New research from Group Risk Development (GRiD), the trade body for the group risk industry, has found that one third (33%) of employers have seen the average age of their workforce increase over the last year. This follows the abolition of the Default Retirement Age (DRA) from 6th April 2011.
When probed one in four employers (25%) said that DRA removal has enabled them to retain knowledge and experience within their business and a further 17% felt it has increased the diversity in their workplace. This is additional proof of a positive response from employers to the UK’s newly “ageless” workforce.
Interestingly, three in five (59%) felt that the removal of the DRA meant they were more likely to recruit employees aged 50 and over. One in four (23%) of the employers questioned felt that older workers were a store of knowledge, whilst 22% said they were more likely to be loyal to the company. A further 14% said that older employees had the ability to motivate other staff.
However, the survey suggests employing a more age diverse workforce is not without issues — particularly with regards to absence management. Over a quarter (27%) have seen an increase in absence rates or age related health conditions (such as diabetes and arthritis) since the removal of the DRA, highlighting the potential risks of having an older workforce.
“Older employees can bring a wealth of experience, confidence and mentoring skills to a business so it’s great to see the average age of the workforce increasing,” Katharine Moxham, spokesperson for GRiD, commented.
“However, as our survey demonstrates, an increase in absence rates and age related health conditions can present a challenge to employers which can then have a knock-on effect to benefit provision.
“Through the provision of insured protection products (such as Group Life Assurance, Group Income Protection and Group Critical Illness), employers play a vital role in ensuring that staff and their families are adequately protected from the financial devastation that death or disability can bring.
“These products also include additional support services which can be extremely effective in keeping people in the workplace, giving them the support they need to makes their lives better and achieving a sustainable return to work for those who have had to take time off.
“For employers who choose to continue these benefits to their staff beyond age 65, group risk providers can be flexible in accommodating a range of upper ages or other solutions — such as a limited payment period under a group income protection policy. However, the provision of insured protection benefits can legally cease at age 65 (or State Pension Age, as it increases) so, for those employers struggling with the challenge of managing the health and attendance of an older workforce, this exemption can be useful.
“Employers therefore have choice in their approach, ensuring that group risk protection benefits remain affordable and available to the majority of their employees.”
Sadly though, 49% of respondents were still unaware of the exemption which can help keep overall protection costs down and give businesses more flexibility to retain these socially useful benefits.
By Daniel Hunter