In a paper published today by the International Longevity Centre, Dr Susan Sayce focuses on employment rights and ageing from an employer and human resource perspective, suggesting that any pension reform that targets greater flexibility around employment must communicate clearly with employers and trade unions what they need to do, how they can do it and when.
Dr Sayce’s comment follow the announcement last week of Government plans to increase the retirement age and reform pensions.
“In discussing flexibility, age and employments rights, what becomes apparent is the complexity of this situation for individual employers and the interconnected nature of the decisions to be made,” explained Dr Sayce, a lecturer in human resource management at UEA’s Norwich Business School.
“If the unions are sincere about generating discussions about pension policy, ageing and employment rights they need to ensure that a cross-section of different types of employers are included because there may be issues between blue-collar workers and white-collar workers, people in different industries and different types of employments to be considered, as well as how these decisions overlap with other social and legal policies in promoting flexible employment.
“There is a lack of information from individual employers about their views on flexibility in employment rights regarding extending the age of workers. Without that data it is very difficult to make informed policy decisions. More research is needed on what employers consider are the benefits and disadvantages of changing employment rights.”
According to figures from the Department for Work and Pensions (DWP) there will be 50% more pensioners by 2050. They estimate that about 7 million people are not saving enough for the pension they claim to want or expect.
These future pensioners will either have to accept their pension provision and enter poverty or work as long as they can to offset declining levels of pension provisions, as in 2050 it is predicted that there will only be one working age person for every pensioner compared to around four working age people today.
“A key consideration is that the move towards flexibility in employment age will have to be linked to the age that social welfare in general, and specifically pension benefit, kicks in as people approaching retirement age will need more clarity about what they can expect in retirement from their work contribution, savings and investments.”
From an employer and HR perspective education about health, training and retraining will become more important as people become unable to maintain the pace of work and this will include re-evaluating assumptions about part-time work being low-paid, low skilled work as more people move to work two instead of five days a week.
Dr Sayce added that this will require major adjustments by both employers and unions of how they view flexible and part-time work, if this is to become a reality.
“Employers will have to put more effort into the management of their workforce because they are going to be faced with people wanting to work longer. For many HR managers the issue in extending employment rights and ageing is retention. Are they retaining the right staff? Strategically companies used to use retirement, as a way to reduce employee numbers, so some companies see retirement as a way to ease people out of the organisation. But there can be tensions between who the organisation perceive as someone they are happy to see go in productive terms and the employee who financially might be desperate to stay on.What happens in this context and what strategy will employers be able to use in the future to let go employees they do not wish to keep subsequent to them reaching 65?”
Dr Sayce cites the examples of Australia, where there is no statutory retirement age, and of school bus drivers in America who often only work four hours a day because they need more income, something which suits people who may already have retired from their main career – one of these workers is now 83.
However, she adds that the extension of the working age only profits people if they are economically active, but many people are too ill, too sick to work while longevity is increasing.
“This is an area where trade unions need to get involved to represent employees for whom there is little choice in flexible employment or are doing challenging physical work unsuited to an ageing workforce,” she said. “There is a role for trade unions in helping to construct policy and see how it is implemented across all industries and sectors.
“In respect of older age employment there will need to be joined up thinking by policy-makers, trade unions and employers about abolishing statutory ages of employment as one size does not fit all. For employers, the business focus on extending retirement should be achieving the right mix of people in the organisation and that will also require a shift in public attitudes to age and employment.
“The current trend in the media about presenting yourself as a younger person is not helpful for promoting measured discussions about getting older and retiring and valuing the contribution that older more experienced employees can bring to an organisation.”
The paper follows an expert seminar earlier this year organised by Dr Sayce and independent financial advisers Lucas Fettes to discuss the future direction in pension provision. Speakers included the DWP’s David Haigh, investment expert and economist Ros Altmann, Nigel Stanley, communication director for the TUC, Dr Larry Beeferman of Harvard University and Debbie Harrison a fellow of City University. They assessed the implications of changes in pensions and employment to an audience of professional HR and finance employees.