CENTRE FOR AGEING BETTER – WRITTEN EVIDENCE (EMP0027)
 

Employment and COVID-19 inquiry
 

1. About the Centre for Ageing Better

1.1 The UK’s population is undergoing a massive age shift. By 2050, one in four people will be over 65.[1] The fact that many of us are living longer is a great achievement. But unless radical action is taken by the government, business and others in society, millions of us risk missing out on enjoying those extra years.

1.2 At the Centre for Ageing Better we want everyone to enjoy later life. We create change in policy and practice informed by evidence and work with partners across England to improve employment, housing, health and communities. We are a charitable foundation, funded by The National Lottery Community Fund, and part of the government’s What Works Network.

2.    Older workers are the backbone of the economy, but they have been some of the hardest hit during the pandemic

2.1 Before lockdown, progress on 50+ employment was set to add 2% a year to GDP by 2040. This is a benefit our economy cannot afford to lose.[2]  The COVID-19 crisis risks reversing this progress, with hundreds of thousands of older workers now at risk of losing their jobs. Despite the government’s investment in supporting businesses through this crisis, many people have lost their jobs or have reduced hours and earnings. This will have a significant impact on their financial position and ability to save for the future – and increase their reliance on the state on later life.

2.2 3.4 million key workers are over the age of 50, making up almost a third of all key workers and an estimated 130,000 are over the age of 70.[3] However, one in four older workers – 2.5 million in total – have been furloughed, and ONS estimates suggest that almost 400,000 will be unable to return to their previous jobs. There are already over 600,000 people age 50 plus claiming unemployment-related benefits – double the number prior to lockdown. There are also older people who may be choosing to absent themselves from the labour market altogether – 270,000 people age 50+ have become ‘economically inactive’ since March.

2.3 We cannot allow a cohort of people in their 50s and 60s to be pushed out of work before their pension age, leaving them financially struggling both now and in their later life. The potential productivity loss from a spike in early retirements is one that our economy cannot afford and will turn a short term shock into a long-term unemployment crisis for older workers.

3.    People over 50 who lose their job in the crisis will face the greatest challenges finding a new one in the recovery

3.1 The emerging picture of the labour market impact of the pandemic suggests a u-shaped effect. The youngest workers will be hit hard by the immediate unemployment shock – and the oldest workers will struggle the most to return to the labour market if they lose their job.

3.2 Prior to the pandemic, over 50s who were unemployed are twice as likely to be out of work for 12 months or more as younger workers and almost 50% more likely as workers aged 25 to 49.[4] A third of over 50s we surveyed last year believed they had been turned down for a job they had applied for because of their age.[5] Following the last ‘Great Recession’ – when the US experienced much greater levels of unemployment than the UK – older workers in the US were less likely to return to work than younger workers, and took longer when they did.

3.3 Yet although we have seen targeted support for the under-25s in the government’s immediate response to the pandemic, we have not seen anything for older workers. Under current plans, older jobseekers will be served by the mainstream employment support offered by government to all over 25s. While there is local discretion allowing some job centres to provide specialist support, through the flexible jobs fund, there is no mandate for specialist, targeted provision for the over 50s.

3.4 This approach creates a real risk of a long-term unemployment crisis for older workers. We know that mainstream programmes do not work well for older adults. Just 1 in 5 people over 50 who were referred to the government’s work programme came out with a job: the worst outcomes of any group.[6]

3.5 Our research with the Learning and Work Institute identified five challenges older workers say they face returning to work after COVID-19:

3.5.1     A skills gap in applying for jobs and securing work

3.5.2     Developing new skills to transition to new sectors post COVID-19

3.5.3     Finding flexible work that allows them to continue balancing caring responsibilities and maintaining a work life balance

3.5.4     Stereotypes and ageism when applying for jobs

3.5.5     A lack of confidence both in their own ability and their perceived employability.

3.6 Older jobseekers have distinct needs and challenges – and it is crucial that the government’s post COVID-19 employment and skills support meets them.

