Up until the middle of the last century, when a worker retired, the expectation was that they would not live for long afterwards.
Sadly, this situation is still true in a minority of cases, although most have much longer to enjoy their retirement than in the past.
In 2011, people born in 1946 will be 65 years old. They are the oldest of a cohort called the baby boomers and many of them will be in the process of retiring. Considering that the average life expectancy in the UK is now nearly 80, we can anticipate that they will be around for another decade and a half or so.
But one of the country’s biggest societal challenges at the moment is how to fund pensions, healthcare and social security for a growing number of people over the age of 60 or 65 relative to the size of the working population.
One of the Government’s answers to this conundrum has been to phase out the Default Retirement Age, giving older workers the option of working longer. This means that employers will no longer have the legal right to terminate their employment.
Such a situation relieves some of the pressure on the state and is also of economic benefit to the employees concerned as they can keep on earning an income at the same time as having their employer contribute to their pension - if they have one. And by not drawing their state pension immediately, it will grow in value too.
But employers may need to make adjustments to deal with this new world order. For example, enabling older employees to work from both the home and office in a more flexible way should help to reduce the physical and mental toll of a daily commute.
In return, organisations can benefit from retaining experienced workers’ skills, particularly in areas such as maths and engineering, which appear to be less appealing to the younger generation. Some international companies, for example, have struggled to find graduates in certain disciplines to meet their exacting standards.
But this situation raises questions about what the country can do to tackle potential skill shortages when the baby boomers finally do retire?
One answer is to invest more heavily in things like apprentice schemes and focus on teaching key numeracy-based subjects. Ensuring the targeted migration of workers into the UK economy and/or the movement of key jobs out of the UK and into other economies are also possibilities. Some of these options may be politically more acceptable than others, however.
What organisations can do to try and tackle skills shortages themselves, meanwhile, is ensure that older workers transfer their knowledge to younger colleagues before they retire. By encouraging, facilitating and perhaps even formalising such mentoring relationships, employers will not only benefit themselves, but also the wider labour market and society as a whole.
But this is not to forget that older workers can also learn a lot from their younger counterparts. The best mentoring relationships allow for reciprocal learning. Because individuals are likely to come from differing backgrounds and have life experiences, such relationships provide an excellent opportunity to discuss and understand different people’s points of view.
However, while it is all very well to talk about retaining older employees, providing them with more flexibility in their work styles and appointing them as mentors to colleagues, in reality, such a scenario can cost employers money as mature workers may not be as capable of such intense levels of productivity as their younger peers.
As a result, organisations might need to take a creative approach to helping more mature workers wind down. For example, instead of having people work five days a week non-stop, it may make sense to give them half a day off per week for a month to do voluntary work in the community.
The idea is to gradually introduce change into their day job. This is not something that can or should be done overnight. But if you support workers while they make the transition, they will not only get used to it but enjoy it. And organisations will benefit because they retain their workers’ expertise and extend their working life without making unrealistic demands on them productivity-wise.
Are we ready for an ageing population? Not yet. But by starting to prepare now, employers will be in a good position to ensure that their business remains sustainable in the months and years ahead.
Simon North is founder of career consultancy, Position Ignition.