‘There’s no one reason why older workers have left the labour force post-Covid’

Why is the number of older workers who are economically inactive rising after the Covid lockdowns? There have been several reports in the last months on this, most stemming from analyses of Office for National Statistics figures, but not all the analyses say the same thing and the picture is quite confusing. Workingwise.co.uk spoke to Tony Wilson from the Institute for Employment Studies to understand a bit better what is happening.

For Wilson there are a lot of different things happening and the important thing to emphasise is the diversity of people’s experiences and circumstances over the last two years. “The main point is one about diversity and heterogeneity,” he says. “It is very easy when you are looking at information over a short period to paint things in a primary colour and miss the nuances.”

There are some things, however, that are clear – that many people in their 50s and 60s have retired early or left the labour market as a result of the pandemic. An ONS study in March shows that this has been happening across the board for older workers – from wealthier professionals to those on lower wages, although the increase in people from higher incomes retiring earlier is higher than for those from lower income jobs. However, the latter have traditionally been more likely to retire early generally.

Where it becomes less clear is that some of the studies have tended to suggest potential reasons for this – whether it is people being fed up of work, older workers missing the social connectivity of jobs that became remote during the pandemic or health reasons. All of these may be happening, but it could be that there are many other reasons too, says Wilson, or even that individuals are leaving for a collection of reasons.

A diverse group

Wilson’s hypothesis is that, over the last two years, people have taken the opportunity to retire a bit earlier, enabled in part by the Government subsidies such as furlough and, in particular, the support for some self employed people, over the course of Covid. Older men are more likely to be self employed than other groups and may have taken the chance to wind up their business and taken advantage of changes to the pension system to draw down their pension earlier, says Wilson.

However, he reiterates that the group who has left the workforce is very diverse and many older workers in less secure, less well paid work may effectively have been pensioned off early, for instance, he notes a fall in domestic cleaners which would affect older women more. Skilled trades have also been very affected by Covid. Many of these may have had a poor experience of work and been scarred by their experience during the pandemic. They may also have underlying health issues or have been affected by social isolation as a result of Covid.

The first thing employers can do is recognise they have a problem [when it comes to age diversity]; the second is to acknowledge that older people can be part of the solution

Wilson is worried that we may make sweeping generalisations about the reasons people have left without totally understanding all that is happening, for instance, people may assume that long-term health conditions – which account for significant drop-out during the pandemic across all age groups – will stop people from working when that may not necessarily be the case. Moreover, some people may give retirement as a reason for economic inactivity when that is not the main reason they have left. They may, for instance, have lost their job, found it hard to get another one [with ageism in the recruitment process possibly being a factor], been furloughed or may not enjoy their work.

Don’t write older people off

Wilson thinks it is wrong to write people who have taken early retirement off and thinks they may at some point want to return, particularly with the cost of living rising. Indeed, a report in yesterday’s Metro talked about a survey about rising ‘unretirement’. If they can find the right job, which is a good fit, offers social contact and steady pay they could, he thinks, be encouraged back. “I am an optimist and I’m not prepared to write off a generation of people or deal with the massive economic consequences of doing so,” he says.

Those consequences include pensioner poverty, more workless households and a less diverse labour force. He would like to see improvements in access to employment services for older workers. Currently only those on Universal Credit who are searching for work can access support through a Job Centre Plus and much of the support available is very generic. There used, for instance, to be more support for returners who face very specific challenges. Wilson wants support available in settings where older people are and he wants it to be tailored to their needs. That doesn’t mean something completely different to what is on offer to other jobseekers. However, it might include more support for online job searches, virtual interviewing or competency tests with which older workers may not be as familiar as younger ones.

It also means giving people a better understanding of the sorts of jobs available through career coaching and counselling and helping them to understand how their skills can be applied in different contexts, what some of the newer jobs involve and helping them to search better. Without wanting to stereotype older workers as lacking digital skills, Wilson says that some may need support to develop skills such as how to engage people on social media. Technology can be a double-edged sword when it comes to helping older workers into work, he acknowledges: on the one hand it can help with job searches and upskilling can bring more opportunities; on the other, it can entrench bias through programming it into automated systems.

What can employers do?

When it comes to employers, Wilson says that much more needs to be done. “For decades employers have viewed older people as a problem. Now they are possible solutions for labour shortages and retention challenges. Older workers have for years been the ugly sister of equality and many employers don’t think they have a problem with age. They need to start thinking more about what they can do, such as using more inclusive language, age-diverse interview panels and checking biases. They should try to look beyond specific qualifications and cvs and focus more on capabilities, competency and confidence.”

He adds that they also need to view older people in a more positive light – due to greater longevity they may stay in the job for longer than employers imagine; they may in fact be a lower risk than younger workers who tend to change jobs more frequently.

“The first thing employers can do is recognise they have a problem; the second is to acknowledge that older people can be part of the solution. They need to start talking to them,” says Wilson.

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