Less Unemployment but More Inactivity
Business Voice, November 2004
The level of unemployment level-as measured by those looking for work but can’t find it- remains low at 4.7 per cent. But those economically inactive-who see themselves as unable to work- have increased to 2.53 million. The National Audit Office calculates that low employment among the over 50’s costs the economy between £19bn and £30bn a year through lost output, taxes and welfare payments. Much of this is accounted for by claims of incapacity to work through ill health, injury, sickness, etc.
Isn’t this a bit odd? More people feel unable to work through ill health and yet the nation’s general standard of health has improved. In the old industrial age, we worked in coalmines, shipyards and factories. Is it more dangerous to work in offices, call centres and supermarkets? Much of the incapacity to work is stress related. How many teachers, doctors, managers and other professional employees negotiate ill health ‘early retirement’ for this reason? But why should ‘stress’ be regarded as a permanent condition? Don’t men and women recover from it, even when they are over 50?
A number of factors seem to be accounting for this. First, there is the issue of definition. How can ‘stress’ be measured? The manager that allows staff an easy life is not going to have a problem with staff stress. But the successor who wants improved performance is likely to be charged with ‘bullying’, sending many under-achievers off to their GPs. How can their allegations of sleeplessness, irritability, inability to concentrate be disproved by medical evidence? I guess not many.
Then there is the issue of ‘informal’ ageism. In this day of celebrity culture and an excessive emphasis on ‘youth,’ older colleagues often feel left out of it by their younger staff. They feel marginalised and vulnerable to any corporate re-structuring that may be introduced. The result is they explore every possibility to quit the company on terms that are best favourable to them. Early retirement through ill health often offers the best deal.
But the major factor that accounts for economic inactivity among older workers is the model of management we now operate with. The greater majority of us, whether it is in the private or the public sectors, have to work according to performance targets. These we negotiate with our line managers-at all levels in the organisation-and we are expected to achieve them. This makes us feel we are under constant pressures to perform.
If these targets were one-off to overcome temporary corporate crises, they would be manageable. But when these targets are a permanent feature of our jobs we feel at risk. What happens if we don’t achieve our targets? Insecurity becomes the order of the day. In this day and age, we are all soccer players. If we don’t score goals we get dropped from the team. There are no more jobs for life and working our way up the corporate ladder. Secure futures have been replaced by performance-related anxieties.
The design of organisations reflects this new reality. The old hierarchies no longer exist. In their place, there are now business units, cost and profit centres, and designated earnings streams. The introduction of these in organisations ranging from hospitals and schools through to universities and multi-national corporations has affected our attitudes to our jobs. The focus is always on achieving the short-term results. University professors can no longer take three months holiday in the summer to watch cricket. They now have to make sure they hit student recruitment targets and their departments ‘break-even’goals. School teachers have to hit examination pass targets while even civil servants are at last being forced to perform according to more transparent performance criteria.
All this means modern organisations are greedy. They no longer simply require our nine-to-five commitment. They expect much more of us than that. The emphasis on performance means we can hardly ever switch off. At work and at home we are constantly thinking of how we can do things better. On holidays, are our colleagues achieving the departmental goals while we are away? Thank goodness for the mobile phone. It means that we can always keep in touch-24/7 for fifty two weeks of the year.
And so it is no wonder by the time we reach our early fifties, we are more than likely to have had enough. Exhaustion kicks in and we need a break. The endless pressures and the long working hours lead to asking ‘meaning of life’ questions; particularly if one of our colleagues has had a stroke or a heart bypass operation. Even prime ministers are prone to this self-reflection!
But it is no longer a case of early retirement but more a matter of wanting to do something different. Even young people today think of their full-time working careers ending in their fifties. The pension crisis does not seem to be changing their minds. They have the expectation that they will have to give their hearts and souls to their employers until they reach their fifties when they will then be able to do something else.
For some older people it is studying for an OU degree, for others back-packing around the world and for others, pursuing a creative hobby or interest that has been put on the back burner for the past twenty years. But from an economic point-of-view this is still wasted talent.
We pride ourselves in Britain of having a flexible labour market. But it is still not flexible enough. I know of many ‘retired’ engineers who would like to teach science in local schools on a part-time basis. But the teacher unions will not let them. There is still rampant ageism in many companies with HR policies that assume staff become brain dead on their fiftieth birthdays.
If we are to tackle the high rate of economic inactivity among older workers, the focus has not to be just on ageism and the ‘manufacture’ of stress but also on the value of government and consultancy companies’ obsession with short-term performance targets. With future skill shortages, the gains derived from these may be counter-productive to the longer-benefits of keeping talented older employees in the labour market. Employee fears of pension short falls is unlikely to do the trick.
© Professor Richard Scase