You may remember that in the last issue of DeBrieF we included a link to a survey looking at the new retirement age laws and pension regulations. We had over 200 respondents and the findings were interesting to say the least. It would appear that the North West business community has strong opinions!
From the survey, over 50% of businesses stated that they didn’t support the removal of the UK’s default retirement age of 65 and around 60% confirmed they would have to re-think their employment strategy as a result. This doesn’t seem to bode well – especially in such tough and challenging times.
When we’re talking to our clients, the general consensus is certainly mixed and it depends on the sector and the industry of the individual business. The arguments both for and against are robust so it will be fascinating to see how things pan out over the coming years as employers and employees adapt to this new culture and way of working.
On the positive side, it’s great recognition that we are all living longer as none of us want to see a decline in that particular trend! Also, it can allow companies to retain and maximise the experience of key individuals. For many though that’s where the good news ends…
One of the main negatives is that it may stop younger people from progressing as quickly as they would like. Lower levels of retirement will have an obvious knock on effect as the career ladder will essentially be blocked. The fear for many is that this will in turn lead to disgruntled workers jumping ship – often after expensive training – to seek better long term opportunities elsewhere.
The expected upturn in red tape is also a big fear as companies are being forced to ensure appraisals and performance management are both rigorous and structured. Previously, organisations were able to enjoy a degree of flexibility but they now can’t take the risk as every issue will need to be tackled head on to avoid any kind of conflict or suspicion and ultimately age discrimination across the age groups.
Ultimately, all of this can and will affect people’s dignity. Historically, companies which employed staff who weren’t necessarily up to the job were able to wait for the formal retirement age to arrive but that choice has now gone. The only viable option is to manage the situation through performance management.
As I said, time will tell but workers will only retire if they can afford to and no longer just because they want to. Over the next few years, all of this will settle down but in the meantime, it’s the job of employers and the Government to re-educate the population about effective pension saving otherwise morale and red tape will be the least of our problems.