Companies' Attitudes to Older Workers Must Change, say Hewitt
31 May 2005 - LONDON -- Hewitt Associates, a global human resources services firm, has called on companies to rethink urgently their approach to older workers.
At the Xfi Pensions Conference at Exeter University, Hewitt pension consultant, David Freedman, presented recent qualitative Hewitt research on the way companies plan to respond to the changing demographic profile, particularly the dramatic ageing of the working population due to come in the near future.
The research surveyed human resource directors from 30 large European multi-national companies across five countries. It revealed that a majority of respondents view older workers (with 'older' perceived as age 50 plus) as barriers to promotion opportunities for the young and that part of the HR function is actively to remove older workers.
During the next 20 years in the UK there will be two million more people over the age of 50 and one million fewer under 50. The working population of Europe is declining for the first time since the Black Death(1) and so Hewitt is calling for a radical re-think by companies to their approaches to reward, organisation and development.
Commenting on the research findings, David Freedman said:
"We were surprised by some of the attitudes towards older people, who were often viewed as part of the problem rather than part of the solution to the impending shortage of talent and skilled personnel. The inevitabilities of an ageing population just did not seem to be recognised by HR." This call for a change in attitude towards older workers has also been made by Adair Turner, head of the government's Pension Commission, who has highlighted the need to address retirement age and is likely to make recommendations in his report, due later this year. The older workers debate will remain at the top of the political agenda as Work and Pensions Secretary, David Blunkett, also considers radical pension and retirement reform.
David Freedman continued:
"We had hoped that HR departments would be alert to the issue of an ageing population and would be encouraging their companies to consider solutions that supported older workers. We found it was to the contrary though - the approaches and attitudes were still firmly entrenched in the past, when removing older people was the accepted way to reduce workforce size and to create space for new young rising stars."
At the IBIS conference for global pensions and benefit managers in Budapest last week, Kevin Wesbroom, senior pension strategy consultant at Hewitt, also presented a number of challenges for HR leaders to consider.
Kevin Wesbroom said:
"The attitude to older workers today could be compared to the attitude to women workers thirty years ago, but ageism should be no more acceptable in the workplace than sexism. Benefit plans and reward practices must be reviewed to identify any discrimination against an ageing workforce. Accepting diversity of age is just one aspect of dealing with an increasingly diverse workforce - one size fits all employment practices are obsolete.
"Flexibility must be embraced - retirement should be a transition rather than an overnight event. Employers have a lot to gain if they develop benefit plans that enable older workers to remain in the workplace for longer while partially drawing pension benefits. We would advocate developing 'Personal Employment Propositions' - packages tailored for individual employees to address these issues. It is vital that the traditional view of retirement evolves sooner rather than later."
1 The Economist (print edition) - Forever young, by Frances Cairncross - March 25th 2004
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