Retirement age must be scrapped sooner rather than later, says EFA
The government agreed to review its decision to keep the default retirement age in 2011. But, as Personnel Today and the Employers Forum on Age argue, why wait until then?
On this page:
Drivers for scrapping retirement age
Case study: B&Q
Case study: Hertfordshire County
Council
Retirement as a performance
management tool
Senior civil
servants
About Personnel Today's
campaign
HR directors back Personnel
Today's campaign
There was something of a scrap about compulsory retirement when the government was drafting the age legislation that came into force in October 2006. The Employers Forum on Age (EFA) wanted the idea dropped, arguing that putting an arbitrary cap on retirement was going against the spirit of a law designed to remove age discrimination.
In the end, the default retirement age was retained, but employers were permitted to ignore it. However, the government also agreed to review this decision in 2011; meaning the HR community is about two years away from the whole argument resurfacing.
Drivers for scrapping retirement age
But rather than wait until then, Personnel Today and the EFA are campaigning to bring the issue back into the spotlight now.
"This [decision] was a compromise and we want the government to commit now to abolishing it in 2011," said EFA chief executive Catharine Pusey. "We think it is inevitable that it will happen because of demographic shifts."
People are living longer and there are fewer children being born, which adds up to a strong business driver to keep older people in the workforce for as long as they want to remain there, and are capable of continuing to work. Making the decision now rather than waiting until 2011 would also allow employers plenty of time to change their policies and practices accordingly, said Pusey.
Removing the default retirement age is a simple matter of consistency, according to Charlotte Sweeney, head of diversity and wellbeing at HBOS. "We [as a society] are telling people they will have to work longer to support the economy, but then put a limit on it," she said. "It makes no sense at all."
Then there are the business benefits reported by organisations, including HBOS, that have already ditched the age: increased staff retention, experience and knowledge; improved morale; a wider talent pool; and a workforce that more closely reflects its customer base.
Case study: B&Q
B&Q first tested the waters on this issue almost 20 years ago when it opened two stores staffed entirely by over-50s.
The DIY giant had ambitious growth plans and realised it needed to widen its talent pool to meet those targets, but there were some initial worries about employing older staff, said Leon Foster-Hill, B&Q's diversity adviser. "We needed to make sure it was going to work [and] we needed to be able to let all our managers know that it was not a risk having older workers," he said.
Rather than simply assuming the new idea would work, B&Q teamed up with Warwick University to compare the two experimental stores with four other outlets. The results were overwhelmingly favourable: profits at their stores were 18% higher, there was 39% less absence, and staff turnover plummeted.
Another business benefit identified by B&Q was the ability to hire plumbers, builders and other tradespeople who no longer want to work on building sites, but could offer a wealth of professional experience when advising customers.
Case study: Hertfordshire County Council
The need to find and keep experienced professionals was one of the reasons that Hertfordshire County Council scrapped its default retirement age in 2006. Like other local authorities across the UK, it struggles to recruit engineers, social workers and planners in the numbers that it needs.
Louise Harrington, the council's assistant director of HR, said: "For us, it made good business sense. Now we are seeing increasing numbers of people [in a wide variety of areas] staying on." What really surprises staff, she added, is that they don't have to ask to stay on - if they want to keep working, all they have to do is keep turning up.
Staff surveys before the change was implemented showed widescale support for the idea; employees simply could not see a reason to assume that people stopped being good colleagues on their 65th birthdays.
Closer to the implementation date, however, Harrington admitted the council did get "a handful of managers who wobbled a bit", saying they were looking forward to getting rid of people who weren't performing well. Her response was that managers should deal with performance issues as soon as they surface, regardless of an employee's age.
The council also undertook some change management work on a culture that sometimes allowed people approaching 65 to coast through until retirement.
Retirement as a performance management tool
Using retirement as a performance management tool was an issue raised by managers at a number of organisations that decided to scrap the compulsory retirement age, and is a line that the CBI has pushed in arguing to keep the default age. But Pusey insisted this was not a reason to avoid a decision.
"That is lazy management. You need to deal with a poor performer at any age. And it is a myth that as people get older their capacity reduces," she said.
Amanda Jones, head of diversity at the Co-operative Group, agreed. "I can see why some organisations might feel uncertain about [removing the retirement age], perhaps because they feel it's still a tool to manage people to leave," she said. "My response is that if your performance management is robust, there's no need to worry."
Scrapping the retirement age has not caused the Co-op any concerns - it employs 1,500 people over 65.
Even the government itself is getting behind the idea - as an employer, if not yet as a legislative body. Cabinet secretary Gus O'Donnell recently announced plans to ditch compulsory retirement for Civil Service staff by 2010.
"Like any organisation, we need people who have knowledge and experience in key areas, as well as those with fresh ideas to challenge conventional methods," he said. "I am proud that our Civil Service values all our people, regardless of age."
Senior civil servants
However, the decision does not apply to senior civil servants, who will still face a default retirement age of 65. A review will be carried out to assess whether or not mandatory retirement should be scrapped for this group as well.
Depending on the timing, that review could well become a non-issue if, as Personnel Today and the EFA hope, the government bows to the inevitable and scraps compulsory retirement sooner rather than later.
About Personnel Today's campaign
Personnel Today is supporting a campaign by the Employers Forum on Age to force the government to commit to remove the default retirement age in 2011. A growing number of employers have ditched the default retirement age of 65 and instead allow employees to retire when it suits them.
Personnel Today and the EEF are arguing that it is inevitable the retirement age will be scrapped, whatever the final outcome of the legal challenge by the Heyday charity, meaning now is the time for HR to show leadership and get it removed sooner rather than later.
Leading HR directors from Asda, the Co-op, Westminster City Council and the Public Sector People Managers' Association, have backed the campaign, encouraging HR professionals to make the decision to ditch the retirement age. You can register your support by signing our petition.
HR directors back Personnel Today's campaign
Stephen Moir, president, Public Sector People Managers' Association says: "The PPMA recognises the contribution that people at all ages make to the economy and at any point in their life. Setting a default retirement age in law completely contradicts the need for flexibility and inclusive approaches to employment, particularly for public services which have an increasing age profile."
David Smith, people director, Asda comments: "We believe that people will decide themselves when they want to retire. We also recognise that some people will need to work beyond the current retirement age for financial or other reasons. Either way, we would support the removal of this irrelevance in the modern age."
Graham White, HR director, Westminster City Council says: "There is no valid reason why a good employer would want to keep a mandatory retirement age. The benefits and effort put into making others see the value [of scrapping it] are dissipated by a ridiculous piece of legislation that allows unscrupulous employers to ignore the principles of equality and diversity."
