A survey* of nearly 200 human resource management professionals undermines the argument that there are benefits to business when workers are forced to retire at 65.

The survey found that almost two-thirds (64%) of employers who operate a mandatory retirement age (MRA) agree that it can lead to a loss of valuable knowledge and talent.

Among those organisations which have removed the mandatory retirement age, more than three-quarters considered it a positive step for their organisation and said it helped maintain valuable skills and their organisation’s customer-facing image and reputation.

The research, undertaken jointly by TAEN – The Age and Employment Network, and the Employers Forum on Age, comes a little more than a week before the British High Court will reconsider the legal challenge to compulsory retirement referred back to it by the European Court of Justice.

The High Court hearing of the case brought by Age Concern and Help the Aged (sent back by the European Court of Justice) will begin on Thursday 16 July 2009. It calls on the British Court to consider the need for a National Default Retirement Age (NDRA).

The survey highlights comparisons between those with and without a mandatory retirement age (MRA) policy and concludes that the advantages of having an MRA have been exaggerated, while organisations that have dispensed with an MRA are managing well and have discovered genuine business benefits in their decision.

The results undermine the case that there are strong business benefits in having an MRA, pressed on the Government by the Confederation of British Industry (CBI) when the Employment Equality (Age) Regulations were introduced almost three years ago.

Chris Ball, Chief Executive of TAEN – The Age and Employment Network, says: “The survey shows that the arguments against repeal of the NDRA do not correspond with reality. Most employers, even those that have mandatory retirement ages, say it is of no help in dealing with under-performing employees. Yet this was a major reason for the national default retirement age when the regulations were introduced.

“Similarly, while organisations with mandatory retirement ages say it helps their succession planning, those who have got rid of mandatory retirement say they get on fine without it.

“Altogether, these results question the much vaunted business benefits of mandatory retirement - advanced by the Government and the CBI.  Employers who have abandoned it are experiencing real advantages. When we look at these organisations, we find the dire warnings by ageist commentators are shattered shibboleths.”

Denise Keating, Chief Executive of the Employers Forum on Age, says: “This survey confirms the EFA’s experience that we are on the verge of a major shake-up in the way we manage people as the population ages.  The concept of retirement is outdated; it does not reflect how we live our lives today.

“Many people make a good contribution at work and only short-sighted organisations would risk removing talented people just because a milestone birthday is approaching.  Interestingly, even those organisations with an MRA would allow people to work on – unfortunately, the majority of them appear to then apply a further level of discrimination by only allowing this to happen ‘sometimes’. 

“Many employers, from SMEs to very large and complex organisations, have taken the view that there are no insurmountable barriers to removing retirement ages and are in fact experiencing significant benefits.  We have to work with the rest to overcome their fears”.

Notes to editors:

* TAEN and EFA surveyed 198 human resource directors and senior managers from a cross section taken from a database of national HR professionals.  An email questionnaire was completed in June 2009.  Eighty-five per cent of respondents operated with a default retirement age. Fifteen per cent had no fixed retirement age.

Key Findings:

Of those operating with a mandatory retirement age:

·         64% of employers said that operating with a mandatory retirement age could lead to a loss of talent and knowledge to the organisation.

·         37% also said that the National Default Retirement Age created risks from demographic factors – i.e. population ageing and the declining birth rate.

·         45% considered it a lost opportunity to be an employer of choice among older and mid-life workers and

·         30% were conscious of it having an adverse effect on their organisation’s image.

Of the respondents who have no fixed retirement age the following benefits were identified:

·         76% considered it kept valued people in the organisation

·         85% said it maintained valuable skills within the organisation

·         52% believed it had improved morale among employees

·         52% said it has provided positive role models for younger employees

·         44% said that it had Improved their company’s customer facing image

The Employers Forum on Age (EFA) is the leading campaigner on age issues in the workplace. The EFA is a think tank of employers established in 1996 to eradicate ageism in the workplace. Since then it has helped provide advice, training and support for workplaces that want to eradicate age discrimination from their employment practices and helped prepare them for the new legislation.

Denise Keating became Chief Executive of the EFA in May 09.  Denise was initially involved in creating the Forum in 1994 with a launch in 1996; she has been a Board Director and Trustee since 2002.  Denise has a wealth of experience in diversity plus significant commercial experience across a number of different sectors.  Previously, at BGL Group, Denise realigned HR and Communications to deliver efficient services that improved business performance.  As a Board Director for Craegmoor Healthcare, Denise was accountable for HR, IT & Clinical Governance.  Craegmoor employs 7,000 staff and manages care homes nationwide.  Prior to this, she held senior positions at Marks & Spencer and Nationwide Building Society where she worked on change programmes that positioned both organizations as an employer of choice.

TAEN – The Age and Employment Network works to promote an effective job market that serves the needs of people in mid and later life, employers and the economy. TAEN is a network organisation.  Its members include a wide range of organisations from across the labour market, including employers, professional bodies, unions and many others. TAEN informs and advocates for effective age management policies at all levels and is an important source of information on everything relating to age and employment issues.  Additionally, TAEN works with leading research, labour market and other bodies in the UK and internationally to promote innovative employment practice and age diversity.

Chris Ball is Chief Executive of TAEN – The Age and Employment Network. He is an expert in employee relations and has written and researched on work issues, both as an academic researcher and for the London Evening Standard, The Guardian and various other papers. A Chartered Fellow of the CIPD, he holds a doctorate in industrial relations from the London School of Economics and is a member of the international judging panel for the AARP International Innovative Employers’ Award.