Creative approaches to workforce ageing: An imperative for national governments, business and people Dianah Worman, OBE – CIPD Diversity Adviser John Ball, TUC Policy Officer CAWA EU Conference, Madrid 13 November 2007

Managing age in the 21 st century – the UK experience demographic changes labour market challenges part of the broader diversity agenda the war for talent replacement costs national interests social interests business interests personal interests new legal requirements maintaining knowledge and skills imprint Why it needs attention:

Demographics: the patterns and challenges are similar across the EU

UK demographic changes in % of the workforce is projected to be aged 40 and over the average age of minority groups in the population is younger than their white counterparts Source – Office for National Statistics (ONS)

UK labour market challenges increased longevity decreased birth rate economic activity rates economic employment structures economic growth globalisation

CIPD inclusive definition of diversity Everybody is different, everybody is unique, everybody has strengths and weaknesses, everybody has something to bring to the party. Part of the broader diversity agenda

The war for talent 84% of survey respondents experienced difficulty in filling vacancies Source – Recruitment, Retention and Turnover 2007: A CIPD survey of the UK

The war for talent Key facts recruitment problems persist key reason for recruitment difficulties is a lack of necessary specialist skills the majority of employers claim the main business driver for seeking to recruit younger and older workers is overcoming recruitment difficulties and skills shortages Sources: Tackling Age Discrimination in the Workplace: Creating a new age for all. CIPD 2005 Recruitment, Retention and Turnover 2006: A CIPD survey of the UK

The war for talent Key facts almost a quarter of organisations say that age is a factor in their recruitment decision-making process many individuals experience age discrimination at the recruitment stage new 2006 survey shows retention initiatives are important because employers are struggling to keep hold of employees, for example difficulties jumped up from 69% to 78% from 2005 to 2006 Sources: Tackling Age Discrimination in the Workplace: Creating a new age for all. CIPD 2005 Recruitment, Retention and Turnover 2007: A CIPD survey of the UK

The war for talent

Replacement costs The UK average turnover cost in 2006 was £7,750 The UK average recruitment cost in 2006 was £4,333 Source – Recruitment, Retention and Turnover 2007: A CIPD survey of the UK

UK plc interests If older people were not discriminated against, more would be in work and the economy would benefit by c £31 billion/ 41 billion Source – The Employers Forum on Age Personal interests Although many people retire early, as people get older more say they want to carry on working for longer – 31% of respondents wanted to work until the age of 60 Source – Age, Pensions and Retirement: Attitudes and expectations. CIPD 2003

New UK age regulations give individuals rights not to be discriminated against because of their age regarding jobs and training, and responsibilities to all employers and providers of vocational training not to discriminate unfairly on the basis of age prohibit direct and indirect age discrimination, harassment and victimisation The Employment Equality (Age) Regulations October European Equal Treatment Framework Directive (2000/78/EC)

Main points about UK age law allows for objective justification of different treatment where it fulfils a legitimate aim and where circumstances make it appropriate and necessary provides for General Occupational Requirements and Positive Action A consultation on UK discrimination law in 2006 raised questions about extending age law to include access to goods and services

Actions employers have taken and still need to take to remove age bias in employment and training Reviews of: recruitment advertising application forms recruitment and selection processes reward and recognition systems the use of medical advice policies and practices on training and development issues related to retention and redundancy and retirement harassment based on age Many employers made changes ahead of age law

Challenges employers face to manage age in the workplace auditing employment and training policies and practices designing a strategy for change training and engaging decision-makers including line managers and individuals guarding against bullying and intimidation related to age keeping up to date with good practice and case law being alert to age issues regarding access to goods and services

Key challenges employers face to manage age in the workplace Changing mindsets from negative to positive thinking focus on the business case and the spirit behind the law, not on damage limitation and compliance being creative about employment policies and practices and job design being solution focused addressing health and wellbeing and age age is part of the mainstream equality agenda managing change to make progress How?

