Employers Forum on Age argues against Default Retirement Age

Rachel Krys, campaign director for the Employers Forum on Age, has written a most insightful article for Personnel Today in which as well as arguing against the DRA on age discrimination grounds points out the strange and very old fashioned thinking that emanates from the CBI on this issue. This is so good that I am passing on an extract from the article.


"No doubt the CBI will submit its research, which states that 81% of requests to remain working are being accepted. This is supported by the EFA's own research. But we have also submitted the research we carried out with 200 HR professionals last summer. It found that almost two-thirds (64%) of employers who operate a mandatory retirement age agree that it can lead to a loss of valuable knowledge and talent.
Among those organisations that have removed the mandatory retirement age, more than three-quarters considered it a positive step for their organisation and said it helped maintain valuable skills and their organisation's customer-facing image and reputation.
But what is happening to the people whose requests to stay on weren't granted? And how many are not even getting to that stage because there is a strong culture that encourages people to retire? If they are being forced to retire against their will, there is nothing they can do about it.
In addition to the research, the EFA also carried out focus groups with employers, exploring the barriers to removing the DRA. The central concern continues to be lack of confidence in their own performance management systems. This is exacerbated by the ongoing belief that performance declines rapidly with age and people will want to work for ever, given the chance. Although there is little evidence to support these stereotypes, the image that there will be old people who can't do the job, clogging up the corridors, is persistent.
Few employers have much confidence in their appraisal schemes. But the organisations that have removed a retirement age, including B&Q, Nationwide, JD Wetherspoon, Marks and Spencer and BT, have identified an improvement in the rigour and effectiveness of their performance management schemes as one of the biggest benefits. When you take away retirement, managers can no longer allow poor performers to coast.
The argument that retirement allows people to leave work with dignity is still used, and some employers seem to be clinging onto this paternalistic approach. However, none of the employers who operate without a retirement age have any evidence that there is a loss of dignity or that older workers are being forced to stay on when they are no longer capable. In reality, the majority of employees are very alert to their capabilities and most want to continue working for a relatively short time to fit in with other commitments they have."

Mandatory retirement age good for employers? We don't think so.

The Employers Forum on Age (EFA) and The Age and Employment Network (TAEN) have conducted a survey of 198 HR directors and senior managers, designed to gauge the experience of employers implementing a mandatory retirement age (MRA). 85% confirmed their organisation had an MRA, of which 98% have set it at age 65.

However, the findings of the survey showed that while 81% of firms with an MRA believed it made manpower and succession planning easier, 71% of those without a default retirement age said they experienced no such problems.

In addition, while 80% of employers using an MRA felt it stopped the careers of younger workers from being blocked, two-thirds said they did not believe it helped to improve performance and 53% claimed an MRA had not helped to move on underperforming older employees.

Other findings revealed that 95% of employers with an MRA apply it to all staff, while 10% said they always agree to requests from individual employees to continue working past the MRA, although the majority - 84% - only sometimes agree and 7% never do.

The survey showed 64% of those questioned claimed the biggest disadvantage to a default retirement age is the loss of talent to an organisation, while 74% admitted it had an adverse impact on workers preferring to work past age 65, and 37% suggested it posed risks from demographic factors such as population ageing and declining birth rates.

Meanwhile, of the 29 firms without an MRA, 93% revealed this was a formal policy decision in the organisation, and 78% claimed the move was a positive step as it improved morale and at least 45% said they believed it had improved performance in some way.

That said, the findings also showed that in those firms without an MRA just 18% said "most" employees work beyond age 65, while 82% admitted "only a few" take advantage of the potential to keep working.

In conclusion, the EFA and TAEN claimed: "Taking these results at face value, it would seem that the advantages of having an MRA have been exaggerated. The benefits of mandatory retirement for employers do not seem in practice to match the claims made by those who wished to see mandatory retirement retained."

It argued the survey "undermines the argument that there are strong business benefits in having MRAs" as most respondents agreed its presence "had an adverse impact on employees who want to work on".