skills. On other occasions, older workers may initially require reassurance and greater support with some activities than people from other age groups. Many may prefer to learn on the job than in a classroom, or favour self-paced learning, such as through an open learning centre, rather than through intensive learning exercises. It is always worth remembering that the knowledge and experience that older workers possess mean that many can act as trainers themselves.

One area that older people tend to be less proficient in is basic skills, such as numeracy and literacy, and increasingly information technology. These lie at the heart of employability - that is, the situation in which employers encourage staff, and provide them with necessary support and resources, to enhance their employment prospects by developing a broad range of transferable skills - and training in them should be available if required. Developing a broader range of skills is invaluable to both the individual employee and the organisation. Employees can build a portfolio of skills, competencies and knowledge that will benefit them in the outside labour market, while the flexibility and adaptability provided by staff with a range of skills will enable them to be moved around within the organisation as and when necessary.

Employee development programmes and return-to-learn initiatives attempt to overcome barriers to learning by offering people a choice of methodologies that usually include the option of support, designed to help the individual to become reacquainted with the learning process before embarking on his or her course. For example, Peugeot's Assisted Development Programme (ADP), set up in 1991, offers participants the following help with basic skills:

Likewise, Unison's R2L strategy is specifically designed to develop confidence in their learning ability among people who have few formal qualifications or have been away from the learning process for a long time.³⁶ The public service union's programme, which it operates in partnership with employers and which usually lasts for 10 months, gives participants the opportunity to develop core skills in writing, investigation, analysis and applied numeracy.

Aside from ensuring that training is delivered in different learning styles and that the needs of all workers are addressed, other practical steps that employers can take to ensure training and development opportunities are available to all employees, regardless of age, include:

In terms of training and development, WH Smith's policy on equality and age diversity specifies the following:

"It is the responsibility of all managers to ensure there is no exclusion of particular age groups from training and development programmes, as it can be a waste of potential talent and discriminatory in the same way as it would be if a disabled person was excluded."³⁷

REDUNDANCY

Large reductions in headcount have been a feature of the corporate environment since the 1980s, with recession, restructuring and technological change all driving down the numbers of workers employed. Figures show that between 1990 and 1995 the top 12 UK companies cut their workforces by an average of 44%.³⁸ Older workers are often considered first for redundancy. Partly this is because pay structures and pension schemes mean they tend to earn more and cost employers more in benefits than their younger counterparts (see early retirement below).

Applying age criteria to the selection of people for redundancy, however, has produced undesirable outcomes in many organisations, which can have a damaging effect on the long-term success of the business. Chapter two explained that corporate memory had been adversely affected by the loss of too many experienced and knowledgeable staff. In the worst cases, experienced workers were lost to competitors. Throughout the period age largely replaced the previous favoured method of selecting candidates for redundancy, which was "last in, first out". This too, can create an imbalance in the age profile of the organisation, as it tends to disproportionately affect younger employees.

The EFA has listed the potential consequences of staff reductions, which are not always apparent at the time of the redundancies:

Practical steps

Eligibility criteria for redundancy should focus on retaining key knowledge, skills and experience. Objective criteria based on business requirements should be applied to ensure the retention of a balanced workforce. This point is emphasised in the booklet on redundancy from ACAS:

"In seeking to agree selection criteria, the most important consideration for the future viability of the company is to maintain a balanced workforce after the redundancies have been carried out. Specific skills, flexibility, adaptability and an employee's approach to work may be the most relevant considerations to the future success of the business."⁴⁰

Any formal redundancy policy should be developed with the involvement and agreement of the employees' representatives. The T&G union's guidance on age discrimination recommends that:

The redundancy selection process should be fair and consistent and it should be widely communicated to staff so that they are aware of the procedure.

Alternatives to redundancy

As the T&G's model age discrimination agreement mentions, alternatives to redundancy should always be considered where appropriate. WH Smith's equality and age diversity policy declares that: "When a redundancy situation occurs, the selection process should not use discriminatory age-related criteria. Alternatives to redundancy should be considered, such as shorter hours, part-time working, contractual arrangements, secondments and perhaps career breaks."³⁷ Options, such as part-time working, might be attractive to older workers who may want to reduce the amount of time they spend at work.

