The Great Resignation Vs The Great Retirement: Where should employers’ attention lie?
What the long-term effects of the pandemic will mean for how, where and when we work are still to be determined; but this does not stop economists, statisticians and organisational psychologists discussing current trends and predictions about the workforce and the workplace. The ‘Great Resignation’, the idea that employees are leaving their jobs at unprecedented rates is one such topic. Although I do not usually interrogate labour market statistics (for this I would recommend the IES briefings by our Director Tony Wilson), the implications that such trends can have for the workplace has led me to look beneath the statistics to see what is really occurring and what the implications are for the policies and practices that employers should embrace.
In the UK, there is little evidence to suggest a ‘Great Resignation’ has occurred. Statistics usually quoted are based on an ‘intention to quit’ (is it the ‘great contemplation’ that employers need to be concerned about?), and although the high statistics have been seen by some as a cause for concern, these are no different to leaving intentions reported pre-pandemic. Similarly, when looking at flows in and out of work, although the latest labour market statistics have suggested that job to job moves (of which 38% were resignations) spiked from the mid-pandemic level, this is not unusual compared to pre-pandemic levels. This differs to what has been happening in other countries (for example, Australia and the USA), and one factor that plays into this has been the success of the Job Retention Scheme and positive employer practices that meant that jobs remained secure even through this period of uncertainty.
However, what has escaped the notice of some is the notion of the ‘Great Retirement’, and the concerning findings that many over 50s are falling out of the workforce. Labour market statistics have shown that there are now 180,000 fewer over 50s in work then before the pandemic, 362,000 were unemployed in September, and 3.5 million people aged 50–64 were economically inactive. Additionally, those with long-term chronic conditions or disabilities may encounter additional barriers when re-joining the workforce, which could result in forced earlier retirement. The concern is that the longer that older workers remain inactive, the reduced likelihood there is of them returning to the workplace — and this is risky for both employers and the economy. So, is this where employers and policy makers need to be focussing their efforts?
Prior to the pandemic, approximately 60% of employment growth by 2060 was going to be filled by over 65-year-olds, but the decline in older workers (especially seen in women over 50) is worrying. In addition, the labour shortages created by both Covid-19 and Brexit could be risky for the economy and create further skills gaps if older workers do not remain in the workplace, especially as other sources of labour supply are dying up. Consequently, ignoring the skills, knowledge and contribution of the older workforce is a high-risk strategy.
There are many benefits for employers in retaining and engaging an older workforce, including: the skills, experience and organisational knowledge and memory they may have, older workers have highly developed communication skills, they can be adept at problem solving, and have unique insights and judgements as a result of their experience, and can work well in teams. It is therefore important that the ‘employment deal’ or psychological contract is maintained with older workers, and that they have the same access to ‘good work’ as the rest of the working age population.
But is this the case? During the pandemic IES undertook research focussing on older workers with long-term chronic conditions in employment and how and in what ways employers supported these employees throughout the crisis. The good news was that employers who were already providing support to older workers with long-term chronic conditions pre-crisis continued to do so throughout the pandemic. However, those who were unsupported failed to recognise the challenges that their employees experienced, which left some feeling increasingly vulnerable. One of the main findings was that the pandemic provided older workers with an opportunity to reflect upon their career. Participants gained a source of meaning and value from their employment (their work not just a financial necessity), and how the level of support provided by organisations, line managers and HR throughout the pandemic factored into any thoughts of early retirement.
The research also highlighted areas where action could be taken to improve the experience of older workers in the labour market. For example:
- Creating a culture that is anti-ageist and anti-ableist — older workers value the same workplace factors as those in other ages (fulfilling work, challenging intellectual capacity, stimulating, used skills, access to training and development), and thrive in organisations that are supportive, have an open culture and where the needs of all employees are accommodated. This is also important to consider in an organisation’s recruitment and selection process.
- Investing in line-management training — both in ‘good line management’ (listening, feedback, empathy and support), but also in topics and policies related to managing long-term health conditions and workplace adjustments. Good line management is at least as important as workplace adjustments.
- As the workforce ages, so does the likelihood of people living and working with long-term health conditions. Employers must take explicit action to support the health and wellbeing of their older workers, use Occupational Health to understand what early interventions can be considered, discuss workplace adjustments, and it may be time for employers to learn from what worked well during the pandemic and how workplace flexibility can be best managed post-pandemic.
- Organisations and policy makers should consider implementing the mid-life career review covering employment, training, health and financial planning. Although there are plans to expand Plan for Jobs to help over 50s get back into work, is the government investing enough to reduce the scarring effects of the pandemic for older workers?
The labour market statistics are important for monitoring employment trends, especially during times of uncertainty. However, employer practices and policy initiatives need to respond appropriately to the trends covering all demographics in the labour market. If the ‘Great Retirement’ continues, the UK labour market is at risk of losing the skills, knowledge, organisational performance and economic productivity that older workers bring to the workplace. Now is the time for employers to focus on what can be done to focus on older workers’ experience of work so that work remains fulfilling for them. If this does not happen, the the UK is at risk of widening the skills gaps in the current labour market.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.