Using age-diversity policies to attract and retain older workers
Even without the impending legislation on ageism, demographic trends will force employers to develop age-diversity policies. Here, we summarise developments affecting the recruitment and retention of older workers and look at the policies implemented by some employers.
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Demographic changes in the UK will mean that more than half of the population will be aged 45-plus by the next decade. This fact alone should be enough to alert employers to the need to develop a long-term resourcing strategy that embraces older workers.
But the maturing of the labour market is only one of a number of developments forcing the recruitment and retention of older workers towards the top of the employment agenda. A tight labour market, combined with the ongoing crisis in occupational pensions provision and the forthcoming legislation outlawing age discrimination - which will either raise or abolish the current mandatory retirement age - are also forcing the issue centre-stage.
While this article focuses on the recruitment and retention of older workers as a distinct employee group, this is in the context of clearly understanding that younger workers can also suffer from age discrimination. Any age diversity approach developed by an employer should be inclusive and apply to people of all ages.
The demographic time bomb
The composition of the population - and therefore the potential labour market - is changing dramatically and the "typical worker" is now a far cry from the stereotype of a white, young and able-bodied male. Apart from the greater numbers of economically active women and ethnic minority workers, the combination of lower birth rates and increased life expectancy means that the workforce is ageing.
These demographic trends have a direct impact on organisations' resourcing capabilities as they struggle to meet the shortfall in younger recruits. As Paul Wallace, author of Agequake, points out in his book on the subject1: "Nowhere will the 'agequake' strike harder than in the workplace. Yet nowhere seems less prepared for the challenge. Companies can no longer rely on a bubbling spring of new, young recruits. That spring is drying up to a trickle. The existing pool of workers is ageing rapidly."
A European Labour Force Survey2 undertaken in 2000 found that just over 50% of the UK population aged between 55 and 64 were economically active, a rate that compared favourably with those found in many of its European neighbours - although it represents a sharp decrease over the participation rates of younger workers.
A report by the Department of Trade and Industry's Employment Market Analysis and Research (EMAR)3 unit also makes reference to this latter point, but still contends that the ageing population is one of the key challenges facing employers in the UK. The report highlights the need to address the labour disadvantage experienced by older workers if organisations are to work more effectively.
The need to develop more inclusive employment strategies aimed at older workers is one that is now recognised as a key policy area by the European Union (EU). The Lisbon Strategy4 - a commitment to bring about economic, social and environmental renewal in the EU over a 10-year period - set a target rate for the employment of older workers in member countries at its Stockholm summit in 2001.
Ageist attitudes
The reasons for the sharp decline in economic activity once people turn 50 cannot easily be isolated. People decide to stop working for a variety of reasons, including ill health. Over the past 20 years, there has also been a definite trend of employees exiting the workforce early, encouraged by early retirement packages. There is no doubt, however, that discriminatory attitudes to older people must take a proportion of the blame.
The Chartered Institute of Personnel and Development (CIPD) in its guidance on age in employment5 says that age discrimination can:
The most available form of evidence charting age discrimination in the workplace derives from the direct experience of employees and jobseekers themselves. A nationally representative survey of more than 1,000 adults undertaken by the CIPD in 20016 revealed some sobering findings. The study reported that "ageism is still evident in the recruitment area", with one in eight respondents aged between 45 and 54 believing that they had been rejected for a job they applied for in the previous 12 months because the recruiter considered them "too old". Nearly a quarter agreed that employers are not interested in promoting people who are over the age of 40.
A wider context
According to Sam Mercer, director of the Employers' Forum on Age (EFA), prejudice against older workers definitely accounts in part for low participation levels in the workforce among this employee group, but this is only one factor.
As she comments: "We have to recognise there are also cultural drivers at play, such as the desire on the part of some people to retire early, and early retirement being seen as a measure of success. Participation levels are increasing, however, particularly among older women workers who may be more prepared to work part time or be more open to different types of work. Again, men re-entering the labour market who previously held senior positions may not be as willing to take a less senior post or take a cut in salary due to the expectations placed on them by society."
