2005 – Dealing with enforced retirement
A UK law against
age discrimination came one step nearer last week
when the Government published draft regulations
due to be enacted in October 2006.
The regulations, that continue
to allow employers to retire people who reach
the age of 65, introduce a formal process that
employers will need to follow when retiring an
At the same time employers will
need to consider seriously any request by employees
to work flexibly after they have reached the age
Some campaigning groups are disappointed
that a formal retirement age has been retained.
Moreover, a stipulation that employers will have
to provide the same insured benefits to any employee
at any age may act as a disincentive to employers
if it means that they face larger insurance premiums
for older employees.
The Employers Forum on Age has
raised this issue as an area of concern. A far
greater concern, however, must be that employment
opportunities improve for those in their fifties,
many of whom in recent years have been picked
off in redundancy programmes and by pressure for
Overall the regulations, that
insist that employees should not be regarded as
too young or too old to apply for a job, training
or considered for promotion, should concentrate
the minds of employers on an area of unfair discrimination
that has been ignored or neglected in the past.
It may remain difficult to prove
age discrimination, however, in cases where subtle
pressure is applied by employers. Moving an unfavoured
individual sideways or removing responsibilities,
common practices that equate to demotion, are
unlikely to disappear.
For many senior white-collar
managers who have reached the top job in their
function, the issue they often face is that there
is nowhere else to go. So the option of generous
retirement terms or voluntary redundancy package
can prove irresistible.
The difficulty then arises when
they seek another job and find that full time
job opportunities are almost non-existent. The
lucky ones may find some consultancy work, a non-executive
directorship or possibly interim work.
But those less fortunate will
find themselves condemned to long years of retirement
when they still have much to give in skills and
experience. Too much older talent has been lost
in the past 10 to 20 years as companies become
attracted increasingly to younger managers or
to leaner management arrangements that have left
too few jobs at the top.
It is difficult to quantify the
economic impact to the country created by the
early retirement of a substantial proportion of
the over 50s. A report by the Office for National
Statistics* has highlighted a significant under-representation
of the over fifties in the labour market.
The report found that the number
of economically inactive people aged over 50 in
the UK had risen during the previous 10 years
by about 413,000 to 12m in 2004. But because of
a proportionately larger increase in the total
population of people over 50 in that period, the
percentage of inactive people in this age group
had fallen slightly to just under 62 per cent.
The report found that people
with degrees were more likely to retain work in
their fifties than those without qualifications.
But it also found that people in professional
and managerial jobs were more likely than those
in lower-skilled groups to have taken early retirement.
The problem with opting for early
retirement is that many of those who do so believe
quite justifiably that they still have much to
give. The answer for these people, says the report
could be to find flexible kinds of employment
or “bridge jobs” that can fill the
gap between premature and permanent retirement.
The report revealed a higher
percentage of employment over the age of 65 among
smaller employers and people working on their
own account. This suggests that self-employment
could help to provide the transition from a full-time
permanent job to work that will prove useful,
flexible and rewarding in to old age.
What the report cannot reveal
is levels of under-employment among the over 50s
or, indeed, what might be considered under employment.
There may be many former senior executives who
would welcome a break from long hours at the office
and the demands of travelling. But few would like
that break to be so sharply defined that they
are left with nothing to do.
A few days ago I had a letter
from a daughter worried about the impact on her
father of losing a senior job where he had been
working overseas. At the age of 52, she said,
he was having little success applying for other
jobs yet still had a large mortgage to support.
My advice, based on speaking
with others in similar positions, was to stop
applying for jobs and to move in to self-employment.
For many former executives this option is often
interpreted as interim management but this kind
of work is not suitable for all, nor is it as
widespread as some in the interim management industry
would like to suggest.
I also advised that, since most
of his children had left home or were of working
age, he might consider moving from his five-bedroomed
house to somewhere smaller in order to get rid
of the mortgage and create some kind of financial
buffer. The daughter agreed but said her mother
would fight such a move since it would send out
signals about a loss of status.
This suggests that even now,
after years of white collar clear-outs, some people
are still failing to understand the realities
facing many who reach their fifties in managerial
jobs. A sensible approach, even where a job may
seem secure, is to draw up an escape plan that
includes provisions for future underemployment.
If people give themselves this
option they are less likely to be backed in to
a corner where they must either leave or face
a future in unfulfilling full-time work, counting
the days to retirement.
Some may find a more secure future
in the voluntary sector where ageism is far less
prevalent. Others may choose self-employment although
this will involve the acquisition of new skills
such as marketing, negotiation, selling and pricing.
In 2004 some 20m people in the
UK – a third of the population - were aged
50 and over. By 2024, according to the ONS paper,
it is estimated that the over-50 population will
have increased by about 6m, representing 40 per
cent of the total population. At the same time
the number of working-age people below 50 will
have dropped and, if the trend among young people
to stay longer in full-time education continues,
the economic reliance on the over 50s is going
By that time I fully expect that
our concept of retirement will have changed beyond
recognition. In fact the only remaining prospect
for retirement may be the word itself.
*The labour market participation of
older people, by Elizabeth Whiting, Office For National
Statistics, Labour Markets Trends, July 2005.