More than five million over 50s in the UK could retire early unless they are trained up with new skills to stay on, according to worrying research.
The rapid acceleration of technology and Artificial Intelligence is a leading factor in their decision, it found.
Almost two-thirds of workers nearing retirement age (64%) have considered early retirement, while four in ten (38%) think it is likely that they will retire early.
The research from tech company Multiverse estimates that around 5.3 million workers over the age of 50 are now considering retiring early, providing a large risk to an already strained workforce.
Official figures show there are 83,000 more over 50s in work compared to this time last year but the report warns that more needs to be done to prevent a massive reversal of the figures.
Both ministers and businesses have been urged to ramp up efforts to keep more over 50s in the workforce.
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Earlier this year Chancellor Jeremy Hunt urged older people who dropped out of the workforce in the pandemic to go back to help ease chronic labour shortages.
His “Back to work Budget” last spring included measures to support job seeking over 50s with Midlife MOTs, help to assess their skills and make long-term plans for their work.
The report says that off those considering retiring early, 450,000 are at risk of being forced to do so primarily due to not having the modern day technological skills employers are currently looking for.
Four in ten workers about to retire said they would consider staying in their job if they were given the opportunity to learn new skills.
Multiverse is calling on businesses to invest more in developing the skills of their workers over 50 to prevent them from dropping out of the labour market.
The study shows that almost four in ten (37%) of those who are planning to leave the workforce in the next twelve months would be willing to stay in their current job if their employer offered them the opportunity to go on training courses and develop new skills.
This approach would have the greatest impact on those aged between 50-54 – half of those in this age group say they would consider remaining in their job if offered workplace training.
Training and development has the potential to keep over 50s in the workplace for a significant number of years, the figures show.
If employers invested in their learning, half (50%) of these workers predicted they would remain in their job for up to five years.
Almost a quarter (23%) said they would stay for six to ten years and a fifth of these workers (22%) would likely remain for an additional eleven to fifteen years.
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Gary Eimerman, the Chief Learning Officer at Multiverse, said: “The rapid pace of technological change means there are growing skills gaps right across the workforce and this has one clear result: over 50s dropping out of the labour market in droves. This is exacerbated by a lack of emphasis on the importance of lifelong learning.
“The impact of this is stark: when people are forced into early retirement, businesses and society lose out on knowledge and skills that contribute greatly to the labour market.
Individuals lose out too: working is about more than just making money, and we should ensure the best roles are accessible and remain accessible throughout someone’s working life.
“Our research clearly shows that we can retain more over 50s in the workforce, and even tempt many back in from retirement – but only if employers and the Government commit to a serious plan to invest in their ongoing learning. We have the opportunity to strengthen the labour market, boost job satisfaction for millions of workers, fill the growing digital skills gaps and by doing so we have a great opportunity to strengthen the labour market.”
Economic inactivity – or the number of people who are neither working, nor looking for a job – has climbed by more than half a million people across the working age population over the past three years.
A shrinking workforce means lower growth and higher interest rates as labour supply becomes more scarce.
The Chancellor not only wants to reverse this trend, but get more of the 8.9 million people aged between 16 and 64 who are currently classed as economically inactive in the UK back into work.
During “Older Workers Week” last month Minister for Employment, Jo Churchill MP said the Government is “working hard to get more people into work and tackle inactivity”.
“I urge all businesses to step up and put age diversity at the heart of what they do,” she added.
The increase in people over fifty leaving the job market is one of the great unresolved dilemmas of our age. While many opt for early retirement because they are in a strong financial position or because they want to spend more time with family, others are forced to leave jobs they enjoy because of health concerns or because they struggle to keep up with the skills needed in the modern workplace.
The official figures are stark. From the beginning of the pandemic until early 2023, there are 630,000 fewer over 50s in the labour market, with economic inactivity among 50 to 64-year-olds increasing by nearly 10%. While the rate of economic inactivity in the UK has been dropping steadily since 1986, this trend has reversed for the over 50s since 2020.
Frankly, the issues affecting these workers are being overlooked. Employees from this generation are widely perceived to have benefited from generous pension schemes, rising house prices, and free university education. But this ‘ok boomer’ mentality hides the reality of what so many of these workers are experiencing, and the complex, nuanced circumstances they face – not to mention the major challenges it’s causing to businesses and society.
The exodus of workers over 50 means decades of experience lost from companies and less tax revenue. It hits productivity and the impact companies can have as industries are being disrupted left and right. It also means less money for public services and means more people relying on smaller pension pots and state support. Keeping more over 50s in jobs for longer is therefore beneficial to individuals, businesses and government.
The latest research from Multiverse shows that while many over 50s cannot be stopped from leaving the working world early, hundreds of thousands can.
One area causing many to leave their jobs early is the digital transformation of the workplace. Too many are anxious about how the pace of change is impacting their work.
Significant numbers feel they are deprioritised compared to their younger colleagues when it comes to training and development.
A majority say the formal education they experienced at the start of their career hasn’t been enough to stand them in good stead for the pace of change they are now experiencing.
Four in every ten employees over the age of 50 say they would be willing to stay in their current job if their employer offered them the opportunity to train, develop and learn new skills. And a third who have already taken early retirement say that this is what could tempt them to rejoin a company.
This is the lever available to business leaders and policymakers: offering up-to-date, funded training to people in their 50s and 60s could enable us to transition the great retirement to the great unretirement, and reap the significant rewards that could bring. Not only can this decrease recruiting and turnover costs, it can become a strategic advantage for competing for the best talent.
The latest data shows 450,000 people could be persuaded to stay in the working world. For companies, for individuals, and for society, the potential benefit of keeping them in work cannot be ignored.
Gary Eimerman is the Chief Learning Officer at Multiverse.
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