Aside from perceptions of bias, there is also the question of what employees themselves really want from employment as they get older. The 2001 CIPD survey found that a quarter would welcome the opportunity to work beyond the state pension age. Research carried out by Age Concern and Reed7, meanwhile, identified a shift in the number of people intending to work past the statutory pension age, with 48% saying they would work beyond retirement age. This compares with an estimated 9% of people over retirement age who are currently in work.
The business case
Estimates of the cost to the economy of ageism in employment range from £16 billion to £31 billion a year8. These figures are based on a calculation of the value of goods and services that those people aged between 50 and 64 who are not working would have produced had they remained economically active.
"Changing demographics and lifestyles, coupled with current and future business needs, had a major influence on why we decided to introduce our age-neutral policy," explains Mike Lawson, principal personnel officer at Aberdeen City Council. "We subsequently became the first Scottish council to be awarded 'Age Positive Employer Champion' status by the Department for Work and Pensions, a fact we are particularly proud of." (Details of the council's policy can be found in box 1.)
The ageing workforce means that employing older workers is no longer a choice but a business necessity. But it is not only a case of "needs must". Research shows that, in some cases, older workers can bring with them enhanced levels of reliability, commitment and loyalty.
However, Sam Mercer of the EFA is wary of promoting a stereotypical image of older workers: "Employing an older worker offers the same potential benefits as recruiting any capable employee," she says. "It is too easy to fall into the trap of promoting a very positive stereotype of older employees in order to challenge discrimination, but in so doing it suggests that the opposite is true of younger workers. The key is for an employer to be blind to age in their recruitment and other employment practices, and base decisions on skill and ability."
The business case for employing an age-diverse workforce is well documented. The EFA website8, for example, points out that the employer will:
The EFA does not only promote the business case, however, but believes that there are also compelling legal and social justice reasons for age diversity in the workplace. "It is not always straightforward to convince an employer of the business benefits of employing older workers. For example, a very small business that is not customer-facing will not appreciate the importance of having a diverse workforce to relate to a diverse customer base," advises Sam Mercer. "The legal case will become a strong reality in 2006, but there is also a very important social justice argument for age-diversity employment practices. Good employers do not discriminate on grounds of age, simply because it feels wrong."
Code of Practice
Although age discrimination is not currently outlawed in the UK, in 1999 the government launched a voluntary Code of Practice (www.agepositive.gov.uk) covering age diversity in employment, which was relaunched in 2002. It covers the six main areas of employment and puts forward the following measures of success:
Recruitment
- people from all age groups apply for jobs
Selection
- people who select new employees are trained in equal opportunities
- monitoring shows that age is never an issue
Promotion
- employees understand your policy on promotion, and think that it is honest
- there is a mixed-age workforce at all levels
Training and development
- people of all ages take up training and development opportunities
- results are monitored
Redundancy
- redundancy procedures are used that are based on business needs rather than age
- employees and their representatives are involved in planning for redundancy
Retirement
- there is an agreed, flexible and fair retirement policy, which all workers know about.
The Code of Practice is a voluntary set of good-practice standards "to help employers recognise the business benefits of an age-diverse workforce". Each section contains guidance and indicators of success.
The legislation
The deadline for the enactment of legislation restricting age discrimination in the UK looms ever nearer, although many employers could be better informed about its proposed introduction. Research carried out earlier in 2004 by the Cranfield School of Management and sponsored by Age Positive9 - the government's age diversity campaign - revealed that one in three employers were seemingly unaware that ageism was to be outlawed in less than three years' time.
The precursor to the forthcoming legislation was a consultation document entitled Equality and Diversity: age matters10, issued by the government in July 2003. The age discrimination legislation will come into force in October 2006.
