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 | | RETIREMENT AGE? WHO NEEDS ONE! | | | Age Positive at the DWP | | 28/03/2008 | | | Losing skilled and experienced workers can be an expensive business, no matter how big or small your organisation. The Chartered Institute for Personnel and Development estimates it costs as much as £8,200 to replace each employee who is forced to retire at 65.
Instead of imposing a fixed retirement age, taking a flexible approach to retirement can be more beneficial to both the business and the individual employee.
Over 1 million more people aged over 50 are in work than there were ten years ago. Indeed, the employment rate for the over 50s is increasing faster than that for younger people.
The employment rate of people aged 50 to State Pension Age has increased by 6.9 percentage points, from 64.7% in 1997 to 71.6% in 2007 - the highest older worker employment rate for 20 years.
So how can forcing people to retire at a certain age make good business sense if it leads to the unnecessary loss of skills and know-how ? There is no official retirement age in the UK, yet some companies are still asking staff to move aside at a certain age.
With fewer younger people in the labour market, increasing numbers of employers are now keen to recruit and keep older staff with valuable skills and experience.
So don’t discount implementing flexible working or flexible retirement options because you may think they are too difficult or costly. Employers agree there are some challenges, but the benefits in terms of retention of skills, reduced recruitment costs and the filling of skills-shortage vacancies by opening up a wider pool of recruits, bring valuable results. Enabling employees to choose to work longer through flexible or part time working means employers can retain those valuable skills longer.
We have an ageing population, and any business that doesn't take that on board and reflect it in their recruiting policies is storing up problems for themselves.
Domestic & General found that age positive recruitment and retention
initiatives reduced recruitment costs by 50 per cent. While BT believes that the success of their flexible policies is evident from the increase in the proportion of staff aged 50+. In the period between 2001 and
2005, it increased from 13 per cent to 25 per cent.
This means that older employees who aren’t ready to retire continue to enjoy the social and financial benefits of working. This shows that staff of all ages are highly valued, which makes for a highly motivated workforce, and staff who stay on beyond 65 make a valuable contribution to the organisation through their experience and commitment.
Remember, there is no official retirement age in the UK – the new age law
introduces a ‘default age of 65’ but this is not a mandatory retirement age.
The new regulations mean that you need to:
• look at your existing retirement policies and practices and consider if they require change
• consider whether flexible retirement options would be beneficial to your business and your staff and
• check that your pension scheme and any policies, practices or routines you operate are compliant with the new legislation.
If you require more information about Age Legislation and how your business can benefit from flexible retirement and become more age positive, please visit www.agepositive.gov.uk | |
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