personal finance

Tempting back older workers means ditching business as usual

“Your country needs you” pleads UK chancellor Jeremy Hunt to the over-50s, echoing the concerns of Jay Powell at the Federal Reserve about the “excess retirements” which have drained America of 2mn workers. Policymakers remain perplexed by the Great Resignation, in countries facing labour shortages. But it’s not the workers they should appeal to: it’s the employers.

Before Christmas, I predicted a “Great Unretirement”, once the novelty of gardening wears off and savings wear thin. But I’ve had to change my mind after provoking a huge response from FT readers, many explaining why they’ve retired and will never return. Some cashed in corporate pensions after transfer values rose in the pandemic. A few were unwell. But what took me by surprise was the vehement dislike expressed for many jobs. “If you could press a button and delete everything I’d ever done in every corporate job I’ve had”, wrote one man, “I would feel nothing at all”. 

Having enjoyed most of my jobs, I was dismayed by the outpouring of disillusionment. Readers with years of hard graft in all sorts of industries felt downtrodden by bureaucracy, meaningless training and frothy “initiatives” imposed by managers who moved on, in companies which showed no loyalty after years of service. “Even though I’m writing programming code better than any time in my life”, wrote one, “if I returned to IT I’d be eaten alive, not by the youngsters (they’re a joy), but by aggressively competitive middle managers, who are driven to distraction to find productivity gains”. 

Are these the wails of curmudgeons failing to move with the times? That’s certainly how senior workers are often portrayed. Perhaps we do become less tolerant as we age, with our irritating comments about how “that didn’t work last time we tried it”. But maybe the really out-of-date people are managers who think 50 is “old” when it’s barely more than halfway through some lives.

The stereotypes are strikingly consistent around the world. A 2021 survey by Generation, a global non-profit, found employers in Brazil, India, Italy, Singapore, Spain, UK and the US saying they prefer staff under 45, who are a “better fit” with their company culture. These employers agreed that older workers performed just as well as younger ones; they just don’t want to hire them. This chimes with US research suggesting that Covid gave businesses an excuse to push out older workers — some permanently. Of the 3.8mn Americans between 55 and 74 who lost their jobs after March 2020, around 400,000 remained unemployed a year later, according to the US Schwartz Center.

I suspect that people who were disillusioned by the grind — and well enough off financially to say goodbye — could return. But others lost a job and now can’t get back. While companies focus on race and gender discrimination, and the needs of Gen Z, workplace age discrimination seems to be increasing. Seventy-eight per cent of older American workers claimed to have seen or experienced it in 2020, the highest level since 2003. In the UK, the Chartered Management Institute has found that only 4 in 10 managers are open to employing anyone aged between 50 and 64 to a large extent.

It would be wrong to claim that every employer is some blinkered millennial who resents grey-haired Dave in accounts. And older workers can be expensive. Replacing a 55-year-old with a qualified 25-year-old reduces the wage bill and the pension liability. Several readers with index-linked pensions from big UK employers wrote to say that their early retirement had been welcomed by employers.

What to do? Every ageing nation needs to keep people working longer. Age stereotypes clearly need to be challenged. But perhaps we also need to update the conventional career timetable in our heads: expecting to get on the fast track around 30, just when we might want to start a family, and mentally starting to exit after 50. We are also locked into the idea that age equals seniority and higher pay. If we work to 70, we may not be able to demand ever-higher wages or hog the corner office. We should seize opportunities to mentor, and be mentored by, young people.

Working for different organisations over the years, I’ve been in a number of painful conversations about what to do about poor old Buggins when he reaches pension age. If he stays, he might block a job for a younger person. If he goes, he will take institutional memory and expertise. I’ve witnessed brutal endings for people who’ve given their heart and soul to places which don’t give a damn. Others have kept on adding value into their 70s, on more flexible contracts.

Those contracts are challenging to negotiate. The idea of a “mid-life MOT” is potentially a powerful way to help employers talk to staff openly and positively about their future plans, without legal liability.

We may all need a chance to stop and re-evaluate, but not forever locking ourselves out of work. In the US, an organisation called Encore offers retired professionals a chance to work in non-profit. In Germany, older people can take tax-free part-time “mini-jobs”, where employers pay lower national insurance.

Work shouldn’t feel like an eternal grind but it too often does. And to me, that should make employers sit up.

The writer is author of ‘Extra Time: Ten Lessons for Living Longer Better’


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