Although the details of the legislation remain to be seen, it is clear that a similar approach will be adopted towards age discrimination as has been the case with the other main areas of discrimination law - that is, race, sex, disability, religion or belief and sexual orientation. The EU Directive underlying UK legal provisions prohibits direct and indirect discrimination, harassment and victimisation.
Where the impending legislation will differ significantly is that the employer will be able to justify direct discrimination on grounds of age in certain circumstances. While employers need to be aware of this provision, it should be emphasised that that this does not mean that any organisation will be in a position to claim a blanket exemption. Justification will be considered not only with reference to the employer's "aims" but on the basis of the particular circumstances of the case, which must be "exceptional".
In Sam Mercer's view, the legislation will have an important impact in the employment fi eld as it will protect people of all ages from discrimination. "For example, it is important to understand that an older worker does not have a clear classification," she says. "A common definition places the 'cut-off age' at 55, or, in some cases, at 45, but in some industries, such as IT, 35 could be considered already old, while in law it could be considered too young. The new regulations will therefore send a clear message that it is unlawful to discriminate on grounds of age in any context."
Sam Mercer is also of the opinion that there are several wider factors at play that will ease the introduction of the legislation by helping to convince employers of the need for age-diverse employment practices, such as the demographic trends of an ageing workforce and high levels of employment combined with national skills shortages. "The anti-age discrimination legislation will not be enough on its own to eradicate discrimination," she says. "Experience from overseas suggests that age discrimination legislation is patchy in its effectiveness. More deep-seated cultural change is also needed to change assumptions on age that are ingrained in society."
Age discrimination is most noticeable in the recruitment process. A recent survey by the CIPD11 found that one in five respondents had been discouraged from applying for a job because a recruitment advertisement in some way communicated an age restriction. However, it should be noted that this could mean the respondent felt either too young or too old. A further 15% of the sample felt they had been discriminated against at interview, and two-thirds of these people felt this because they were considered too old for the job.
According to Sam Mercer, discrimination can creep into the recruitment and selection process at an early stage, from the drawing up of job descriptions, and be manifest at any point up to and including the final selection decision. "Assumptions about age can be built into the whole process, and so it is important that an employer reviews every policy and practice very carefully to eradicate bias," she says. "We are launching a recruitment guide for employers - 'Avoiding the age trap' - that will deal with every stage of the recruitment and selection process."
Recruitment advertising
Age discrimination in recruitment can be either direct or indirect. Job advertisements, for example, can contain both overt and hidden discrimination. While job ads that stipulate a numerical age limit may be less prevalent now than in the past, a more subtle form of age discrimination involves the use of language that stipulates a particular age range is being sought. For example, "bright" and "enthusiastic" could be interpreted as a coded message that young applicants are being sought.
According to Tyrone Jones, diversity and organisational development manager at financial services company HBOS, it is disappointing to see so many ageist recruitment advertisements still in the marketplace. This has been highlighted by research carried out by the EFA, which encouraged its members to send in examples of ageist advertisements. He says: "Using the Age Positive logo on our advertisements clearly helps, but we also rely on the creativity of our recruitment suppliers to attract an age-diverse mix of candidates." (A case study of HBOS can be found in box 2.)
The Cranfield School of Management/Age Positive research mentioned earlier found that 57% of those surveyed avoided using age limits and age-related words in job advertisements. IRS research undertaken in 2003, meanwhile, reported that six in 10 employers said they did not formally set a minimum or maximum age limit for new recruits (see Legislation comes of age).
These two findings do not sit easily alongside the results of the CIPD's poll of individuals' experience of widespread age discrimination, cited above. One possible explanation is that discriminatory practices persist unofficially through the age-related assumptions that are being made about individuals when decisions are made during recruitment or promotion. Official policy may be changing, but attitudes are proving slower or more difficult to shift.
Recruitment material
The EFA has also recently produced an age-neutral application form that excludes all information concerning age - including education and career history - as part of its strategy to tackle age bias in recruitment. "Too often, age is used as a first sift to reduce a pile of CVs or application forms, and the form we designed is to raise awareness that there are other ways to present application details other than by way of a chronological work history," explains Sam Mercer.
