The abolition of the default retirement age has meant many organisations have opted to merely ‘do away’ with having a retirement age, choosing not to pursue the options for a employer justified retirement age (EJRA).
No doubt part of the success of our own organisation, the University of Cambridge, has been embedded in maintaining a balanced workforce, reflecting all ages; a vital ingredient in ensuring retention of knowledge and excellence. Whilst the removal of a retirement age provides clarity for all staff and compliance with age discrimination legislation, the implications for the University are extensive. To determine the University's future policy, a consultation exercise is currently underway, and perhaps unlike many other organisations, considerable thought has been given to the option of maintaining a retirement age and the resulting significant impact on all our HR practices.
The abolition of the national default retirement age has forced HR practitioners to look at their retirement policies and the implication of managing an older workforce. But we must not be naïve: the change in legislation not only impacts on our retirement policies, but will also necessitate employers to review key HR policies and procedures across their business. Some of the key areas are as follows:
With potentially more employees choosing to work past the state pension age, further scope surrounding flexible retirement will be necessary. Phased retirement and incentives to retire are inevitably going to be increasing challenges to HR organisations in balancing work performance, health - and its impact on capability - and the inevitable demand for progression among other employees. Pension design changes are key within the University sector, and this is reflected through changes to the Universities Superannuation Scheme allowing some categories of staff to draw up to 80% of benefits early.
Greater significance will be placed on organisational competence to manage effective performance management. Clear policies and procedures are vital in making this possible and career planning must become a significant part of the discussion within such processes. Enhancements at the University would need to involve regular career-long performance reviews with all employees. These are arguably perceived as burdensome "management" activities and could generate significant cost implications through supplementary time and resource investment.
Younger employees will want other paths to progression beyond simply applying for vacant posts. Organisation designs will need to be more fluid if we are to maintain our rising talent. We cannot shy away from the inevitable fact that opportunities to work longer will be seen to assist one generation, but may not be viewed in the same light by another.
There is a danger that an older workforce is stereotypically perceived as less capable and more adverse to change. Capability remains an important aspect but flexible working is an avenue the older workforce (and all other staff) may find beneficial.
For example at the University of Cambridge, we consider all requests for flexible working in line with the organisation's requirements.
The demographics of the UK are shifting. In 2010 17% of the population were recorded as aged 65 and over, and reports anticipate that by 2035 this figure will have risen to 23%. With an ageing population, the knock-on effect of people working longer is the impact on employment opportunities for the younger population. This point is particularly relevant to our University. Refreshment of the academy is essential by allowing new academics to join and provide a balanced mix of generations. We must attract talented members early in their careers but, with a low staff turnover, this will not be easy to perform. More difficulties will also be placed on addressing the University's historical challenges of gender and ethnicity imbalances. Those most likely to seize the opportunity to work longer could predominantly be white, male members of staff, which could lead to fewer younger, female and ethnic minority employees progressing to senior posts or becoming employed. Diversity for some potential characteristics could seriously be hampered.
Workforce planning will become an even more significant activity, with employers no longer able to rely on the assumption that workers will retire at a given age. By establishing employee's work plans, central strategic decisions would be assisted. A longer planning horizon will inevitably be adopted by the University to help this issue, alongside a proactive approach to communication with staff.
It is clear that there are perceived benefits from the abolition of the DRA. But in desirable specialist professions of which the University has many, there are also challenging implications to overcome.
Indi Seehra is HR director at the University of Cambridge
Article from HR Magazine