Retirement Age

Guide to Managing without a Retirement Age

BHA has prepared this guide as a service to its members to clarify the law and its implications regarding the abolition of the Default Retirement Age (DRA).

This guide aims to:

  1. Highlight workforce demographics and the impact that this will have on employment patterns in the hospitality sector
  2. Stimulate sector debate over  the employment of older workers
  3. Consider current  barriers to older worker participation in hospitality, with a view to flagging opportunities to retain skilled older employees through redeployment and flexible working
  4. Explain the how to manage without a retirement age

Workforce Demographics: The need to recruit and retain older workers

The facts:

  • By 2020 almost a third of the workforce will be over the age of 50
  • The number of workers under 35 is falling
  • London was the only UK region where there were more people aged <16 than people aged >60 in 2005; Scotland, coastal and rural areas are ageing more rapidly.
  • 48% of the hospitality workforce is under 29, compared with 18% of the economy as a whole
Hospitality (% of workforce 16-29 yrs) Economy as a whole (% of workforce 16-29 yrs)
48% 18%

People 1st’s ‘State of the Nation 2009’

As a response:

  • Pension ages are being raised for men and women to 66 by April 2020 (CSR Announcement, Oct 2010).
  • The Government will phase out the Default Retirement Age from April 2011, with complete removal from October 2011 (BIS announcement, January, 2011).
  • From 2012, employers will be required to automatically enroll all eligible job holders into a qualifying workplace pension and to make contributions into it.

Hospitality and Age: The Big Messages...

  1. Traditional ‘high staff turnover’ employment patterns are not sustainable. Retention needs to take precedence over recruitment.
  2. Sector employers are fishing in a shrinking labour pool, which will be exacerbated by the immigration cap – alternative sources of labour must be identified
  3. The customer base is ageing – employing older workers creates income for a growing market and improved understanding of the ‘grey pound’
  4. The sector needs to attract older workers. Employers that are employing older workers need to increase their visibility, and need to step up and promote the message to others.

Hospitality and Age

The UK’s population is ageing. Life expectancy has now reached its highest levels (79.9 in 2008) and, coupled with the post war baby boom, the nation is getting older. This has two implications for the sector, firstly the growth of what is known as the ‘grey market’ and secondly, from an employment perspective, an older workforce and fewer young people.

People 1st’s ‘State of the Nation 2009’

Age % Gender
16-24 33.5% M F
25-49 49.4% 45.7% 54.3%
50-SPA 13.0%
SPA+ 4.1%

Age Profile – Hospitality Industry - ONS Labour Force Survey Quarter 1, 2010

In future, people may have to work much later or continue some type of paid work into retirement in order to support themselves.

Hospitality is traditionally seen as a career for young people. In bars and restaurants you are an ‘older worker’ at 25. It is physically demanding, often seasonal, has unsocial hours and low pay. Little experience is necessary. High staff turnover is not an issue (some industry commentators suggest the hospitality employment model is predicated on high staff turnover because it keeps the pay down). There is a perception older workers don’t want to do hospitality jobs, and they don’t apply. And when they do, many employers may think they should be creating opportunities for young people who they believe need the jobs more. The nature of the hospitality industry too, with its sheer diversity and overwhelming majority of small businesses (employing less than 15 people), means the sector is not known for progressive employment practices.

As a result there is concern that ‘hospitality’ employers are not responding to demographic change and the need to retain and employ older workers; nor see the business case for doing so.

The business case for employing older workers
Employing older workers delivers improvements in productivity and enhances reputation

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