By Lee Ann Panglea, Head of the CIPD in Scotland and Northern Ireland
Introduction
Scotland’s population – and workforce – is ageing. While about 400,000 more people live in Scotland today than in the 1990s, the number of children living here has reduced by about a tenth. In contrast, the number of people aged 65+ has grown by over a third. By 2045, the number of people aged 65 and over is projected to grow by nearly 30%. The number of children, on the other hand, is projected to fall by over 22%
All of this means that employers will need to improve how they attract, manage and develop people as they age. To help them do this, the CIPD has this week published Understanding older workers in Scotland. This blog summarises our findings.
Who are older workers?
Older workers (generally defined as aged 50+) are projected to account for a larger proportion of the workforce over the next few decades, but even today they are a sizeable share of Scotland’s labour market. Official statistics show that over 852,000 older workers account for a third (33.3%) of the Scottish workforce – roughly the same percentage as UK-wide (32.6%). There are also more than 90,000 workers over the age of 65.
Of course, it is also important to look at older workers who are currently not working, but would like to. This includes the unemployed (by definition looking for work), who make up about a third of this number, and inactive, who make up the other two-thirds. In Scotland, this amounts to around 100,000 workers. This is a considerable number of people who could account for around 4% of the workforce if they were to find employment. Removing barriers to employment for this group of people should be a priority – for employers and policy-makers.
Where do older workers work?
The age profile of industries across Scotland differs markedly. An industry like agriculture is top heavy - it has an average age of 48 and over half (53.8%) are over 50. At the other extreme is hospitality, which is bottom heavy. This industry has an average age of just 35 and only 21.5% of people are over 50. Extending working lives will clearly require an industry lens to understand the needs and preferences of different groups.
On the one hand, industries with older average ages are at greater risk of a mass exodus as people transition into retirement. However, there may be lessons to be learned from these industries about accommodating older workers. Employers with this sort of workforce age profile should be developing their talent pipeline by building links with education providers, identifying the key selling points for careers in their sector and focusing on improving job flexibility and progression opportunities.
What are older workers’ preferences?
We know that many older workers voluntarily reduce their hours towards the end of their careers and statistics show that they have much higher rates of part-time working, especially those aged 65+. Some of this is linked to adult caring responsibilities, which also increase by age, but also the concept of semi-retirement, where older workers trade full-time pay for better work–life balance. Many older workers would prefer shorter hours regardless of pay. This suggests there is still not enough flexibility to fully cater to older workers’ preferences and employers should be more willing to consider requests for reduced hours.
Another good indication of this preference for flexibility is the level of home and hybrid working. Working from home exclusively increases with age and is particularly important for the post-65 age groups. The shifts in employer attitudes throughout the pandemic therefore provide a good opportunity here.
We also find a clear relationship between perception of career progression opportunities and age, with almost 22% of the oldest employees strongly disagree that their job offers good opportunities for career progression. Similarly, we see older workers participating less in training. Much of this is a reflection of the stage of an employee’s career. However, it can also point to gaps in skills development opportunities – on an employer as well as public policy level. The CIPD has long argued that skills investment needs rebalancing, with lifelong learning given much more prominence in light of the economic trends on the horizon.
Furthermore, we find older people have the lowest rates of formal qualifications. Formal qualifications are not, of course, a direct proxy for skills. This change represents increased time in education for more recent generations, including higher participation in tertiary education. Older workers are therefore less likely to apply for vacancies advertised with formal qualification requirements. Skills-based requirement is therefore a real opportunity to tap into this cohort.
Lastly, both long-term illness and disability increase with age, with implications for the world of work.
Around one in four workers are reaching the point at which a health condition limits the work they can do before they reach retirement age. Some will exit the labour market early while others will be limited in the kind and amount of work they can do. Employers have a key role to play here, especially by making reasonable adjustments that facilitate people working with a health condition.
What does it all mean for employers and policy-makers?
People are living longer, and the proportion of older workers in the Scottish workforce is increasing. This means that employers will need to improve how they attract, manage and develop people as they age. This is particularly the case against a backdrop of technological change, rising skill and labour shortages, and more restrictive immigration policies. The analysis in our report suggests that there are three key areas where change would help retain and recruit older workers – flexibility, health and wellbeing and skills and training.
Flexibility: Older workers are even more likely to value flexibility than their younger colleagues and are more likely to want to work fewer hours, as evidenced by higher rates of homeworking, part-time working, and self-employment. Older people are also much more likely to have caring responsibilities. This underlines the importance of ensuring employers take steps to increase the availability and range of flexibility as a means of both attracting and retaining workers as they get older.
Health and wellbeing: Flexible working can help older workers affected by health conditions remain in employment or find suitable work. More than half of workers have a long-term health condition by the time they reach 60, and a third are affected by some form of disability. While only a quarter of older workers over 60 say that their health limits the type or amount of work that they can do, too many workers leave employment by this age because of poor health. Employers and policy-makers must take steps to support the health of workers throughout their working lives, to maximise their chances of enjoying a healthy and active life as they get older.
Skills and training: Another area where a holistic focus by employers will benefit workers across the age spectrum is access to training and development. Our report shows that older workers are most likely to disagree that there are good opportunities for progression in their role and are also less likely to take part in formal off-the-job training. Employers, and particularly managers, should guard against assumptions that older workers are less likely to be interested in training or career progression. The impact of technology on jobs will increasingly mean workers will need to upskill or reskill at different stages in their career.