In the past, British Airways allowed employees over 50 to switch to part-time work until retirement as one option in a package of alternatives to redundancy. The pension contributions of workers choosing to move to part-time working continued to be paid, but based on part-time earnings. Pension, however, was based on full-time pay. Employees were also eligible for a transitional payment, equivalent to six months' pay - pro rata for staff with less than two years before retirement.¹⁷

RETIREMENT

Early retirement has had an enormous impact on the proportion of older people outside the labour force. A quarter of the people receiving a company pension in 1995 was under the state retirement age.⁴² Chapter one reported the Audit Commission's findings showing that 75% of council workers retiring in 1995 did so early, and at an average age of 54.⁴³ According to Audit Commission figures published in 2000, early retirement still accounted for two-thirds of all local authority retirement.⁴⁴

Employers, usually as an alternative to compulsory redundancy, have long pursued early exit from the workforce through "voluntary" retirement with enhanced pension provisions. The cost of early retirement to employers has been the loss of corporate memory discussed above and in chapter two. This is exacerbated by pension arrangements that enable staff to take early retirement. These mean that employers often have no choice as to who leaves, so they are unable to control the skills and knowledge that disappear. The removal of older people from the workforce also reinforces ageism. It gives the impression to other workers that mature members of staff have no place in the organisation, so their continued existence is viewed as unusual. Also, the productivity and performance of many individuals approaching the qualifying date for early retirement on an unreduced pension is often affected. Those looking forward to retirement begin to "wind down", while those dreading it can be less productive or their performance may suffer because they are anxious about the future.

The funding of early exits from work has often been met from the surpluses accumulated by many company pension schemes through a combination of favourable investment circumstances and the changing structure of employment and pensioner numbers.¹⁷ However, funding early retirement in this way has eroded the surplus in many pension schemes, so some companies are now having to pay extra contributions to cover the cost of premature exit. Indeed, the surpluses in the BT Pension Scheme were largely eliminated between 1989 and 1993 due to the cost of generous redundancy/early retirement programmes.⁴⁵

Where restructuring has involved a one-off hit on profits, the financial costs have generally been recovered quickly from savings on labour expenditure. The longer-term costs, such as the loss of corporate memory and increased pressure on remaining staff, are hard to quantify, and, as a result, are often not even considered when early retirement/redundancy decisions are made.

The cost to the nation has been huge in financial terms through lost output, additional benefits' expenditure and reduced tax contributions. Many early retirees have also borne a high cost. One study reported that 14% of staff in seven large companies who had taken early retirement in response to corporate restructuring considered the decision a disaster.⁴⁶ Many found it difficult to find suitable alternative employment.

Practical steps

Given that the population is generally ageing, early retirement will still be an attractive option to many employers wanting to reduce workforce numbers, and some employees who no longer wish to retain their current employment. However, employers need to reconsider the consequences of early retirement to ensure that key skills, knowledge and experience are not lost, and that the age balance of the organisation is not skewed in favour of the young.

Where early retirement is used as an alternative to redundancy, EFA research suggests that objective criteria should replace age as the main criterion for selection.³⁹ It says the key questions for management are:

The following example from Worthing Priority Care Community & Mental Health NHS Trust illustrates how an approach based on objective criteria works:

"[The trust] considers that making older workers redundant to be too expensive. Any money used for redundancy payments or to up pension funds would directly affect spending on patient care. Early retirement is therefore not encouraged. If redundancies are necessary, selection is not automatically based on age or length of service. Instead ability and continuing contribution are of prime importance, as is the individual's flexibility and willingness to take on new tasks or training."³⁹

An employee's contract of employment may specify a retirement age or staff may retire when they reach the normal state retirement age (currently 65 for men, and 60 for women - although parity at 65 will be phased in between 2010 and 2020). However, there is no requirement for people to stop working - except someone in receipt of an occupational pension cannot continue working for the same employer; personal pension schemes do not have the same rule and can be drawn irrespective of whether the employee continues to work for the same employer (see Sainsbury's example in figure 3.4). The state pension is paid regardless of earnings, while an employee retained after the contractual retirement age can have his or her contract altered or a new one drawn up.

The normal retirement age in the civil service is 60, although departments and agencies have autonomy in establishing their own approach, as long as the policies meet four conditions, including:

B&Q has recently altered its previous retirement policy, which, since 1989, had allowed employees to continue to work over the normal retirement age of 60 on a fixed-term contract that could be renewed every two years. In 1999, the company removed the upper working age limit altogether, so that older employees no longer need to go on to a fixed-term contract but can choose to retire at the age that suits them (see case study 1, Chapter four).

