Thursday, August 17, 2017

The benefits of an ageing workforce

MICHAEL MURDOCH,  DIRECTOR OF EMPLOYMENT AFFAIRS

Findings from the World Bank show that the increase in UK life expectancy has shot up from an estimated 76 years old in 1990 to an average of 81 in 2013. A paper published in the medical journal Nature last year even claimed to have evidence that a human lifespan could be up to 115 years old1 .

Over the next decade almost 20% of the construction workforce will retire, while around 22% of the workforce are currently over 50 and, believe it or not, 10% are over 60. This is magnified by the fact that other sectors and industries, perhaps offering more stable work patters, less physical demand and better pay, are where the young talent are being drawn to.

Around 20% of all construction vacancies are hard to fill because young people are simply not attracted to the sector. A recent industry study2 showed that young people give construction just 4.2 out of 10 when ranking desirable sectors to work in. These kind of perceptions are reinforced by parents and societal pressures, which push children towards a career in medicine, finance or legal services.

Despite new laws aimed at improving recognition of the ageing population and combating workplace discrimination, awareness of the older workforce and its influence on the built environment has slumped since the CIOB’s (Chartered Institute of Building) first study in 2009.

Research argues that retaining ageing workers’ knowledge and skills is crucial and that it sends a clear message to the government – to be successful, construction needs much more investment and recognition of older workers, alongside more government emphasis on skills and education for people at different stages of their careers. The recent apprenticeship reform now enables anyone of any age to become an apprentice or be funded in a career change, so our ageing ductwork and pipefitters could be taught to be managers, project managers or design technicians.

With the skills gap arguably becoming more of a skills grand canyon, it really is time for employers to recognise the skills and expertise of the older workforce and facilitate their passing of knowledge on to the next generation. Last month we saw the government bring forward plans to raise the retirement age to 68, announced by Secretary of State for Work and Pensions David Gauke in Parliament on a dreary Wednesday afternoon. However, extending the retirement age will not offer a solution for the built environment as a lot of our roles and work are simply too physically demanding.

The Labour Party have also pointed out however, that about 55,000 people in the seats represented by David Gauke, Chancellor Philip Hammond and Theresa May (to name a few) will be hit by the increased pension age. We will see how long the appetite for this new policy lasts…

It is not always possible to safely extend the retirement age for a sector such as ours, and BESA provides practical assistance to its members in managing, developing and training their workforce and in establishing terms and conditions of employment. Re-designing the built-environment for inclusion is not just about ‘doing the right thing,’ it is also essential for businesses to survive.

Efforts to address skills shortages and improve productivity must go further and faster in, not the coming years, the coming months. Companies need to make sure that they have a robust process in place to ensure that their entire workforce is accounted for and reflected. As our workforce get older, and our pool of new talent gets smaller to choose from, the value in retraining and skills development can save a lot of money compared to having to use external labour or specialists.

There is significant risk that comes from ignoring or avoiding a problem that is on the horizon rather than staring you straight in the face, however, that horizon is fast approaching. If employers make decisions about who to recruit, who to promote or who to train on factors such as age, they restrict their choices.

The government’s voluntary Code of Practice on Age Diversity in Employment (available from the Department for Education and Employment) gives simple practical guidance on what businesses can do to tackle unfair discrimination against older workers. Over the years the government have faced a powerful lobby calling for age discrimination legislation along the lines of existing anti-discrimination statutes, and the Confederation of British Industry have long been encouraging businesses to commit to the Government’s voluntary code also.

Sound employee engagement is the first step towards managing and taking advantage of an ageing workforce. Your business will probably have information on those that you employ, including their ages. It makes sense to analyse this information into age bands, which will then enable you to get an age profile of your workforce. This profile can then help you to identify, plan and act on upcoming or immediate risks, such as planning for a peak of older workers retirement, tackling any obvious imbalances and checking that your whole workforce are getting access to training and other facilities.

Encouraging your employees to invest in their futures should be just as important as the investment that you will make in them. A significant proportion of the industry are not making adequate provisions for their retirement and this can lead to employees not retiring because they simply cannot afford to; often a result of inadequate pension plans. Being alert to this worrying trend, the BESA and the Unite Union jointly introduced a contractual entitlement for hourly paid operatives in the industry to participate in an employers’ contributory pension scheme, well ahead of the curve in terms of the Government’s auto enrolment requirements. The employers’ contribution presently stands at 5%, with Operatives making a 1.5% contribution, effective as of June 2017. 

The ageing population offers opportunities for businesses and society at large, but it also presents challenges. These challenges have been ignored for a long time and, if that continues, threatens to undermine not only business and productivity, but the simple benefits and pleasures of us living longer. At BESA we examining industry practice and collaborating with a number of external bodies to identify the implications these challenges present for Government, our members and for the built environment as a whole. We will also be publishing our own policy recommendations on this topic soon.

1  http://go.nature.com/2tJOZdT

Data from Construction Industry Training Board (CITB) survey

Share this post