4.    Policies for training and support are not tailored to suit the needs of older workers

4.1 Recent policy initiatives on training have not catered for the needs of older workers with only minimal provision for those aged 50 and over. Only 10% of people aged 50-59 reporting they recently took part in training in 2015/16. 86% of spending on adult education in the UK targets the under 25s11.. As unemployment grows, older workers must be supported to retrain and return to work or many will face long-term consequences of being under-pensioned in retirement. Although the government have committed money to training and skills, this must not only be for younger people, particularly if the job market changes dramatically after COVID-19.

4.2 It’s vital then that as we move forward, job seekers in this age group get the sort of help they need. Jobcentre Plus has changed dramatically in the last couple of weeks: moving from an organisation that concentrates on getting people into work, to one which is putting all its resources into processing benefit claims as quickly as possible. When it starts to look like we’re emerging from the other side of this, DWP will need to quickly change again, focussing on early intervention to support the newly jobless so that they don’t become the long-term unemployed. Once they do, tailored support for older jobseekers will be vital, if we want the best chance getting this group back to work. 

4.3 It’s not just the newly unemployed who are at risk. We do not know what the world that currently furloughed workers will return to will look like. Prior to this crisis, redundancy rates for the over 50s were higher than any other age group.[7] If there are fewer jobs to go back to, there is a risk that older workers will be hardest hit. The Committee should press the government on its plans to put in place specialist support those in their 50s and 60s who are at risk of long-term unemployment as a result of the virus.

4.4 Recommendations:

4.5         There should be a consistent and clear message to employers, job coaches and employment support services that the over 50s are as entitled to support as younger workers. New job coaches should be given training in the specific needs of older workers and encouraged to signpost workers aged 50 and over to other initiatives, like the expanded sector-based work academies. Existing good practice should be built on and shared.

4.6              This messaging should be backed up with robust incentives and oversight of employment support programmes, to ensure that older workers’ needs are being met. For example: government should consider minimum service standards for over 50s on employment programmes, and a requirement for providers to show how their plans will support older workers.

4.7              In addition to these support programmes for the long-term unemployed, there should be early, intensive and targeted employment support available for anyone who faces additional barriers to finding and getting work. Older workers are one of those groups who face a significantly higher risk of long-term unemployment. They should be prioritised for this early and intensive support, based on assessment of their individual needs.

4.8    The government has announced a broad programme of traineeship opportunities available to workers under 25. This must be accompanied by support for all adults to retrain, including the over 50s. The government should invest in training that is tailored to older workers needs to help them to move back into work. This means a large-scale programme of workplace-based training for older and younger adults, including flexible opportunities, and which takes account of the experiences and career histories of older workers.

4.9              There is a need to support continued skills development among older workers to help them access jobs and progress. To do this, adult skills funding should be extended to give all older workers an entitlement to funding for a qualification, or modules, up to and including level 3. This should be advertised widely in HMRC and DWP communications to encourage older workers to take advantage of it.

4.10 Finally, there is evidence in this report that older workers who have lost their jobs are encountering financial challenges as a result of the crisis, which could disadvantage them in their later life. There is a need for further work to understand financial wellbeing among older workers, how the pandemic has affected them, and what options are available to support them where there are challenges, so that appropriate action can be taken. Government should consider the impact of the crisis on pension savings for over 50s, and the potential impact on pension income and pensioner poverty in the medium-term.

5.    Creating age-friendly workplaces will help protect and create jobs

5.1 An inquiry by the Women and Equalities Committee on older workers and employment found that the skills of over a million people aged 50 and over who want to work but are not are being wasted because of discrimination, bias and outdated employment practices.[8] The Committee stated that the business case for an age-diverse workforce is clear but despite this, employers continue to organise workplaces around an outdated, inflexible model that no longer works. Centre for Ageing Better research found that just one in five (20%) employers has had strategic workplace discussions about their ageing workforce and only a third (33%) of employers say they provide support, training or guidance for managers on managing age diversity (Centre for Ageing Better, 2018).

5.2 Based on evidence of what works, the Centre for Ageing Better published a report on ‘Becoming an age-friendly employer’ which includes five practical actions employers can take to improve the way they recruit, support and retain older workers:[9]

5.2.1     Be flexible about flexible working – Offer more forms of flexible working (hours, schedule, location), be responsive to changing needs and support people to know their options.