"Having a separate form and keeping personal data, such as name, separate from the selection process also has very positive implications for race and sex discrimination. Hopefully, the form will encourage organisations to think about the information they are requesting on their application forms and generate a debate about a more competency-based approach to recruitment."
Aberdeen City Council actively promotes its age-diversity approach across the range of its recruitment activities. "To publicly demonstrate our commitment to tackling age discrimination, we use the Age Positive Employer Champion logo on our letterheads, job adverts and marketing materials, and we have received a very positive response from job applicants as well as from existing employees," says Mike Lawson. "We also promote our age-neutral policy at careers fairs."
Practical steps
The government's "Age matters" consultation document takes a firm line on age discrimination in recruitment, selection and promotion. It states: "There is a widespread acknowledgement that there is no room for age-based recruitment practices", although the EU Directive does allow for the possibility of "a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement". Employers need to await further clarification of this latter provision once the UK's draft regulations are issued.
Another area of recruitment that will need to be examined for potential age discrimination in the light of the new legislation relates to graduate recruitment schemes, which might indirectly discriminate against older workers.
Box 3 provides a checklist of practical steps that recruiters can take to help avoid age discrimination in recruitment and selection.
Retention and retirement
Whether to raise or entirely abolish a mandatory retirement age represents the most controversial aspect of the forthcoming legislation on age discrimination. The consultation document sought views on whether employers should be able to retire their employees compulsorily at or after age 70 - a "default" retirement age.
Whatever the eventual decision on this crucial issue, it may be that many employers could benefit from undertaking a voluntary review of their arrangements for retirement. Although some employers contend that they need the certainty that a mandatory retirement age represents in terms of succession planning and performance management, it could be that a more creative approach to retirement could enable organisations to retain key people and skills for longer.
Early exit from the workforce has long been encouraged as an alternative to compulsory redundancy, often at a high cost in terms of losing experience and corporate memory from the organisation. The government's Code of Practice says that: "So-called 'cliff-edge' retirement, where people go straight from full-time employment to full-time retirement, is a problem for both employees and employers. To maintain staff morale, and avoid losing valuable skills, make sure that retirement schemes are applied fairly; are flexible; and take account of individual and business needs."
It may be that an employee who is approaching retirement may not wish to stop working, or would consider a reduction in working hours. A number of organisations, such as HBOS and Bridgend County Borough Council, featured here as case studies (see box 2 and box 4), have relaxed their retirement arrangements to permit a more flexible approach.
Aberdeen City Council is another example. It introduced its Age Neutral Policy in April 2003 as part of its overall commitment to having a diverse workforce and tackling discrimination in the workplace. "Our policy recognises that age is not a reliable indicator of an individual's ability to adequately perform their job and, from a work-life balance perspective, it recognises that individuals should have the opportunity to choose when they retire," says Mike Lawson. "This approach has been welcomed by our employees and trade unions." The policy removed the council's previous age limit on recruitment and introduced a flexible retirement age.
"Under our policy, employees approaching the 'normal' retirement age now have the option of extending their employment and this option has already been taken up by a number of employees across a diverse range of occupations," says Mike Lawson. "These include management positions, teachers, part-time tutors, school-crossing patrollers and school escorts. We are keen to extend the take-up further."
Aside from removing age restrictions in recruitment and reviewing their retirement arrangements, organisations would also be in a better position to attract and retain mature workers if they were to make the workplace a more attractive place for them to work. This could include conducting a review of flexible working options - older workers have specific needs with regard to flexible working, and are more likely to have elder care responsibilities, for example.
Getting ready
The evidence shows that some employers still have a significant amount of work to do before the legislation restricting age discrimination in employment and vocational training is enacted in two years' time. It would be as well to start the review process sooner rather than later.