Mid-life career planning courses, which typically take place 10 to 15 years prior to the normal retirement age, and which are designed to help individuals plan the financial aspects of their retirement, will give employers a good indication of whether someone would like to work on after retirement or not. The regular appraisal process will enable employers to judge whether an individual's performance merits extending their working life and whether they have the necessary skills to continue to make a contribution. Regular dialogue with line managers, such as at review meetings, will enable employees to indicate when they would like to retire.

Many employees may not wish to stop working entirely, but continue to work on a part-time basis or they might want to reduce their working hours over time. Flexible retirement arrangements will give people the option of remaining in employment until a date of their choice. Gradual retirement, which typically involves reducing working hours or extending holiday provision, allows employees to adjust to retirement. Flexible and gradual retirement both overcome some of the negative outcomes associated with early retirement. Phased retirement ensures that skills and knowledge remain in the organisation for longer and, by establishing arrangements such as mentoring, these can effectively be passed on to younger staff.

Problems and possible answers

Most employees opting for phased retirement that involves a reduction in hours will suffer a fall in pay. Given existing occupational pension arrangements, this may have a negative effect on their pension. For example, the calculation of a scheme member's pension might be based on their highest 12 months' earnings in the last five years of employment. If the individual received reduced pay during the phased retirement period he or she might suffer a loss in the final pension payment. Therefore the rules governing pension schemes will need to be carefully examined and adapted to take account of reduced pay in the run-up to retirement and protect individuals from incurring a shortfall.

Also, Inland Revenue (IR) rules covering occupational pension schemes are complex, and at present prevent any part of a pension being taken before full retirement, so any short-fall in take-home pay cannot be remedied by drawing part salary/part pension. As was noted above, IR rules do not allow someone to receive a pension and continue to work for the employer who sponsors the pension. However, IR rules do allow some degree of flexibility for people opting to reduce their hours of work without damaging pension entitlement.

Company pension scheme arrangements also present a problem when recruiting older workers or when retirees are re-employed on new contracts. The rules of many pension schemes specify a maximum entry age for new employees, typically between one and five years before normal pension age. Although research suggests that older workers consider a good level of pay more important than access to pension and other benefits, exclusion from a pension scheme makes the overall remuneration package less attractive.⁴⁷

The EFA, in a study entitled Delivering flexible retirement, evaluated a number of ways of increasing flexible retirement for those below normal retirement age:

There are drawbacks with each of these options, however: transferring to a personal pension is risky; deferred pension will reduce the amount that will be received once fully retired; finding a new job might not be possible; and not all workers have AVC benefits.

The EFA identified the following three options for companies wanting to protect final-salary pension payments, while reducing the number of hours an employee works:

Sainsbury's is one organisation that has attempted to navigate the complex rules governing pension arrangements in order to make the schemes more attractive to older workers. In May 1998, the food retailer introduced a new group personal pension plan (GPP), as well as overhauling its final-salary scheme. According to Geoff Pearson, Sainsbury's pensions manager, the GPP provides many new options for staff aged between 50 and 75.⁴⁹ It facilitates the trend already established in retailing in which staff nearing retirement move from full-time to part-time employment and continue to work after normal retirement age or who return to work after a period of retirement (see figure 3.4).

MAKING EMPLOYMENT MORE ATTRACTIVE

Aside from removing age bias from recruitment, promotion and training decisions, and ensuring pension arrangements do not prevent older workers from continuing to work, employers can retain and recruit more mature employees if they address their needs and make the workplace a more attractive place for them to work. The following section examines the main issues.

FLEXIBILITY

Most traditional employment patterns, such nine-to-five, Monday to Friday, are not conducive to family duties. Neither do they fit the increasingly 24-hour society, which, for example, requires stores to operate round-the-clock and manufacturers to run continuous production processes. As a result, both employees and employers require greater flexibility in working time and mobility. Chapter two noted that many older workers, especially those in the post-retirement cohort, were happy to work part time.

Older workers have specific needs with regard to flexible working. Responding to these requirements - which may also benefit younger workers - will both help to retain the services of mature employees and make the organisation more attractive to them as an employer. Family-friendly working practices that enable workers to balance the demands of work with their family commitments better have attracted considerable attention recently from both employers and government. One area of the family-friendly agenda that is of particular interest to older workers is the provision of eldercare. The ageing population will result in a big rise in the numbers of elderly dependants requiring care, making this issue increasingly important for both employers and employees in the future.

