Gordon Lishman of Age Concern and Philip Williamson of Nationwide

Question: What are the benefits of having older people as employees? 

Gordon Lishman: I would say there are tremendous benefits for businesses of having a diverse workforce – which of course includes workers from all ages.  Many companies believe there are positive implications of employing older workers.

Currently too much talent and experience is being wasted because of age discrimination.  Research shows that companies findolder workers to be conscientious, reliable, less likely than younger workers to have time off and more likely than younger age groups to contribute on a long term basis to the success of the company.

As more and more money and spending is concentrated amongst older people it becomes more and more important for commercial organisations to have a workforce that reflects our changing society.

Phillip Williamson: At Nationwide we extended our policies in 2001 to enable older people to work with us through to the age of 70.

Why is it beneficial?  We have found that older people tend to generate a valuable service to our customers, have better life experience, good judgement, and perhaps different values and priorities than younger people sometimes.

I think they bring a maturity and ability to relate to all sorts of people extremely well through their experience of life. One of the things that we have found is that there is a distinct correlation between customer satisfaction, employee commitment and the success of our business. We have discovered that older employees tend to be more committed to looking after their customers. That in turn has a positive effect on our business.

I think the other issue here is that the cost of turnover in all businesses is something that we have to manage. In financial services the average turnover of all employers is about 14 per cent per annum. In our case, turnover amongst the over 50s is down to four per cent. Every one per cent in turnover reduction at Nationwide saves us about £1 million per annum, so there are great commercial benefits in employing older people. It’s good for customers and good for our business too.

Question:  What are your views on mandatory retirement ages - should people be forced to retire?

Gordon Lishman:  I can see no reason at all why people should be forced to retire.  We at Age Concern believe that mandatory retirement ages should be scrapped. 

I’m pleased that we will have legislation on ageism at work by 2006.  But ending mandatory retirement ages is the lynch pin to successful anti-discrimination law. 

We believe the government has reached an important crossroads and that they must chose the right decision - otherwise the fight to end ageism in the workplace will face a serious blow. There is a strong economic argument for ending mandatory retirement ages.

Scrapping retirement ages will make a tangible difference to individual’s lives as well as bringing profit to all of us. It is the key to extending working life. 

If older people are forced to retire before they want to, they will not be able to contribute to the economy through paid employment.  At the moment the paid employment of older workers amounts to one third of the economy’s total. 

We believe that this valuable contribution could improve if barriers such as MRAs were abolished.   

But of course there are significant arguments for older people as individuals as well because they themselves may want to carry on earning money. They may well want to change the nature of the work they are doing and reorganise it but they may well want to continue doing things which interest them and make a contribution which will earn them some extra money. People should be able to choose if they retire or stay in work.  I see no positive case for keeping mandatory retirement ages.

Phillip Williamson:  WhilstI think everyone needs to have a date in mind as to when they plan to retire, removing a mandatory retirement age in my view isn’t a really a problem.

If there is a difficulty between an employer and an employee one would hope that the performance arrangements within the business would enable that to be resolved one way another.

The focus should be on an individual’s contribution, their achievements and so on. By removing a mandatory age there may be more debates around capability – but not necessarily so.  I think the key is how good the people in question are.  If they are performing well let them work on, if not the situation should be addressed through performance management.

Question: What do you say to employers about the problem of getting rid of people - does removing a mandatory retirement age really create this problem?

Phillip Williamson: I don’t think so. I think it is very much a corporate issue. We have 11 million customers - a proportion of them are elderly and may find it easier to relate to people of a similar age.

As society itself changes its age mix I think it is incumbent on businesses to employ people that can relate to their customer base. If people are fit and well, good at what they do and are committed to the challenge, then why shouldn’t they carry on working if they want to?

Gordon Lishman: I agree it is an interesting admission that one would assume applies to younger people as well. Presumably what a company worried about this would be saying is that they are incapable of building systems into their management practice. It seems to me to be an appalling admission if they can’t manage performance.

Question:Are older people missing out on the training and skills offered to younger workers?

Gordon Lishman: Yes - this is an area we are particularly concerned about. 

Within companies which have set retirement ages there is a tendency for a culture of a "countdown to retirement" with older people being offered less and less training opportunities as they get nearer retirement age.

We have heard cases of people of 40 being denied training as they are seen to be ‘too old’.  While older peopleare likely to posses a wide range of skills that come from experience, people of all ages need training to continue to adopt new skills and develop. 

Question:  What do you think businesses will have to do in advance of new laws? What will be the impact of the new law?

Gordon Lishman: Hopefullythe new laws in relation to age will be coming into place at a time when plans are in hand for a new Commission on Equality and Human Rights. 

This will be a body for employers and employees to turn to if they need advice about the new law. Employers already work towards legislation on gender, race, disability and now sexual orientation and religion and belief.

The implication of this is that employers will have to manage their businesses on a basis of equality - on a basis of allowing everybody who works for them to have an equal opportunity and an equal chance of training, of promotion, of contribution to the business.

Employers will have to make sure that they have competent systems of performance management in place. More important than that I think they will also have to understand the ways in which they can change employment patterns to meet peoples needs, which may also be ways in which they can develop and expand their own businesses taking advantage of the growing population of older people.

Phillip Williamson: I think there will certainly be an obligation on all businesses to look at the impact of the new laws, although I believe that most companies have started to do this.  