"Go through every policy in order to identify where there is an age bias and get rid of reference to age wherever you can," advises Sam Mercer of the EFA. "Don't wait until the regulations are due to come into force or it will not be possible to effect the change in ageist attitudes that will be necessary to comply with the new laws overnight. Employers should consider carrying out age diversity training for staff and there is also a wealth of information on the EFA website, including case studies from other employers, that organisations could find very helpful."
Tyrone Jones of HBOS has this advice for employers who are serious about adopting a positive approach to employing older workers and achieving an age-diverse workforce:
This article was written by Rachel Suff, a freelance employment researcher and writer, rmsuff@dsl.pipex.com.
1Agequake, Paul Wallace, Nicholas Brealey, 1999.
2European Labour Force Survey, 2000.
3Full and fulfilling employment: creating the labour market of the future, Department of Trade and Industry, www.dti.gov.uk.
4The Lisbon strategy, European Commission, www.europa.eu.int.
5Age and employment, Chartered Institute of Personnel and Development, 2001, www.cipd.co.uk.
6Age, pensions and retirement, Chartered Institute of Personnel and Development, 2001, www.cipd.co.uk.
7"Ageism is set to threaten plans for late retirement", performance management; Personnel Today, 30 March 2004, www.personneltoday.com.
8About EFA - business case for age diversity, Employers' Forum on Age, www.efa.org.uk.
9This age in the workplace, Cranfield School of Management on behalf of Age Positive, 2003.
10Equality and diversity: age matters and The way ahead applicants; consultation pack, Department of Trade and Industry, www.dti.gov.uk.
11Age discrimination at work, Chartered Institute of application forms; Personnel and Development, 2003, www.cipd.co.uk.
Age has been included within HBOS's equality and diversity policy for almost a decade. "Recognising that today's demographics represent tomorrow's business has already earned HBOS a national profile on age diversity," says Tyrone Jones, diversity and organisational development manager. "We have also supported the government's Age Positive campaign since it began and became an 'Employer Champion' four years ago." The company is involved in a wide range of activities, internally and externally, and on both a national and regional level, to promote age-neutral employment practices. Cultural change In Tyrone Jones' view, it is important to present the benefits of age-neutral recruitment and retention practices from a number of different perspectives, rather than focusing solely on the legislative argument. As he explains: "The forthcoming regulations are obviously crucial, but, to encourage a cultural change in attitudes to age, it is also necessary to appeal to people's logic, explain the demographics and show how age diversity in employment impacts on them so that they are motivated to change. It is also important to connect with employees, or 'colleagues', as they are known in HBOS, at an emotional level. Promoting age-positive role models and using staff magazines and the company intranet also plays an important role in getting the message across." HBOS therefore used the national Age Positive Week to launch its own Age Positive certificate, which is presented to colleagues and managers who display a positive attitude to age diversity. Broadening the recruitment net HBOS has undertaken a considerable amount of work with its recruitment suppliers to promote age-diverse employment opportunities. "There is sometimes an assumption on the part of employers that recruitment agencies understand your diversity needs and will therefore automatically send you a diverse range of candidates, but this may not always be the case," comments Tyrone Jones. "As a recruiter, you need to be explicit and clearly communicate the organisation's values and requirements." Another example of HBOS working proactively with its suppliers to broaden the age profile of its workforce is the link that the company has established with Encore Recruitment, a consultancy specialising in placing candidates aged 45 and over, many of whom have experienced difficulty in securing employment because of their age. The agency has amassed a large database of prospective candidates to appeal to employers interested in capitalising on the benefits of employing an age-diverse workforce. "We worked with Encore to help support our resourcing needs at our contact centre in Leeds," advises Tyrone Jones. "Since April 2003, over 60 people aged 45-plus have been successfully placed with HBOS through this initiative." According to Tyrone Jones, initially
implementing age-diversity policies and practices was "a slow burn" at HBOS,
but now the company's approach is increasingly "catching the imagination" of
the workforce, as colleagues promote themselves as age-positive role models
and share their experiences of working in age-diverse teams. |