Retrain older workers to overcome £182bn shortfall #GoldenAgeIndex

This year’s update of PwC’s Golden Age Index shows that the OECD has continued its gradual progress towards greater engagement of older people in the workforce. Iceland, New Zealand, Israel, Estonia and Sweden continue to lead the OECD, taking top positions on the index.

They explore the potential boost to OECD GDP from raising UK employment rates of older workers to New Zealand levels, finding that the OECD could experience a long-term gain of around $3.5 trillion and the UK around £180 billion. 

The Golden Age Index is a weighted average of seven indicators which reflect the labour market impact of workers aged over 55 in OECD countries, including employment, earnings and training.

Responding to the revelation that Britain is losing nearly £200 billion every year as a result of over-55s being under-employed, Richard Shea, Managing Director, Global Expansion Markets at Futurestep, explains why it’s vital for businesses to tap into the older workforce and how they can go about:

“Both social and economic factors have led to a prolonged working life for a large part of the workforce globally, but Britain is not currently taking advantage of this and tapping into the years of invaluable experience that is on the market.

“It shouldn’t just be down to Government to provide financial incentives to companies to retain older workers. At a time when digital disruption is overturning established markets, there are clear benefits to having the sense of perspective and judgement that a more experienced employee can bring to the room. Having a diverse workforce is the key to being able to look at an issue from different angles and solve problems in distinct ways.

“Older employees have the same expectations as everybody else; to work for an employer that recognises their value, puts their skills to the best possible use and keeps them engaged with the role. To do so, employers need to invest in training their older staff as they would any other employee, ensuring that their skills are keeping pace with the market. Personalising training programmes to their needs and their knowledge base is the key to making this work.”

Key findings

The key findings from the 2018 report are as follows:

• Iceland, New Zealand, Israel, Estonia and Sweden take the top five spots, with many of the Nordic countries also performing well on the index.
• Germany, Israel and New Zealand have achieved the most significant improvements in the rankings from 2003.
• The UK maintains a middling position on the index, falling one place to 21st position this year, although the UK’s absolute performance has continued to improve 
• There is a large regional disparity in the employment rates of older workers across the UK, ranging from around 63% in Northern Ireland to almost 75% in the South East. 
• The OECD could achieve a $3.5 trillion boost to GDP in the long-term if countries raised their employment rates of those aged over 55 to match New Zealand levels. For the UK, the potential gain could be around £182 billion.
• Key drivers of employment of older workers are public pension policies, life expectancy and caring responsibilities. Successful policy measures include increasing retirement age, supporting flexible working, improving the flexibility of pensions and further training and support for older workers to become ‘digital adopters’.
• Automation poses both potential opportunities and challenges for older workers. AI technology can boost economic growth, generate more labour demand and support longer working lives (e.g. through use of digital platforms that allow older workers to market their skills more widely). But it could also require some older workers to retrain for new careers later in life, as well as to acquire additional digital skills in current careers.