Eldercare support

One in five people aged 45 to 64 was providing care to someone else in 1995-96.⁵⁰ Research by the Institute for Employment Studies in 1997 found that one in six employees, primarily women, care for elderly relatives.⁵¹ Caring responsibilities that older workers are most likely to have include care for elderly relatives, care for a terminally ill spouse and care for a disabled child. The varying situations produce unpredictable demands, so a range of flexible working arrangements is required. A study by the Carers in Employment Group found that the flexible working arrangements most valuable to carers were time off for emergencies, flexible working hours, working from home and part-time work.⁵²

Employers appear to be aware of the growing eldercare responsibilities of employees. A study by Black Horse Relocation Services in 1998 reported that almost 40% of managers surveyed believed that the care of elderly relatives would become a workplace issue for employers over the following five years, with the same proportion saying that their companies would introduce measures to help such carers.⁵³

Carers tend to respond favourably to employers who understand their situation and the implications of their responsibilities. Ideally, support for staff to reconcile working and eldercare obligations should form one element of an overall caring strategy for caregivers, including those with childcare responsibilities.

A survey of family-friendly policies in 83 organisations by IRS found that only 12% offered assistance with eldercare.⁵⁴ In addition, 91% of respondents gave some or all employees time off to deal with family emergencies. Companies providing help with eldercare include Body Shop International; general manufacturer Crosslee; Basingstoke-based pharmaceutical business Eli Lilly; Swindon Borough Council; education body Ofsted; Barnet Healthcare NHS Trust; North East Wales NHS Trust; and Priory Healthcare Wearside NHS Trust. Those organisations with eldercare assistance also offered a range of other flexible working arrangements for carers, such as part-time working, job-sharing, term-time working and career breaks for family reasons. Body Shop International, Crosslee and Eli Lilly all report that family-friendly policies, including assistance with eldercare, have improved recruitment and retention.

Richard Worsley, author of Age and employment, says: "Policies for carers should be monitored regularly to see whether they are meeting the needs of employees and of those they care for, to encourage ideas and feedback from carers, and to help adapt and improve arrangements."¹⁷

JOB DESIGN

One aspect of employing older workers that concerns many employers is the issue of health. The perception is that older workers are less healthy than younger ones, and this prevents them from continuing to do their job. Although research indicates that the proportion of people with a health problem is higher among successively older age groups, there are likely to be as many differences within age groups as there are between them and these will depend on several factors, including lifestyle.

As chapter two highlighted, ageing involves many small physical and mental changes: physical strength declines with age from a peak at 20 to 30 years old, and joint mobility and body posture gradually alter between the ages of 20 and 60. Adapting machinery, workstations and practices to accommodate the needs of an ageing workforce will ensure that older workers remain productive throughout their working lives. Research indicates that the modification of jobs and the workplace environment can extend the working lives of older workers.⁵⁵

The Turku conference on Active strategies for an ageing workforce stated that age-friendly job and workplace design should include: adapting the workplace, premises, equipment, working hours and processes to the employee's changed capacities; taking the changed capacities of older workers into consideration by selective organisation of training opportunities; [and] workplace measures for occupational safety, health and rehabilitation.⁵⁶

Philip Taylor and Alan Walker found little evidence of job redesign to accommodate the needs of older workers. Yet the proportion of workers retiring through ill health is high. One survey found that in the average pension scheme 12.7% of all retirements were on grounds of ill health.⁴⁴ Another study, looking at ill-health retirement between 1990 and 1995 in the pension schemes of six organisations - the police, fire and ambulance services, the Post Office, the Teachers Pensions Agency, and Rover - reported that around 15% of people in the schemes retired early on ill-health grounds.⁵⁷ The results showed that musculoskeletal and "minor" psychiatric illnesses such as stress, anxiety and depression were the most common reasons for retirement.

Good job design can help to alleviate some work-induced illness and disability, such as eliminating heavy lifting to relieve musculoskeletal problems. In many instances the job, workstation or workplace changes needed to overcome problems do not require extensive modifications. According to Walker:

"Good practice with regard to job design may take the form of preventive measures or ones intended to compensate for physical decline. For ageing workers who are experiencing physical decline, it is possible to modify the workplace in order to assist them to maintain their productivity and, therefore, to remain in employment - for example, making changes to lighting levels to compensate for changes in eyesight or alterations to workstations in order to avoid arduous bending and reaching."³

Interventions in job design that are intended to benefit older workers should be age-neutral rather than age-specific - that is, modifications should be implemented to benefit the whole workforce.

