In this week's blog: Research has shown that people over the age of 50 face both a higher risk of redundancy and find it harder to find a job when unemployed. Here's why employers need to take steps to have proactive conversations with older workers - not target them for redundancy.
One minute, Luke was a happy, productive employee, meeting all of his targets and even earning occasional bonuses.
The next minute, he was targeted for redundancy.
And soon after that, he began to suspect that the only reason for his "redundancy" was that he was older than his co-workers.
You see, Luke was in his 50s….
It's a disturbing trend I hear about too often. Anecdotally, some companies appear to be proactively making older people redundant.
But redundancy is a very blunt instrument.
If you need to make cuts, you might have better options beyond simply culling your older staff.
In fact the trend is not just anecdotal. Research has shown that people over the age of 50 genuinely do face a higher risk of redundancy.¹
I’ve seen it amongst my own peer group, with several of my most capable friends becoming “olderpreneurs” after being made redundant.
Deliberately discriminating against older workers in this way is, of course, illegal. But companies probably find roundabout ways to do it, for example targeting people with long service records.
Cost is almost certainly a big factor.
Because workers in their 50s are more experienced, the perception is that they command higher salaries than their up-and-coming, younger colleagues (although this appears to be a bit of a myth. In the UK, it’s people in their 40s² who earn more than everyone else).
So when companies are trying to make cuts, experienced older employees are often the first to go.
The problem is, this is bad for both employees and companies.
For employees – because how would YOU feel if you were told you were no longer needed at work just because of your age…
…at the exact moment when you were finally in a job you had aimed for all your career and were earning well? In fact, you were finally putting good money into your pension and maybe even beginning to help your children?
The stability you had earned is unceremoniously ripped away, replaced by fear and uncertainty.
Worse: If you are made redundant in your 50s, chances are that you are going to languish in unemployment for longer than your younger colleagues.³
It’s bad for companies too, because firms need a range of ages and experience.
Older employees have decades of knowledge to impart, and are often keepers of the institutional memory. When they go, valuable resources, skills and networks are lost.
And frankly staff in their 50s aren’t even really that old! Many are at the very top of their game.
The good news is that none of this has to happen.
If HR could talk to these employees before deciding on redundancy, it might be easier (and more cost-effective) to retain them on revised terms.
For example, HR might discover that Luke would have been perfectly happy to go part-time and spend more time with his grandchildren, rather than leave work entirely. He was beginning to think about winding down anyway.
In previous roles, I've been able to avoid redundancies, simply because I knew that some older staff members hoped to retire within the year!
I knew – because I talked to them.
So why aren't these conversations happening everywhere?
We need a framework to be able to talk to employees in their 50s about their future plans and whether they want to gradually wind down their role, but no such framework currently exists.
Many companies are scared of raising these issues with their employees for legal reasons.
That’s exactly why we need to develop a good structure and guidelines for it. Perhaps it can be part of the Midlife MOT I’ve talked about before – the regular check-in with your employees, to help them consider their future career paths once they hit their 40s.
To make it work, the conversation must be open enough to draw out and really hear your employees’ desires and concerns.
The more information you have about their plans for the next few years, the easier it will be to find arrangements which suit both parties.
Proactive redundancy of older workers isn't only morally questionable - it's usually the wrong tool for the job, and often leads to bigger problems down the line.
For example, although Luke struggled to find a new job because prospective employers told him he was "too experienced"...
…after a few months he chose to become a self-employed consultant, and now he earns more money in less time whilst working from home.
Meanwhile, his former employers are still struggling to fill the void left by Luke's redundancy with the same kind of expertise and competence he showed.
Just desserts – or the unfortunate result of a misguided policy? You be the judge.