New legislation preventing organisations from making employment decisions on the basis of age aims to ease the pensions crisis and problems associated with an ageing population; but are older workers really the golden ticket the government claims? Sarah Fletcher asked HR Zone members whether extending the employment lifespan offers real business benefits or just increases operational problems for HR.

HR directors in large European firms see older employees as expensive, a poor fit with changing business needs and a waste of training resources, Hewitt Associates reports (Stereotypes under scrutiny, Financial Times, July 2005). If so, the age legislation that came into force on October 1 will cause real problems for business – and if older workers aren’t in fact costly and slow, what will such attitudes mean for the success of this law and the approach of employers to older staff?

It’s extremely difficult to prove that employees succeed or fail due to their age. Certainly health problems are more typical among older staff, but in terms of productivity and commitment there is little solid evidence to argue that any particular age group produces consistently better employees.

Recruitment – does age discrimination work?
However, making employment decisions based on assumptions about age has significant business benefits in certain industries, argues Karen Bailey, learning and development manager at Coors Brewers. “Having worked in customer service industries, in particular call centres, we targeted older workers for [their] greater empathy with our customers, a better work ethic and more patience when dealing with difficult or distressed customers,” she says.

As this recruitment practice has been outlawed under the new legislation, will business suffer? Probably not. The TUC argues that age is irrelevant if the candidate has the qualities the employer seeks – by targeting older employees at the expense of younger candidates, the business removes the possibility of hiring younger staff with the same abilities and the potential for a longer lifespan with the organisation. Perhaps Sainsbury’s should remember this as it launches a drive to recruit 10,000 employees over the age of 50.

This view often influences the recruitment process: “When recruiting for leadership roles you often hear the word ‘potential’ used when talking about desirable qualities in candidates. There is a view that as candidates get older they may have reached the limit of their potential and may not much more room to grow into bigger role in the future,” says Sam Newell, director of Mindpool Consulting.

“Of course, This can of course work both ways, with younger candidates often having to prove they are ‘big enough’ or possessing the gravitas needed to fill a senior role,” he adds. “Older candidates applying for senior positions often face less resistance, as [applying for a high level job] is expected. Where roles are more junior, hiring managers will often assume that an older candidate applying for such a role must lack drive, ambition or ability.”

Keeping key skills – poor business strategy?
Newell disagrees with the fairly standard claim that older employees are automatically more loyal and conscientious as such qualities don’t suddenly develop when the worker reaches their 40th birthday: “A great candidate or employee at [the age of] 30 does not become any less of a great candidate or a great employee at 40 or 50; their age changes but their ability to get the job done certainly doesn’t,” he says.

If older staff are unwilling to keep up to date with business practices, they were probably like this in their youth as well: “Their skills and experience grows and carries on growing, and they continue to learn,” he adds.

Supporters of older employees often claim they are more experienced and, as Newell says, can “add credibility to a new or inexperienced team”; but experience is really just a strong grasp of what the job requires and this can be taught if businesses are willing to invest in staff training programmes. HR directors are responsible for the weak skills base of their workforce, argues interim manager Iain Young:

“As many HR directors fail to properly train their staff and most organisations fail to properly evaluate training undertaken or the training needs of the workforce, I find difficulty in finding justification for the statement that older workers are a poor return on investment in training.”

As well trained staff are crucial to the organisation’s operational success, forcing valued employees to retire is a poor strategy. Young found his organisation addressed key skills shortages by providing these workers with the opportunity to extend their contract past their retirement date. Many of these employees continued working for the company for three or four years after retirement and boosted productivity levels for the organisation.

How should business adjust?
Many employers believe older workers are less willing to adapt to changing business practices, but Young argues that it’s the organisation’s attitude rather than the staff themselves that are at fault: “Young people can be just as resistant to change as an older employee. I think a lot of the time the failure is not the employee’s but the business’s, in not taking the employee with them in a business change.”

HR Zone members are not confident that business will adjust smoothly to the new legislation. “Age discrimination is so prevalent in British business [that] many businesses are going to struggle to adapt current thinking and processes,” says Newell. However, the way organisations manage the change will reveal much about the value they place on their staff, argues Richard Ciechan, director of In My Prime:

“The legislation should be no big deal to those organisations that value their workforce… Enlightened businesses will see this as an opportunity to review their HR procedures and human capital requirements and start to implement new ways of working in order to benefit from the requirements of the new laws.” Of course, this is easier said than done but the government’s new age laws will mean that rather than being an option this is now a business must.

Older workers – an unhealthy financial drain?
Although there is little evidence to support the claim that a certain age group is more productive or loyal to the employer, the health problems more commonly faced by older workers are, in business terms, a significant issue. A survey from insurers UnumProvident reported 43 per cent of employees agreed they would have to take more time off work due to ill health as they became older. The costs of covering for the absent employee are a financial burden which will worsen now that the compulsory retirement age has been removed.

This means the employer must offer retirement according to the individual’s health needs and think carefully about the benefits package it offers. “Flexible benefits selection is a tricky one for us at the moment as older workers tend to select health care which costs us more,” comments Bailey. Making the choice between a cost effective strategy and one that interests staff is difficult when the workforce contains a broad age range:

“Whereas older workers will continue to want to work they may not be motivated by the same factors as younger employees. The traditional carrots of salary rises and promotion are unlikely to be their first focus. This will have to be understood by employers who may need to look to establishing new practices such as flexible working packages and interim employment contracts as replacements. Furthermore, some older workers may not be as physically and mentally mobile and adaptable as younger workers might be.”

Is older better?
An experienced workforce provides real business benefits, argues the founder of Business Improvement Association John Shenton. This gives older employees with a long career in the industry an advantage over their younger colleagues; but the bias of business towards young staff means that they are given promotions but lack the experience to do the job properly:

“Experience in business can make a significant difference. Not making expensive mistakes can add value to a business especially as most business has to be customer focussed.
One company I am aware of has an average age for management of 24, but the real decisions are being taken by HR. Much of the [interaction] between young mangers and older staff is strained and the end result is very high attrition. None of this is good for the business. A well balanced workforce would make a significant difference to this situation.”