5.2.2     Hire age positively – Actively target candidates of all ages and minimise age bias in the recruitment process.

5.2.3     Ensure everyone has the health and support they need – Early and open conversations and early and sustained access to support for workers with health conditions.

5.2.4     Encourage career development at all ages – Provide opportunities for people to develop their careers and plan for the future at mid-life and beyond.

5.2.5     Create an age-positive culture – Equip HR professionals and managers to promote an age-positive culture and support interaction across ages.

5.3 Recommendations:

5.4 Employers should adopt the five principles of being age-friendly to create inclusive and diverse workplaces
 

6.    Age bias in recruitment is a barrier to entering employment

6.1 Although age is a protected characteristic, just like gender, race or sexual orientation, many employers don’t treat age discrimination as seriously as these other issues. A core component of being an age-friendly employer is reducing age bias in recruitment. While it is difficult to estimate prevalence of age bias in recruitment, data suggests that one third of those over 50 in the UK believe they have been turned down for a job because of their age, a quarter have been put off applying as it sounds like they’re aimed at younger candidates and two-fifths think their age would disadvantage them when applying for a job.[10]

6.2 Employers should use a structured interview format, with consistent set questions, and a diverse interview panel, to minimise the bias inherent in a traditional interview process – not just in terms of age, but also race, gender, disability and other characteristics. We will soon be publishing findings from a project looking at recruitment and how to ensure that age isn’t a barrier to people finding jobs, and employers finding people. We will share the full results of this project with the Committee.

6.3 Recommendations:

6.4 Ensure stronger enforcement of existing anti-discrimination legislation, especially in sectors where age and gender discrimination appear to be more prevalent.

6.5 Clearly communicate to employers and the public that existing anti-discrimination legislation applies equally to all employees regardless of age.

6.6 Provide specific recruitment advice to employers around best practice, highlighting the positive impact of the activities on other protected characteristics in addition to age. Such as, removing demographic details, use of structured recruitment process to ensure focus is on capability not characteristics of candidate and training of those involved in the recruitment process.
 

7.    Flexible working has been accelerated as a result of COVID-19

7.1 Amongst the challenges and uncertainty, this crisis has produced some potentially positive opportunities. Flexible working is now on everyone’s radar, and there is an opportunity to make it work well by taking a proactive approach. Employers increasingly recognise that flexible working is about more than staff retention and the employer value proposition – it can bring benefits in employee well-being and motivation, talent attraction and addressing issues around the gender pay gap. As the government prepares to consult on extending the right to request flexible working, it should carefully consider lessons learnt from employers as a result of COVID-19 to improve flexible opportunities in the long-term.

7.2 Later this month we will publish research from an 18 month study on flexible working for older workers. During focus groups for over 50s workers, a number of issues were raised around flexible working, including workload, stigma, demotion, and how well flexible arrangements work in practice (especially for part-time work). In separate focus groups, attended by line managers with people aged 50 and over in their teams, many of the same concerns were raised: workload, commercial and service level targets, extra work involved in managing flexible workers, fairness to the rest of the team and setting a precedent that they could not offer across their team.

7.3 Improving flexible working for people aged 50 and over will be most effective if it is done as part of a wider drive to enable more flexible working. Flexible working should be offered to all employees where it’s possible and ‘positive discrimination’ towards older workers can send the wrong signal. In addition, over 50s may feel concerned that they are being side-lined or targeted for redundancy.

7.4 There are however steps an employer can take to support their over 50s to access the benefits of flexible working. These include recognising the different drivers for wanting flexibility and how this translates into different options for formal and informal flexible patterns; ensuring managers are open and proactive about discussing needs for flexibility; and looking at what flexibility is possible across a team.

7.5 Recommendations:

7.6 Bring forward a consultation on allowing all employees to request flexible working from their date of hire by removing the requirement for 26 weeks of continuous service to qualify for the Right to Request.

7.7 Evaluate flexible working practices during the pandemic and highlight best practice.

7.8 Support the development of best practice guidance that can help to clarify and tighten the business reasons that can be used to refuse a request for flexible working.
 

10 September 2020