Ray of hope for older workers in gloomy labour market stats

Today’s labour market stats make for pretty gloomy reading.

In the three months to June, the rate of unemployment for all aged 16 and over increased 0.3 percentage points on the quarter to 4.2 per cent. Experts had been predicting there would be no change. The number of people in employment fell by 66,000, whereas economists had forecast a 75,000 increase according to the Financial Times. And the number of people who were inactive because of long-term sickness increased to a record high of almost 2.6 million.

Tony Wilson, Director at the Institute of Employment Studies, described the figures as “pretty dire” with June’s data particularly “awful” following two months of more encouraging news. We don’t appear to have hit a recession yet, but it remains a distinct possibility while low growth continues.

Amidst all this doom and gloom, there have been some rays of sunshine:

• The employment rate for 50 – 64s is improving, rising from 70.6 to 71.2% over three months while falling for 35-49 year-olds.
• While the unemployment rate for workers 16-64 and 35-49 rose, it fell for 50-64-years-olds.
• The economic inactivity rate for 50-64 year-olds continues to go down, and at a faster rate than for other age groups.

However, things remain worse for older worker employment than before the pandemic. Compared with data from Jan-March 2020, today’s statistics show employment rates for those aged 50+ are still lower (71.2% compared to 72.4%). There are also 219,000 more workers aged 50-64 who are economically inactive than there were before the pandemic. But overall the trends for older workers are looking more positive and hopefully will continue through the year.

The reasons behind this uplift in older workers’ employment remain unclear and may depend on whether you see your glass half empty or half full. Part of the reason is simply demographic change. But most of the reasons are to do with increased employment among this age-group. The government has been drawing attention to the benefits of older workers throughout 2023 in a way we have not seen before. Could that be helping to encourage employers to put aside misconceptions and prejudices against older workers?

We have also seen two recent pieces of legislation, the Flexible Working Act and the Carer’s Leave Act, which will benefit older workers. It’s far too early to see the benefit of this legislative change in the data but maybe it has helped employers understand the crucial role of older workers now and into the future.

Better pay might also be a factor. Regular pay rose by 7.8% for all workers from April to June, the highest annual growth rate since comparable records began in 2001. But median monthly gross pay for 50-64s has risen more (9%) than for workers in other age-bands over the past year. A gloomier explanation for the rising employment rate for older workers is that it is a result of necessity with the continuing cost-of-living crisis forcing more 50-64-year-olds back into work.

Whatever the causes, if we want the positive trends for older workers to continue, and for levels of participation for this age group to return to where they were pre-pandemic, then more needs to be done by government to support people back into work.

We know that employment support currently does not deliver for older workers. The government’s Work and Health programme, for example, helps fewer than one in six participants age 60+ back into work. New figures out today also show older people are not benefitting as much from other support on offer with 55-67 year olds making up just 5% of attendees to free skills bootcamps, aimed at retraining workers in new, sector-specific skills, even though the age group represents 25% of the working age population.

A new national programme of employment support with a tailored approach specific to the needs of older workers is needed to make sure that the latest labour market stats grow into something more hardy, substantial and sustainable. We would also like to see more businesses and organisations grasp the opportunity and do more to ensure they are an attractive and welcoming employer to older workers.

Around two dozen employers every month are signing up to our Age-friendly Employer Pledge, committing to taking at least one action a year to improve the recruitment, retention and development of older workers. Actions can include looking in detail at what barriers they may have to employing older workers, how they can offer flexible work that works for their employees or ensuring that their recruitment processes aren’t biased.

The Centre for Ageing Better has developed new guidance to minimise age bias in the recruitment process. The Good Recruitment of Older Workers (Grow 2) toolkit, jointly branded with the Chartered Institute of Personnel and Development (CIPD) and the Recruitment and Employment Confederation (REC), will be available at our website from September 5.