UK retirement Essay example

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Increased life expectancy must lead to a rethinking among British employers, as an older workforce does have other requirements and quests as the younger generation. The British government reacted by announcing that it is no longer possible to force anyone to retirement when reaching the age of 65 (Ageuk.org.uk, 2013). This essay is discussing whether an ageing workforce is more a threat or an opportunity for British enterprises. One of the biggest threats facing CEOs nowadays is definitely the increased health care costs of their senior workers. Furthermore, for many people in the UK, retirement is simply not affordable because of having not enough money in the pension. However, if an enterprise does invest in their equipment by making it more ergonomic it can have a great influence on the worker’s body and therefore for the health care costs. In addition, older people have far more working experiences than women or men in their 20ies, which is a huge market advantage. Consequently, older people are surely no longer a threat for a British CEO.

Certainly, one can argue that the higher the age of a worker, the higher the health care costs will be. Because older people mostly have too less physical activity, accidents happen more often and they usually need longer to recover. A study has shown that health care costs for a person over 65 are roughly three times the costs for someone between the ages of 30 and 50 (Loch, Sting, Bauer & Mauermann, 2010). Companies are often afraid of investing in facilities where only seniors are profiting. In particular smaller companies without a human resources team tend to be slower in reacting to the changing needs of their workforce which leads to an explosion of additional costs (Peacock, 2010).

Furthermore, a fifth of all workers in the UK could not even afford retire, which means they work as long as they are physically able (Christie, 2013). People in the UK generally expect to live 19 years after they retire. The problem is that they have enough savings for only seven years, whereas Americans for example have enough money to ensure 14 years (Christie, 2013). As a result, retirement is for many people a distant dream and they have little choice about carrying on working until they have enough money in their pension (Phillips, 2013). The situation is getting worse by the day: HSBC’s Future of Retirement report revealed that Britons have the worst retirement prospects of any of the countries involved, worse even than countries like Egypt and Mexico (Taylor, 2013). British CEOs must therefore be prepared on an ageing workforce.

Fortunately, there are possibilities to overcome these threats. The chair of the Chronic Disease and Wellbeing council, Cary Cooper, said at the World Economic Forum: “Employers have to find a way of ensuring that there is a good match between the skills and experience of the [older] individual and the job itself” (Peacock, 2010, para. 4). In fact, this is the traditional way of solving this problem: As soon as one gets too weak for physically demanding jobs, they could be deployed to another job within the company. However, there are better solutions as proved by the case of BMW (Loch, et al, 2010): It was predicted that in 2017, the average age of BMW’s workforce would be 47 years. Therefore, the German automobile company settled up a pilot project having the average age of a year 2017 mix of employees. The improvements especially had ergonomic effects on the worker’s bodies. After one year pilot phase, the result was unexpected: the productivity of the line increased by 7%, equalling that of a line with younger workers. This case shows us that workers themselves can make the most
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