David Sinclair: Employers need to consider pick and mix reward strategies

David Sinclair

Unless employers reconsider their workforce planning in the light of population ageing, they will face substantial personnel and skills shortages in future years. There are 9.2 million workers in the UK over the age of 50, many of whom will leave work permanently over the next 15 years, taking their acquired skills and experiences with them.

In the agriculture and real estate sectors over 40% of workers are aged over 50 but the overall number of people over 50 is small compared with other sectors, according to the Chartered Institute of Personnel and Development and International Longevity Centre UKā€™s Avoiding the demographic crunch: labour supply and the ageing workforce report, June 2015. There are over 1.5m workers over the age of 50 in health and social work and more than 1.2m over 50 in education and retail. There are also more than 1m in manufacturing and over 700,000 in the construction industry.

Yet many industries have a poor record on retaining older workers, seeing a large drop-off in the number of workers between the ages of 45-49 and 60-64. In particular, finance, public administration and ICT all see a drop of greater than 60% between the number of workers they employ in their late 40s and in their late 60s.

If employers are to deliver a skilled workforce in an ageing society, they must do more to ensure that the retention of older workers is at the heart of any HR strategy. Employers need to start planning for the long term, ensure that recruitment is inclusive and not discriminatory, and better support line managers to deal with an ageing workforce.

Many older people will not stay in the workforce forĀ financial rewardalone. Employers must look to reward that empowers and engages the older worker rather than a strategy thatĀ relies primarily on financial reward. Flexible working is likely to need be a key part of the offer for older workers. And employers will have to look at how reward can ensure that older workers are not forced out of work due to a need to care for a combination ofĀ parents and grandchildren.

If we want a healthy older workforce, reward must better supportĀ employee health and wellbeing.

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Older workers are likely to want different reward to younger colleagues. In an ageing society where employers may be supporting people aged 16 and aged 70, the reward package of the future might need to be more of a pick-and-mix offer than a one size fits all.

David Sinclair is director at the International Longevity Centre UK (ILC-UK)