The scrapping of the default retirement age is not a clear cut issue for retailers

The Government is proposing scrapping the default retirement age of 65 from October next year. This would require retailers to provide a clear ‘objective justification’ for retirement. While retailers have often been champions of recruiting older staff, this change in legislation is also a worry to some.

Tom Ironside, director of business environment at the British Retail Consortium, believes there are some benefits - such as reducing recruitment costs by allowing retailers to keep experienced employees longer.

However, he admits retailers do have concerns. “It must be possible for individuals to go on having a straightforward and dignified end to their working lives,” he says.

Policy changes

For retailers such as B&Q and Sainsbury’s, which operate without a compulsory retirement age, it will mean no change. However, the majority of retailers will have to make significant alterations to their HR policies in order to comply.

Retailers also need to be careful about offering flexible working to older staff to avoid accusations of discrimination. “You have to decide if you are an employer that does flexible working for everyone or if you are sticking to the flexible working rules, which is for parents and carers,” says Rachel Dineley, employment partner at law firm Beachcroft.

The HR director of one high street retail chain says the removal of the retirement age will complicate matters - especially for a business like hers that has many long serving staff.

“These people are doing a loyal job for us but there is an underlying concern. There comes a point where these people are getting on in years, their stamina becomes less and their personality traits can become more pronounced,” she says, adding: “It’s a real issue for us with the more senior positions because you are trying to manage retirement sensitively and without damaging someone’s dignity. The default age gives you a platform from which to manage the whole situation.”

Dineley agrees it is a challenge all retailers face. “Those are very difficult messages to give because they are very personal messages but it is a case of having robust performance management of everyone,” she says.

This means all line managers must have performance management high on their priorities.

“There are some line managers that are very good at being upfront and there are those that shy away from confrontation but we can no longer put these sorts of problems in the ‘it’s too difficult’ box,” says Dineley. “HR directors can’t wade in and sort these problems out for line managers any more.”

Ironside agrees that performance management is key. “Performance management techniques will need to be good to get the best out of people and to make sure they don’t carry on working when it is not in their interests,” he concludes.

Retirement matters

  • Retailers need to consider
  • Employment contracts
  • Redundancy packages
  • Performance management policies
  • Pensions
  • Managing disability issues
  • Language used