What does the UK's ageing workforce mean for employers?

UK employers today are having to adapt to many challenges, from the effects of the COVID-19 pandemic to the cost of living crisis. But one challenge which they might overlook is the ageing workforce.

Why exactly is the UK workforce getting older?

Firstly, because the population as a whole is ageing. People are living longer and having fewer children, leading to a demographic shift: in 2014, the UK’s median age passed 40 for the first time ever.

Secondly, people are working for longer. In 2011 the law was changed so that UK employers couldn’t force workers to retire at 65, and we’re now seeing more and more people work beyond that age. As the ONS observed in 2019, “employment of people aged over 50 (and particularly those aged over 65) has outpaced the growth of any other age group.”

So what does an ageing workforce mean for employers? What specific challenges does it present, and how can you mitigate them?

Different health needs

You might expect higher levels of sick leave in an ageing workforce. But interestingly, according to the CIPD, levels among older workers are actually lower than among their younger colleagues. However, when they do take time off for health reasons, “the length of absence is likely to be longer.”

Some tasks may also become more difficult with age. As the UK government’s 2016 Future of an Ageing Population report notes, though, “technological improvements mean there are few jobs that the average 70-year-old physically cannot do.” Instead, the real barrier is “poor workplace design or management practices.”

Every employer should be considering whether their workplace is inclusive. Is the space accessible for people with restricted mobility? Do family leave policies account for different genders and sexualities? Are managers properly trained to support neurodivergent team members? Age is a protected characteristic under the Equality Act 2010, so employers have a legal obligation to make reasonable adjustments for the needs of older employees.

Employment of people aged over 50 has outpaced the growth of any other age group.

In terms of policies, robust return-to-work support is key to helping employees of any age with extended health-related absences. Flexible working policies can be incredibly helpful for the long-term management of health conditions and caring responsibilities.

An extra step employers should consider is providing health and wellbeing support, such as YuLife’s wellbeing challenges and YuCoin rewards to encourage a healthy lifestyle. Cloud International found that a year after downloading the YuLife app, 66% of employees still engaged with it monthly, and they walked 2.3 times the UK daily average steps.

Of course, lifestyle changes alone aren’t enough to ensure long-term health, and employee benefits such as 24/7 virtual GP access and EAP mental health support can act as a valuable attraction and attrition benefit for an experienced workforce.

The skills gap

The question is, is your business trying to attract an older demographic? When considering an ageing workforce, one common concern is whether older employees will have the necessary skills to face the challenges of the modern business environment.

Gen Z is currently the fastest-growing generational segment of the workforce, and the first cohort which has grown up almost entirely as digital natives. Though their level of digital fluency isn’t necessary for most roles, older employees may need to actively develop their comfort with new technologies in order to adapt to a changing workplace.

However, the UK government’s 2016 Future of an Ageing Population report notes that “40% of 55 to 64-year-olds have undertaken no formal training or education since leaving school [and] older people report that they are less likely both to seek work-related training, and to be offered it.”

Older people report that they are less likely both to seek work-related training, and to be offered it.

One way to address this challenge is to provide training – and importantly, to ensure your employees know it’s on offer. In workplaces which use YuLife, 96% of employees value it as their #1 benefit, and as the app provides a one-stop-shop for all your employee benefits, it’s a great place to include the training and skills-boosting initiatives on offer.

Another approach is to highlight the complementary skill sets of different cohorts, encouraging an exchange of information. As Deloitte notes, many Gen Z employees feel anxious about their communication abilities and lack of tacit knowledge – especially if they’ve entered the workforce during a period of all-remote working.

This approach shows that you value institutional knowledge and experience. In her conversation with YuLife, Davina McCall explained that she only felt like she became ‘good at’ her job in her mid-forties. “I could never have said that when I was in my thirties [...] but now, I've got to mid-fifties and I'm like, "I know what I'm doing." Now, it would be sad if I left my job because I feel like I'm just getting really good at it.”

Menopause support

Menopause should be on every employer’s radar, seeing as it’s likely to affect around half of their employees. But with an ageing workforce, it’s even more important.

Menopause usually starts between 45 and 55, and can last several years. In Vodafone Menopause Research from Opinium, 62% of respondents said the symptoms impacted them at work. In fact, 9% reported that they’d reduced their hours as a result, and the same percentage said they’d considered leaving their jobs.

In other words, by not putting adequate support in place, businesses are losing women at the peak of their careers. But just a few changes can have a profound impact on the people currently struggling and perhaps considering leaving their jobs.

The first step is information – for everyone. Anyone who might experience menopause symptoms could benefit from virtual GP access, mental health support and use of a menopause-specific app like Stella (all available through YuLife). And everyone else will benefit from understanding what their team members might experience, and what adjustments can help in the workplace.

The biggest benefit for employers here is preventing skills loss. But providing this support and information is likely to also lead to an increase in productivity for people experiencing menopause. And as Davina McCall noted in conversation with YuLife, “this offering would make your colleagues in your business love you so much.”

Financial concerns

One of the reasons people are working later in life is because, quite simply, they can’t afford to retire yet. ONS data from 2015 identified “to pay for essential items” as the second most common reason for working past state pension age.

As an employer, there are several things you can do to improve financial health in an ageing workforce. Firstly, you can provide access to financial advice, which YuLife offers through the 24/7 employee assistance programme (EAP) and will-writing service. This kind of support can help ease financial stress, thereby improving performance and productivity.

Secondly, you can provide benefits which give meaningful financial assistance when employees need it. Group Income Protection, Group Critical Illness and Group Life Insurance are some of the most impactful benefits you can offer, and show that you take your employees’ financial and health concerns seriously.

Thirdly, you can overhaul your policies. A good salary may be important for attracting new talent, but do you offer the same incentives when promoting internally? Some older people with years of service are shocked to find that they’re paid less than their more recently hired counterparts, which can lead to dissatisfaction, lower productivity and even leaving the organisation. Pay reviews across age bands for the same roles can help prevent this.

Losing older employees with long tenure can cost you much more than simply increasing their salary. Mercer suggests that, despite stereotypes, workplace productivity doesn’t decline with age overall. On top of that, longer tenure at an organisation, regardless of age, has positive outcomes: “higher levels of firm-specific experience increase work unit performance. [...] Age, and the general work experience it brings, did not affect unit performance after accounting for tenure.”

The value of insurance as an employee benefit

Of course, none of this is a UK-only issue. The WHO suggests that by 2050 22% of the world’s population will be over 60. The UN estimates that up to 1 in 4 people in Europe and Northern America could be aged 65 or over by the same year. In today’s global workplace, all employers need to consider this trend, and prepare to face the challenges and opportunities of an ageing workforce.

While lifespan is increasing, healthy lifespan isn’t quite keeping pace. So what employee benefits matter most to your diverse workforce? 

Group Insurance is an increasingly popular benefit for all demographics, but with potentially more dependents and more assets, the financial safeguard of group cover can be the most valuable benefit you could provide – whatever your peoples’ ages.