Over-50s leading a “great resignation” have shrunk the UK labour market and driven up inflation, the boss of John Lewis has said.
But Chairwoman Dame Sharon White says that these early retirees could be enticed back into the workplace with flexible working options, in a bid to plug the huge talent crisis facing the country.
Speaking to BBC Radio 4’s Today programme, Dame Sharon discussed the exodus that has seen around a million people leave the working population since the pandemic began, contributing to an increase in inflation and wage growth.
Fewer employees in work means businesses are facing pressure to raise salaries, which in turn is pushing up prices. It is also having major long-term implications for businesses struggling to fill jobs, Dame Sharon added.
“One area that I think has not had enough attention is what has happened in the jobs market over the last 18 months,” she told BBC Radio 4.
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“Regardless of what is happening coming out of COVID, if the labour market is that tight, if we continue to have far fewer people in work – or looking for work – you have inevitably got more inflation and wage inflation.”
Data from the Office of National Statistics shows that approximately 1million people in the UK have left work since the start of the pandemic in March 2020, with retirement the most popular reason given by people aged between 50-70.
On this, White said: “We now have 1million fewer people in work. Some think about it as the ‘great resignation’. I think about it as the ‘life reappraisal’ because this is predominantly people in their 50s.”
She added: “There isn’t a business in the UK that is not finding it very difficult to recruit at the moment because there are so many more jobs and far fewer people looking for work.
Dame Sharon, who previously headed broadcasting regulator Ofcom, added that businesses and the Government need to work together to encourage over-50s to go back to work.
Flexible retirement options or retraining over-50s for a different occupation could be solutions, she said.
“I guess I would encourage any Government to really think much more about how do we encourage more people back into work,” she said.
“Maybe it is flexible retirement to allow more people to combine more time outside work but more time in work. One million people out of the labour market has profound long-term implications and I’d like there to be more of an open debate.”
A wave of staff leaving their jobs to seek better pay and job satisfaction, or to retire altogether, sparked the “great resignation” after national lockdowns.
Almost a fifth of UK workers said they expect to leave their job for a new employer in the next 12 months, PwC found in May.
But Bank of England boss, Andrew Bailey, said this month that workers should refrain from asking their employer for inflation-matching pay rises to prevent inflation becoming “embedded”.
Retirees heading back to work
Dame Sharon is not alone in her thinking about the importance of getting retired staff back into the talent pool. Recent research found that many retired workers have already started heading back into the jobs market, as the cost-of-living crisis forces many to reconsider how far they can stretch their savings.
Rest Less, a digital community and advocate for people in their 50s, 60s and beyond, published research which found that economic activity levels amongst people aged over 50 are at their highest levels since the pandemic.
Rest Less analysed the latest labour market data from the Office of National Statistics and found that economic activity levels – a measure of people in work or looking for work – amongst people aged over 50 are now at 10,974,000 – their highest level since January to March 2020, just before the pandemic devastated the jobs market.
Official labour market data appears to be showing the first signs of a return to the long term trend of more economically active people aged over 50 – a decades long trend which was reversed by the pandemic*
What this means for HR
It’s a sad state of affairs when those who have earned their retirement after decades of hard work must consider going back into employment to make ends meet. It’s also deeply unfortunate that many who have recently gambled on the opportunity of early retirement have had their dreams curtailed by circumstances beyond their control.
And as many of these older workers head back into the talent pool, there are issues that HR should be aware of when considering recruiting from this new cohort.
Mitchell Roberts, Employment Law Specialist at law firm Taylor Wessing, said: "Employers considering applications from older workers looking to re-join the workforce need to make sure that those candidates are treated in the same way as others applying for the same job. It will be particularly important for employers to avoid stereotyping older workers and to ensure decisions are based on objective merit.
"Care should also be taken where an employer considers rejecting a candidate based on speed of work and use of technology as these are typically linked to allegations of age discrimination. Employers should ensure that they look to use age-neutral criteria when assessing the best candidate for the job and keep in mind that providing the required training and affording the appropriate time to get to grips with the role will be expected."
However, anyone from this cohort applying for new jobs should not be viewed with any sense of pity. Although they are re-entering the talent pool because of financial circumstances, they will bring a wealth of experience and skills to the workplace.
If handled correctly, the return of older workers could be a win for employers – an opportunity to solve talent problems, and benefit from years of experience and accumulated wisdom at the same time.
