Decline in job security over the last decade for older workers
Matthew Taylor, the lead for a review of modern employment, has called for the improvement of the quality of work in the UK to become a new “national goal”.
We want more people to be in fulfilling work that supports a good later life and recognise that government, employers and older workers themselves all have a role to play.
We have recently published evidence on what makes work fulfilling for older workers. While the quantity and quality of work is important there is also a third aspect that should be addressed – that of job security.
Findings from the British Social Attitudes Survey reveal that while 92% of people say that job security is important to them only 65% of people agree that they have this in their job. This falls to a little over half of 55-64 year olds (53%) and 45-54 year olds (54%).
This wasn’t always the case. 10 years ago people aged 55-64 were among the most likely to say they had job security, now this age group are the least likely. Over the same period younger workers have actually reported an increase in feelings of job security.
Much of this may be attitudinal – older workers may sense a loss of job security because they expected it in the first place. Perhaps those in their 50s and 60s had more of an expectation for long term and predictable work built in with entering the workplace more recently not expecting job security in the same way.
This loss of job security for older workers runs counter to the general perception that older workers have benefited from the labour market over the last decade. There are now over 1 million people working over the age of 65. The employment rate for people in their 50s and 60s has increased steadily since the mid-1990s and older workers as a whole did not see their employment rates decline following the 2008 recession.
Yet older workers feel increasingly insecure in their jobs. It is important to consider – Why is this, how have changes in the labour market changed this, who is most effected, and what can be done?
Why have feelings of job security declined for older workers?
First and foremost there has been a massive structural shift in the State Pension system. The last decade has seen the equalisation of male and female state pension age, meaning that many more women are now in the labour market who may not have been in previous decades.
Alongside this, other to the benefit system mean that there is a greater requirement for assessments and mandatory job searches if found fit for work. We know that the incidence of long term health condition increase with age, 44% of people aged 55-64 have at least one long term condition, 64% of people who have received Employment and Support Allowance for more than two years are aged over 45.
So we have a sizable cohort of people either working or needing to work who a generation ago might not have been. Many are in secure, fulfilling work but many others are in jobs through financial necessity that do not suit their needs or capabilities.
There has also been a cohort effect. People in their mid-50s today have different experiences from people in their mid-50s a decade ago. Many of today’s Squeezed Middle Aged (identified in our Later Life in 2015 research) are less likely to have defined benefit pensions, are now more likely to have multiple caring responsibilities and are having increased strain placed on their work and home lives, with retirement a long way away.
We have removed the Default Retirement Age, a welcome step that has removed employers’ ability to mandatory retire someone because of their age without justification. From an equal rights perspective, the right thing to do, and one that has allowed many people to work for longer. However there has also been an unintended consequence that many employers feel less able to discuss age or retirement at all with their employers for fear of discrimination. We know that the most beneficial outcomes for both employers and employees are in workplaces with open and transparent workplace discussions about age. Without this, many older workers don’t get the support they need to transition or adapt their job role. All of this may contribute to a perceived loss of security in the workplace.
How have changes in the labour market affected older workers feeling of job security?
The 2008 recession was particularly a problem for younger people entering the job market. For older workers, there was a hunkering down effect – many managed to remain in work, but this was sometimes at reduced hours or in work that no longer suited their needs.
We have seen increasing numbers of self-employed particularly among older age groups. These are sometimes painted as older entrepreneurs, while true of some, this is not the case for the majority. Most work for themselves, often in low pay with the most frequent self-employed job roles being builders, carpenters and taxi drivers. While self-employment in and of itself does not lead to insecurity it can be when combined with other factors. Only 16% of self-employed workers participate in a pension scheme. While employee pension participation has increased with auto enrolment, self-employed or people on multiple low paying jobs do not qualify. For many the flexibility to work when and where they want provides many benefits. But one workers’ flexibility is another’s insecurity.
Although still relatively small there is a growing gig economy, zero hour contracts, agency and other short term contracts. These have allowed for the headline job growth figures over recent years. Zero hour contracts are most likely among the youngest and oldest ends of the labour force. There are benefits to this, flexibility is a key component of an age friendly workplace. But flexibility without security can have hugely detrimental consequences. These contracts often do not provide sick pay or holiday, pension contributions or guaranteed hours, factors which may be manageable for some in the short term but over a life time and over a population pose fundamental threats to a good later life. These put many older workers in the position where they feel uncertain about taking sick leave or their ability to balance work and home lives. We welcome the review being conducted by Matthew Taylor into modern employment and hope it will take into consideration the needs of ageing workforce.
The BSAS also shows an increased intensification of work, with more people effected by stress in the workplace. The UK undoubtedly has a low productivity issue, looking to be addressed in the Industrial Strategy, but low productivity should not be read as low effort. People are working hard, in insecure work, for relatively little reward and doing so in to later ages.
Who is most affected by insecure work?
The other group who have faced the biggest fall in job security over the last ten years are lower skilled workers. In 2005 they were actually more likely to feel secure at work (71%), than higher skilled workers (65%). By 2015 this had reversed (60%, 67% respectively). It may be the combination of age and low skilled workers that have led to much of this job insecurity with the changing structure of the workforce.
Jobs that provide pay but little else can make work feel very insecure. They can also be isolating, making work a purely transactional activity. Our research shows that older workers are more likely to value the social connections, control that comes from stable work. All these are missing from these new structures.
One in five people aged 50-64 are carers. Combining this with work requires guaranteed or predictable hours and flexibility both of which are not possible in many forms of insecure work.
How to make jobs secure and fulfilling to support a good later life
We have published a review of the existing evidence about what older workers want from and value from work. Which has highlighted that security is important in terms of control, choice and influence over how people work.
We are also working with employers through our partnership with Business in the Community. Changes to employer practices can bring about huge benefits, both to individual’s feeling of job security and to employers themselves. Businesses can adapt their contractual arrangements to build in flexibility along with security, advertise good quality part time work and consider adapting job roles.
Through our partnership with Greater Manchester we are learning from people aged 50 and over who are currently out of work or in low paid or insecure work to help them get back into and stay in employment. We will develop potential solutions and hope to pilot and evaluate at least one of these later this year.
There is a role for government too, in terms of widening access pensions, sick pay and care leave for many workers who don’t currently received them. Employers and government need to consider these not as burdens, but as investments to help maintain a skilled and experienced workforce for longer.
We believe that flexibility in the workplace is key but that should not come at the cost of insecurity as many people work for longer to help support a good later life.