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As ONS figures show the number of job vacancies has hit a new high, Lucie Mitchell investigates the reasons older workers have left the labour force and what can be done to attract them back.
Since the start of the pandemic, significant numbers of older employees have been leaving the workforce, causing major challenges for businesses and the economy.
The statistics are pretty conclusive. Recent figures from the Office for National Statistics (ONS) show those aged 50 and over saw the largest increase of economic inactivity among all age groups since the pandemic started – and this follows a historical downtrend since records began in 1971.
Research by the TUC also found that the number of people aged 50-65, who were not actively looking for work, rose by over 200,000 between the third quarters of 2019 and 2021.
Plus, according to the Institute for Employment Studies (IES), economic inactivity among the over 50s has increased by 560,000 since the pandemic started, now accounting for 80% of the total growth in inactivity.
“Since the pandemic, we have seen older workers – who have not yet reached retirement age – leaving the workforce at a higher rate than before,” remarks Professor Sophie Hennekam from Audencia Business School. “This is in contrast with the trend of the past 25 years, when individuals were extending their working lives.
“It has been suggested that older workers who have been made redundant during the pandemic might struggle to find a new job, and this can lead to a situation in which they decide to retire early, even though they would have liked to continue working,” she adds.
“This is especially the case for older, low-skilled manual workers. This is problematic not only for older workers themselves, but also for organisations, because older workers bring unique skills and experiences to the workplace that are often difficult to replace.”
Aside from redundancy and retirement, caring responsibilities and ill health seem to be the main factors behind older workers’ unexpected withdrawal from the labour market, adds Professor Hennekam.
Yet there are also other reasons for this unprecedented drop-off in older workers. “The pandemic – and the sudden switch to remote working – has led many to re-evaluate what’s important,” comments Nick Gallimore, director of innovation at Advanced People Management. “Work/life balance has become more important than ever before, and many people have made fundamental changes to the type of work they want to do as a result. For some older employees, this has meant leaving the workforce altogether.”
Stephen Frost, a diversity, inclusion and leadership expert and founder/CEO of Included, adds that older workers can be overlooked and undervalued, which can lead to them dropping out of the jobs market.
“Not feeling valued in their jobs contributes to stress and mental health reasons for leaving the workforce,” he says. “Age is a protected characteristic under the UK’s Equality Act, but it is often not discussed in the same manner as other characteristics. Older workers can also be overlooked for training and development or subjected to assumptions about their skillsets.”
One obvious implication of this over 50s exodus is a significant skills and knowledge gap in the workplace. “Many older – and therefore more experienced – people carry significant skills and knowledge, and employers therefore risk a huge skills drain from their organisations,” warns Gallimore. “Older workers are also likely to have been with their last employer for much longer than their younger counterparts, so employers are losing people with intimate knowledge of processes, tools and customers along with those skills.”
Leaving work early also presents considerable challenges to older workers themselves. “Those who have left the workforce over the age of 60 during the pandemic are experiencing increased concerns and stress around finances – including the increased cost of living and a lack of income and savings – than those who left work before the pandemic,” remarks Frost. “There is also a social element to work. Leaving the workplace can be isolating and this is of particular concern among older people, as they are a demographic at increased risk of facing loneliness.”
There is conflicting evidence as to whether there are higher numbers of older men or women leaving the workforce in the wake of Covid. A recent analysis of ONS employment figures by Rest Less revealed that economic inactivity levels amongst men aged 50-64 are now at a record high, totalling 1.47 million – an increase of 13% in the two years since the pandemic began.
However, according to the IES, higher levels of older women are becoming economically inactive since the pandemic.
“Some research suggests that caring responsibilities are a contributing factor for this difference between rates of men and women leaving the workforce,” comments Frost.
Indeed, according to the TUC, older women have historically had higher rates of inactivity than older men, and there are currently over 660,000 more women aged 50-65 who are economically inactive than there are men – and this is in part due to caring responsibilities.
“Economically inactive men are more likely to be retired or in ill health than women, but the greatest difference is in the rates of inactivity because of caring responsibilities,” the TUC stated in its report. “The proportion of women in this age group who have left the labour market for this reason is more than twice as high as the proportion of men.”
So, what can be done to address this mass exodus and attract the over 50s back to work?
Professor Julie Hodges, professor in management at Durham University Business School, believes there is a need for change in organisational policies and procedures.
“This includes enhancing the skills of the over 50s so that they have the capabilities to work effectively and have opportunities to advance their career; providing re-training and bespoke support so individuals can change jobs or careers; ensuring there is provision for individuals to manage health conditions and disabilities; addressing workplace discrimination against older workers; and providing flexible working opportunities.”
John Lees, careers expert and author of How to Get a Job You Love, adds: “The main things to offer are variety, the chance to learn new skills, flexibility, and employer messages showing that they actively value older workers’ wisdom, maturity and experience.”