Scotland’s workforce has aged dramatically in the past 20 years. According to Scottish Government figures, the number of people aged 45 to 64 has increased by 26% while the number of people between 25 and 44 has fallen by 8%. During the next two decades, the proportion of pensionable people is projected to increase from less than one third (31%) to more than 40%. This has the potential to stretch valuable healthcare and welfare resources to their limit.
Employment among 50 to 64 year olds is increasing (up from 62% in 2004 to 69% in 2016). But this growth is not fast enough to keep up with the needs of our ageing population. Particularly when you consider the uncertain future for the country’s more than 115,000 EU workers.
The solution lies in helping people extend their working lives. If the employment rate of people aged 50-64 matched those aged 35-49, it could add as much as 5% to UK GDP or £88 billion annually. If we take Scotland’s proportion of UK population (8%) that could mean £7 billion each year north of the border.
However, we are not making the most of this opportunity. There is still a significant gap in understanding between employers and employees about the opportunities and practicalities of working in later life
When I spoke to a range of employers and older people for a recent Scottish Government research project, I learned ‘retirement’ is now almost a taboo subject. Employers are too concerned about falling foul of age discrimination legislation to offer advice about retirement. I also discovered employees don’t know where to look for guidance.
Flexible working has been promoted as the big solution to unlock the economic potential of older workers. Retaining employees by offering reduced hours contracts is effective for those companies able to accommodate these new arrangements. 62% of those aged 65 and above in Scotland are now employed part-time. Yet workers still feel unsure about their rights. Women in particular don’t feel empowered to ask their employer.
Recruiting and retraining people 50 and older appears to be holding back progress. Companies don’t know where to find the right candidates, and many employees believe no one else would want to hire them if they lost their current job.
This week more than 100 Scottish business leaders from organisations including Aviva, NHS, Scottish Water, Sodexo and Waitrose, will come together for the Time to Act Conference.
Joining them are University of Edinburgh Business School, Business in the Community Scotland, Age Scotland, the Chartered Institute of Personnel and Development and The Scottish Government partnership; together they will call on organisations across Scotland’s to be more inclusive when it comes to the age of their workforce.
The opportunity could not be clearer. It’s time to act.
Professor Wendy Loretto is Professor of Organisational Behaviour and Dean of University of Edinburgh Business School. She will lead the Time to Act Conference at University of Edinburgh Business School on Wednesday 26th September 2018.
An original version of this post appeared in Scottish Business Insider.
Image source: @iStock/DGLimages