In addition to job design, employers should consider establishing regular health checks for employees, as well as advice on fitness, exercise and healthy eating, to help prevent illness as workers mature.

Figure 3.1: Code of Practice on Age Diversity in employment

The code covers good practice in six aspects of the employment cycle: recruitment, selection, promotion, training, redundancy and retirement. A key factor, though, in ensuring success in delivering good practice is a genuine commitment from top management to its implementation, which is communicated clearly throughout the organisation and beyond.

Recruitment

Recruit on the basis of the skills and abilities needed to do the job.

Selection

Select on merit by focusing on application form information about skills and abilities and on performance at interview.

Promotion

Base promotion on the ability, or demonstrated potential, to do the job.

Training and development

Encourage all employees to take advantage of relevant training opportunities.

Redundancy

Base decisions on objective, job-related criteria to ensure the skills needed to help the business are retained.

Retirement

Ensure that retirement schemes are fairly applied, taking individual and business needs into account.

Good practice in the employment cycle

Action to eradicate age discrimination should be taken as part of a wider personnel and equal opportunities strategy to create a flexible and motivated workforce. An effective strategy for implementing good practice will begin by reviewing the current position to clarify what needs to be done and how to monitor progress.

Recruitment

Recruit on the basis of the skills and abilities needed to do the job.

The aim of any sensible recruitment strategy is to find the right person for the job. To do that, organisations need to identify the skills and abilities that are needed to carry out the work, and to make sure that the vacancy advertisement states these clearly.

To ensure the best candidates apply, employers should:

Selection

Select on merit.

To select the best candidate for the job, employers should:

Promotion

Base promotion on the ability, or demonstrated potential, to do the job.

The principles which apply to fair selection in recruitment apply equally to the promotion process. Consideration for promotion should be based on the ability of the candidates to do the job or whether they demonstrate the potential to do so after suitable training. Employers should:

Training and development

Encourage all employees to take advantage of relevant and suitable training opportunities.

The business with the most skilled, flexible and committed workforce has a more competitive edge. Skilled and motivated people are more productive, produce higher quality work, reduce costs and wastage and increase profitability. It makes sense to ensure that all employees are encouraged to take advantage of relevant training and development opportunities throughout their employment:

Redundancy

Base decisions on objective, job-related criteria to ensure the skills needed to help the business are retained.

Using age as the sole criterion when selecting people for redundancy can lead to the unnecessary loss of skills and abilities which are essential to the organisation. Try to avoid this by:

Retirement

Ensure that retirement schemes are fairly applied, taking individual and business needs into account.

Employers can demonstrate their commitment to dealing fairly with employees, whilst looking to the best interests of the organisation by:

Source: Department for Education and Employment, June 1999

Figure 3.2: Age and equal opportunities checklist

The Employers Forum on Age recommends that employers use a checklist, including the following main points:

As a recruiting organisation you may be legitimately interested in age where relevant. However, the principal danger occurs with artificial exclusion of candidates at an early stage in the process simply because of age. If age is not relevant, the date of birth may be moved to the equal opportunities monitoring form.

The EFA points out that pay systems are increasingly being related to the size of jobs and how well people perform in them rather than the mere passage of time.

According to the EFA, a spread of attitude, with age, education and family history are often more important than ethnic origin alone, so companies need a discerning not stereotypical approach.

Source: Employers Forum on Age

Figure 3.4: Sainsbury's group personal pension

CASELET

Sainsbury's, the food retailer, fundamentally recast its pension provision in the light of business needs and changes to the career patterns of its 170,000 employees. Rising pension costs and the wish to provide employees with new pensions options prompted the company to introduce an employer-sponsored group personal pension plan (GPP) and overhaul its final-salary scheme, which has been in existence, in one form or another, since 1934.

The GPP - the J Sainsbury Personal Retirement Plan - began on 31 May 1998 and complements its final-salary scheme - the J Sainsbury Pension and Death Benefit Scheme - which was revised from the same date, with further changes planned in 2003.

Pressures for change

The long-term basic cost (including death benefits and administration) of the Sainsbury's final-salary scheme was calculated by its actuaries in 1997 to be 13.85% of pensionable earnings. This meant that, excluding fixed employee contributions of 4.25%, the company would see its contributions rise steadily from 5.8% in 1998 to 9.6% in 2009 - a jump of two-thirds. The main cause of the rise is a progressive fall in the pension fund surplus. Against this background of escalating costs, Sainsbury's - like other employers - looked for ways to stabilise the financial burden of its defined-benefit pension arrangements.