Employers will need to review all of their employee policies carefully - recruitment, selection, training, pensions, benefits, etc.  

They will need to look at all their policies in light of the legislation to ensure that they are not discriminating in some way against either younger or older people. It may cost a bit of time and energy, but I think that it is very important that businesses do this.  It is an obligation they have to fulfil.

Question: Do you think it will be costly to implement new laws?

Gordon Lishman:  No, I think it will be a great deal less costly for instance than the implications of legislation on disability. The main costs to business will be the cost of having in place the systems which they ought to have in any case.

There isn’t evidence that there will be a large number of expensive changes, the evidence suggests that people will be helped to make any tweaks to their existing system, which they need in order to be able to make the new system work effectively.

Ageism is already costing the economy £31 billion a year.  These negative costs far outweigh the immediate costs of implementing what are only fair employment practices.

Question: What issues face smaller businesses employing older people?

Gordon Lishman: Again comparatively little change because small businesses already have obligations in relation to disability, race discrimination or equal opportunities legislation.

 

All the new law will be doing is taking that a stage forward and making sure that employers’ systems are wide enough and competent enough to work  Small companies already see the value of employing older workers. 

 

Those over state pension age are twice as likely as younger workers to be employed in very small firms.  Many small and medium enterprises already do not have a set age at which employees should retire. 

 

Scrapping mandatory retirement ages will not be as much of a shock to business as has been portrayed.  According to the government’s statistics, 40 per cent of employees already do not have MRAs applied to them.

Phillip Williamson: I think that the issues are the same for smaller businesses as they are for larger ones.  Obviously, a small business may not have the resources to deal with these issues as expertly as larger groups perhaps can.

It is up to individual companies to check their policies. My own view is that there has to be a mutual agreement here. If people are able to perform and perform well, most businesses I am sure would welcome them continuing to work in those organisations.

Older employees offer a wealth of experience, knowledge and good judgement. I don’t think whether they are 65 or 70 is the key issue.  What is important is whether they are good enough and able to do the job well.

Question: How important is flexibility in the workplace?

Phillip Williamson: Flexibility at work is increasingly important.  People of all ages want to take time out. I think pension and employment policies need to reflect this.

In our case flexibility isn’t so much to do with an age issue.  We employ a lot of women at Nationwide and we have had to change all of our policies to allow many of our young female employees who leave to have families to come back.

They have valuable skills and experience and we want them to carry on working for the group. So I think flexibility in all employment policies, regardless of whether employees are young or older, is an increasingly important item on the agenda.

Gordon Lishman: Flexibility will be key.  A major question will be about what happens to pension schemes and what happens to people’s income in retirement. 

Some people will choose to work because they want to earn more pension, they want to earn more income and they will be making a trade between their leisure time and the amount of time they spend working. 

Older people will choose to retire from full time work and move into part time work, they will choose to retire from paid employment and be involved in volunteering opportunities or contributions to their families perhaps as grandparents.

Older people want a wide range of choice – I think one of the changes that will take place over the next five, 10, 20 years is that society will find more ways of giving older people a choice and people will find more ways of creating choices for themselves. 

The debate around age discrimination in the work place and retirement ages is about people being able to choose to work in later life and not being forced to do so.  

Question: What will the workplace look like in 20 years?

Gordon Lishman:  I think there will be more older people in the workplace in 20 years time, but the nature of the work will have changed to some extent – there will be more mutual working, there will be more home working, there will be more job shares, more part time workers and so on and that is simply an extension of current trends and I think that is likely to happen but one result of that will be that we have a more age diverse workforce which for the reasons I said before have a considerable economic benefit.

Phillip Williamson: I think it will be different from the way it is today. There will be fewer young people and a lot more elderly people, and they will be the people who are cash rich in many cases.

Many more of our customers will be elderly. Today, one in three in the workforce is over 40 so my guess is that in 20 years time that figure might be one in two. 

At Nationwide, a higher percentage of ouremployees are now over 50, (about 12 per cent), that’s up two per cent over the last 10 years and I would expect that trend to continue.

Question: What will management look like in 20 years time?

Phillip Williamson: That’s a more difficult one. We are finding that more people are getting into management at a much younger age. We ask a lot of our young people these days and they are keen to take on responsibility. We have to make sure they are trained and skilled to do that. It often comes down to attitude and behaviour.

We also try and give older people the opportunity to train and take on managerial roles as quickly as possible. Nationwide took part in the launch of the Age Concern Pledge last year.

We invited two or three of our managers along to the event to talk about their own experiences.  They had joined Nationwide after the age of 50 and embarked on second careers having been displaced from their previous jobs.  They are making great progress as senior managers. So to summarise, I think management will be a mix of all ages in the future; again it depends on the individual and how good they are.

Question: Do you think older people want to work for longer?

Gordon Lishman: People want different things but everyone wants choice.While many people want to work in later life and are frustrated by the barriers which stop them working or re-training, a lot of people look forward to retirement at a certain age and the opportunities that will offer them. 

Age Concern agrees with the government’s position that the state pension age should not rise.  This will disproportionately affect the poorest people who have worked for longest in the hardest physical jobs. 

However, we do not think barriers should stop older workers who want, or because of their income need to continue to work.  I do not believe that someone's date of birth should have any bearing on when they exit the workplace.