The great unretirement? Governments and businesses go hunting for the older worker
Economic necessity is driving many older workers to delay retirement plans, while at the same time, many retirees are re-evaluating the viability of their decision to step away from employment.
New data from the United Kingdom’s Centre for Ageing Better shows the number of workers aged 50-plus has risen dramatically during the past two decades, with the 50 to 64 bracket rising 9.7 per cent and over 65’s by 5.8 per cent.
But over the pandemic the employment rate in the 50 to 64 age group declined 1.8 percentage points, from a peak of 72.7 per cent at the end of 2019, to 70.9 per cent during the last quarter of 2021.
This equates to 112,000 fewer 50 to 64 year olds in jobs than during the last three months of 2019.
“In a post-COVID world, it’s a much more participative workforce.” – Donal Laverty
Donal Laverty, Consulting Partner at Baker Tilly Mooney Moore in Northern Ireland, says the current economic climate is forcing people to re-evaluate the affordability of not working.
“People have less disposable income than they would have had in the past and pay conditions and settlements for those in the public sector in particular are not keeping pace with inflation,” he says.
“For that segment of the workforce or those with public sector pensions, they seem to be feeling the squeeze more than others.”
As a result, after coming to the realisation that they could no longer afford to stay out of the workforce, Mr Laverty says some retirees have returned to employment temporarily.
“Life at the moment is still hard even though government support has started to come through in terms of people getting additional money, so I think people are making individual choices in terms of life style choices and decisions on what they can afford or not afford to do,” he says.
“And I think people are also taking part-time work for a certain period of time.”
The Great Unretirement
According to the US Bureau of Labor Statistics, the term ‘unretirement’ is not one that only recently emerged due to the pandemic, rather it first came to being following the recession of 2007 and 2009.
A research paper by the US Bureau of Labor Statistics examines the idea of unretirement, and in 2010 it discussed the three stages of retirement, ‘re-entry’, ‘gradual retirement, and ‘phased retirement’, which all have their own benefits.
This was on par to what is being offered to people looking to re-join the workforce in 2023, including a reduction of hours, the option to work from home, or flexible working arrangements.
Mr Laverty says COVID fundamentally changed the nature of work, in addition to workers’ attitudes.
“There’s this great reset going on,” he says.
“It’s more of a life reappraisal and that’s predominantly by people in their 50’s,they are reappraising what’s important to them.
“Pre-COVID, most people were working in organisations and in roles that were pretty inflexible and rigid and there was limited input to have a say and how their roles could be changed.
“In a post-COVID world, it’s a much more participative workforce, and there’s much more input into what your job looks like, the work you are doing and where you are doing it. – work has suddenly become more participative.”
With people living longer, the proportion of older people in the workforce is set to rise and the challenge for employers is to determine the value proposition of older workers, Mr Laverty says.
“How do you manage to develop people against the backdrop of technological change?” he says.
“I think there’s a huge unease around not only the value proposition, or the offer to older workers around flexibility because that’s what they want for their health and wellbeing, coupled with skills and training.
“They have a life set of skills and they have work experience but the impact of technology on jobs means that older workers need to upskill or reskill more often and therefore employer investment in that area is needed.
“Research shows that employer investment in upskilling has been in the long term decline, and it really needs to reverse. Individual learning for older people, in terms of their capacity and capability, and how they can become technologically efficient is important.”
“Anticipating future talent needs, particularly attracting older workers, is at the epicentre of a future of work strategy” – Donal Laverty
While qualifications, training and support were offered to young people at the start of their careers, more should be offered to older workers in a similar manner.
“As people live longer, and the proportion of older people in the economy and workforce increases, there’s actually less research and less evidence to understand how we attract, manage and develop older people,” Mr Laverty says.
“Employers are not taking advantage of what that demographic can bring. And so therefore, that does not encourage an older demographic and impacts upon confidence.”
But many employers, Mr Laverty says, are still not trying to take advantage of what this demographic can bring.
“Many workplaces do not have cultures that make room for older staff and show they are valued; recruitment drives and the language used in job ads are also largely focused on hiring younger workers, and many employers — despite the pandemic — are not fully flexible in how staff may work,” he says.
Mr Laverty says companies often do not offer support for people — of any age — with health conditions, and workers aged 50 and over are the least likely to receive ‘off the job’ training, impacting their ability to keep up to date with new skills and gain further employment.
“The ability to attract older workers will become a critical success factor for many organisations. this means that employers will need to improve how they attract, manage and develop people as they age,” Mr Laverty says.
“This is particularly the case against a backdrop of technological change, rising skill and labour shortages, and more restrictive immigration policies.”
Mr Laverty says the focus on the ‘future of work‘, which continues to be synonymous with a remote and hybrid workforce, represents a seismic change for many organisations, it is only part of the equation.
“Workforce planning — anticipating future talent needs, particularly attracting older workers— is at the epicentre of a future of work strategy and is a top priority for HR leaders,” he says.