The other main pressure for change was the career patterns and pension needs of Sainsbury's staff. Long gone - particularly in the retailing sector - is the traditional pattern of full-time work for 40 years or more and retirement for all at age 60 or 65, with women leaving the workplace, perhaps permanently, once children come along.

Sainsbury's solution

The company wanted to introduce of some kind of money-purchase plan, which, together with a revised defined-benefit arrangement, would offer employees maximum choice and an adequate income in retirement.

For the money-purchase vehicle, the contracted-out money-purchase (COMP) scheme option was rejected in favour of an employer-sponsored contracted-in GPP. Advice from consultants indicated that, on balance, GPPs were a better option for employers and employees than COMP schemes. With GPPs, there tends to be rather less administration for employers, and employees may find personal pensions more portable. Employees are also likely to find personal pensions easier to understand than COMP schemes, particularly in regard to simplifying the concept of portability, and therefore conducive to making more effective choices.

Retirement and pension flexibility

The real potential for Sainsbury's GPP/final-salary combination comes in the area of flexible retirement planning for the company's staff. According to Sainsbury's pensions manager Geoff Pearson, many new options are opened up for employees aged between 50 and 75. At Sainsbury's, and in the retailing sector in general, there have been trends in recent years for staff near retirement to move between full-time and part-time employment, and to continue working after normal retirement age or even to return after a period in retirement.

Traditional occupational pension arrangements have often been too inflexible to accommodate these new working patterns. With the GPP scheme in place, a Sainsbury's employee could in the future take GPP benefits at any age from 50 and continue to work on a full- or part-time basis whilst at the same time enjoying the company's commitment to contribute to a fresh GPP until the age of 75.

Previously, such employees would normally have been excluded from company-sponsored pension arrangements. Similarly, an employee who retires completely from Sainsbury's and returns at a later date will be able to start a new GPP with contributions from the company.

Sainsbury's GPP arrangements

Full scheme name

J Sainsbury Personal Retirement Plan

Type of scheme

Employer-sponsored contracted-in personal pension, from Legal & General or Fidelity

Pensionable earnings

Basic salary or wages plus overtime pay and most other bonuses or allowances, but excluding profit-sharing payments and the Christmas gift

Member contributions

4.25% of pensionable earnings. In addition, member pays contracted-in National Insurance contributions for SERPS. Member also pays annual fund investment charges (out of fund) of 0.5% of fund in index-tracking Legal & General plan or, 2% in actively managed Fidelity plan

Company contributions

3% of pensionable earnings plus 0.75% for death benefits plus employer's contracted in National Insurance contributions. Employer also pays a monthly administration fee of £1.50 per member, which is subject to review

Eligibility

Minimum entry age 16, maximum entry age 74

Normal pension age

At member's choice, at any age between 50 and 74

Death-in-service lump sum

Three times pensionable earnings in the last year and four weeks' pay

Death-in-service pensions

Accumulated value of fund used to pay pension benefits to spouse or nominated beneficiary

Death-in-retirement pensions

Accumulated value of fund used to pay pension benefits to spouse or nominated beneficiary

Ill-health early retirement

Pension based on accumulated value of the fund

Transfer to alternative scheme

Employees become eligible for membership of final-salary scheme after five or more years' membership of GPP and if aged under 55. No transfer of GPP fund to final-salary scheme accepted

Early leavers

No refund of contributions payable. Member has preservation rights and transfer rights in line with personal pension regulations

Source: Sainsbury introduces group personal pension, Occupational Pensions, June 1998

Figure 3.5: Employers Forum on Age: commitment to age diversity

As a member of the Employers Forum on Age we are committed to promoting age diversity within our organisation by valuing the contributions which people make whatever their age, actively challenging the general acceptance of ageism at work and seeking to eliminate age stereotyping from the field of employment.

We aim to invest in an age diversity strategy by adopting the following six principles.

Agreement from top management to build age awareness into all aspects of the business

Demonstrate commitment to the Code of Practice on Age Diversity in Employment

Develop existing policies and working practices which will enable the organisation to achieve a better balanced workforce

Link age to other diversity issues whenever possible and appropriate

Increase awareness of the issues of ageism with employees, customers, suppliers and the wider community

Create measurable performance indicators and a reporting process including the EFA annual assessment

Source: Employers Forum on Age

¹     "Glad to be grey: tackling ageism at work", IRS Employment Review 611, July 1996.