June 12, 2013
The latest employment figures published today by the Office for National Statistics (ONS) show an interesting demographic trend. Beneath the rather unexceptional news that employment rose by 24,000 and unemployment fell by 5,000 in the three months to April, is what Jim Hillage, Director of Research at the Institute for Employment Studies (IES) describes as “underlying structural changes in the labour market”. The number of employed people over 65 in the UK has now reached more than a million (1,003,000), the highest since records began in 1971. This means that almost one in ten of over-65s are now in work.
What this could mean for younger workers trying to enter the job market will no doubt be hotly debated, but it’s obviously got huge implications for a UK employment market without any Default Retirement Age (DRA). Many employers say they are worried about employing older staff In April nearly half of the employers surveyed by law firm Eversheds said they would like the DRA reinstated, despite admitting that keeping on their older workers had saved their organisations’ recruitment and training costs.
There appears to be an assumption that an aging workforce is less productive, yet a major study by U.S Economist Gary Burtless into the effects of an aging workforce on U.S worker productivity has found no detrimental effect on the wider working population.
In his blog on the research which was funded by the U.S. Social Security Administration he writes: “The expectation that older workers will reduce average productivity may be fuelled by the perception that the aged are less healthy, less educated, less up-to-date in their knowledge, and more fragile than the young. While all these images of the elderly are accurate to some degree, they do not necessarily describe the people who choose to remain employed at older ages.”
In the UK, a report by the House of Lords Committee on Public Service and Demographic Change predicted there will a 50 per cent rise in the number of those aged 65+ and a 100 per cent increase in those aged 85+ between 2010 and 2030. This raises a number of concerns regarding pensions, healthcare and how best to utilise what the Department for Work and Pensions in its guidance on “Employing older workers” calls an “untapped source of labour”.
The figures published today are further proof that the real demographic challenge isn’t about meeting the needs of the younger so-called “Generation Y” group of workers but accommodating an increasingly multigenerational workforce.
By Sara Bean