Hot topics for attention retirement flexible working training and career management job design

Retirement Peoples views about retirement 80% of people expect to retire by the age of 65 yet over 60% think that the average person will retire at 66 or above Source – Tackling Age Discrimination in the Workplace: Creating a new age for all. CIPD 2005 Employers issues on retirement need to retain skills and knowledge succession planning pensions managing poor performers Suggested employer responses to manage retirement financial incentives (30%) flexible pension arrangements (25%)

Flexible working older workers look for more flexible working options 68% of respondents anticipate working part time towards the end of their career 24% of respondents say that this would be the most important factor when deciding when to retire 32% of organisations offer older workers part time opportunities l Source – Tackling Age Discrimination in the Workplace: Creating a new age for all (CIPD 2005)

Training and career management Older employees need: more tailored training and career development opportunities tailored career advice greater encouragement to embrace technology to be used much more as mentors Source – Tackling Age Discrimination in the Workplace: Creating a new age for all. CIPD 2005

Training and career management providing appropriate, tailored training and career development opportunities and advice offering encouragement to embrace technology using older workers more as mentors job design Over 90% of managers agree with the need to invest in older workers skills Challenges ahead include: Source – Tackling Age Discrimination in the Workplace: Creating a new age for all. CIPD 2005

Whats happening? 70% of employers are actively seeking to recruit people aged between 55 and pension age 31% of organisations are seeking to recruit people already entitled to the state pension UK employers are beginning to target older workers close to three-quarters are seeking to recruit people aged between 55 and state pension age a further 30% are seeking recruits already entitled to the state pension almost half of organisations are keen to hold on to their existing older staff around half of organisations consider both flexible pensions and flexible working as important means of retaining older staff Source – Recruitment, Retention and Turnover 2006: A CIPD survey of the UK

Challenges for the future understanding and meeting older workers needs and preferences engaging and motivating older workers developing flexible retirement options designing flexible pensions making provision for caring responsibilities Health warning: DONT FORGET Managing age includes addressing the younger workforce too! Meeting business needs by:

NEW UK consultation related to managing age How can we keep working age people healthy and how can the workplace be used to promoted health? How can people best be helped to remain in or quickly return to work when they develop health conditions including chronic disease or disabilities? How does the age of the person affect the support that is needed? How can we encourage action to improve employee health? What underlies the apparent growth in mental health problems in the working age population and how can this be addressed? What constitutes effective occupational health provision and how can it be made available to all? What would be the impact on poverty and social inclusion of a healthier working age population? What are the costs of working age ill-health to business and what are the benefits to companies of investing in the health of your staff?

NEW UK consultation related to managing age How can we keep working age people healthy and how can the workplace be used to promoted health? How can people best be helped to remain in or quickly return to work when they develop health conditions including chronic disease or disabilities? How does the age of the person affect the support that is needed? How can we encourage action to improve employee health? What underlies the apparent growth in mental health problems in the working age population and how can this be addressed? What constitutes effective occupational health provision and how can it be made available to all? What would be the impact on poverty and social inclusion of a healthier working age population? What are the costs of working age ill-health to business and what are the benefits to companies of investing in the health of your staff?

CIPD research and good practice guidance on age and employment Managing Age: A guide to good employment practice (Survey report, February 2007) Joint CIPD and TUC Age and Employment (Factsheet, March 2006) Tackling Age Discrimination in the Workplace: Creating a new age for all (Survey, October 2005) Equality and Diversity: Coming of age (CIPD response to the DTI consultation on the draft Employment Equality (Age) Regulations 2006, October 2005) The Challenge of the Age (Change Agenda, November 2003)

OASPG OASPGOASPG pportunity ge trategy artnership roup UK cross government initiative Employment sub-group

3 Case Studies Arriva Bus Centrica NHS

The context All Have gone through organisation change and market positioning All have had recruitment and retention issues All suffer from skills shortages All have decided to challenge the issue of age and labour/skills depletion

Arriva Buses Maintain Terms and Conditions Flat Rate Salary not bonus related Flexible Working along with part time Maintaining health and well being Training opportunities

Arriva Job Satisfaction Opening up of other job opportunities Imprint of work collectiveness social solidarity

British Gas Centrica Life style contracts Flexible job design Work patterns blend business and individual needs Maintain terms and conditions Creating engineer career development Assessor qualifications

British Gas Centrica Workforce planning for succession Maintain knowledge footprint Wider age apprenticeships Adult entry training Diversity (e.g gender, race, age) Reflect customer base

NHS Removal of retirement age Flexible retirement Active returners policy Flexible working Challenging any age discrimination

NHS Auditing age profile Understanding the demography Training and development strategies to reflect the need to maintain workforce Healthy workplace and well being Intergenerational learning Using Volunteers Age Champions

Finally Age comes to us all……………………see it as a personal investment for the future.

Thank you