Do you have anyone over 65 on your payroll? October is the month when the Default Retirement Age (DRA) begins to be phased out. Unless you informed them of the date you intend them to retire before the 6th of April this year, you can no longer force them out because they have reached the DRA. While they retain their right to retirement at 65 if they wish, you can no longer oblige them to do so.
Will the DRA be Good for Your Company?
Of course, many employers have been keeping workers on after that age for quite some time. Some have been happy to recruit more mature people because they perceive them to be more reliable and loyal than the younger generations. They have more work and life experience, so more knowledge of the world and how the markets operate. They are often more willing to keep going when things go wrong, and to persevere until they get it right. And statistics prove that overall they take fewer sick days, despite being of an age when you would expect them to have more health problems.
Having a balance of different age groups among a workforce is no bad thing, provided it has a healthy culture of respect flowing both ways between younger and older employees. Everyone should be valued for what they can bring to the party. While greater energy and enthusiasm for state of the art technology and other developments might come from a younger group, many of their older colleagues might have more staying power and more wisdom to see both advantages and disadvantages of proposals.
Will the Younger Generation Suffer?
Some people believe that the knock on effect will be significantly fewer jobs for young first time applicants, especially in the unskilled sectors. To some extent, this appears to be inevitable. However, young people without skills are hardly likely to be recruited into vacancies left by retirees who have acquired many skills over the years. There will still be areas where this type of young worker is needed.
A number of companies have introduced more flexible working hours to accommodate older workers who would like to continue in work but slow down a little. Part time positions are ideal for this and allow businesses to retain the skills and experience of their more mature staff, and still have vacancies for all ages of applicants.
What About the Financial Consequences?
Anyone over 65 that you have to let go must receive the statutory redundancy package. There may also be an effect on your ongoing payroll budget, so discuss it with your outsourced bookkeepers before you decide on your future HR strategy.