Ageing Workforce – Business Impact
15 December 2009
Recent research has predicted that the number of pensioners at work will double to 1.8 million by 2019, with the increase expected in employees working past retirement age being due to them believing that they can’t afford to retire.
It is believed that that employees are going to face either saving more for their pension from an earlier age or having to work longer to avoid the impact on their pension entitlements and their standard of living.
The impact on businesses is likely to include increased premiums for medical insurance cover and on a more morbid note the potential for an increase in death in service benefit claims. In addition if the need to make compulsory redundancies was to arise then redundancy payments would be significantly high due to a long length of service coupled with the employee’s age. This could mean that several employees are likely to be close to reaching the maximum Statutory Redundancy Limit of 30 weeks (current weeks wage limit is £380.00), with notice periods also likely to be high due to long length of services.
However, employees with a long length of service, typically understand the inner workings of the organisation and their organisational knowledge and experience is often invaluable.
HR Solutions encourages companies to review the demographics of their organisation, and to build in contingency plans for loss of knowledge and experience if and when long serving employees leave, as well as to be aware of the statutory entitlements of making long serving and older employees redundant.