Retirement as we know it could soon become a thing of the past. Historically low birth rates and high life expectancy means the working population is ageing fast. The state pension age keeps getting nudged up by the government and eventually people are going to have more flexibility to choose how and when they retire.
Inevitably, more employees will work for longer. In fact, our Global Benefits Attitudes Survey (pdf) reported that nearly half of workers have increased the age at which they plan to retire over the last three years and nearly a quarter of workers (23%) expect that they will have to work to age 70 or above. With this in mind, businesses need to adapt their benefits programmes now to take into account an older workforce.
The UK Commission for Employment and Skills projects that in the next 10 years there will be 13.5m job vacancies (pdf). However, there will only be seven million school and college leavers. Employers will need to place more emphasis on looking after older workers in order to ensure they have the skills and experience they need for the future, to plug the skills gap and continue to make a meaningful contribution to the business. According to the Government Actuary's Department, by 2020, more than a third (36%) of the UK's working population will be over 50. Before long it will be the norm to have three generations working together.
In many industries, older workers will be encouraged to stay on, especially in research fields where their extensive experience and knowledge is invaluable. In these industries in particular, it will be vital for businesses to take a proactive and preventative approach to keeping their workforce healthy and happy.
While many businesses have started to take steps to offer health and wellbeing programmes, they need to look more closely at what the ageing workforce is likely to benefit from in the coming years to prevent health issues arising unnecessarily. For example, wellness initiatives should promote better sleep, good nutrition, and a work life balance such as part-time working options, to keep employees healthy, happy and productive. These initiatives will need to appeal to young workers too, prudent businesses will make sure there is something for everyone in their benefits packages.
An organisation's business strategy needs to address the challenge of keeping benefits cost effective, as well as in line with current legislative requirements and sustainable in the long term. To avoid a chronic mismatch between an organisation's benefits and the needs of older workers, it also has to meet the needs of a multi-generational workforce.
A "pick and mix" approach rather than a one-size-fits-all approach recognises the differing needs of a graduate to a long-serving employee. For example, our survey showed that older workers are more likely to admit they are stressed at work and to accept professional help, whereas younger workers are more likely to need line manager intervention.
An organisation's health and wellbeing provision can cater for employees of all ages. These could range from basic to full medical cover, work-related stress support such as counselling, and support for returning to work after an illness. Businesses should also consider offering disability benefits to give employees reassurance that they will be looked after should they encounter a disability.
Many employers are likely to feel a duty to extend their benefits beyond retirement age, despite no longer being legally required to do so. However, businesses can ensure they offer a package that falls within a manageable budget by setting a maximum period of say five years from the point the employee starts claiming.
While there is no law that states businesses must offer health and wellbeing benefits for all ages, employers are gradually realising it's in their best interests to cater for the over-65s if they want to retain precious talent for the future. The key is to offer a variety of benefits that fit in with the business' overall strategy and budget, and to communicate these benefits to workers so they can choose the right ones for them. The preparation and planning for an ageing workforce needs to start now.
Rebekah Haymes is a senior consultant at Towers Watson
The social impact hub is funded by Anglo American. All content is editorially independent except for pieces labelled advertisement feature. Find out more here.
Join the community of sustainability professionals and experts. Become a GSB member to get more stories like this direct to your inbox
