SMEs not ready for retirement age change
Aug 04 2011
Many small businesses are unprepared for the changes to the retirement age
More than half of the UK's small firms are unprepared for the impending scrapping of the default retirement age, research finds.
A survey conducted by the Employment Law Advisory Services (ELAS) of 1,000 small and medium-sized enterprises reveals that most of the respondents are unprepared for the rising cost of private health insurance, as well as workplace adjustments for staff with disabilities.
As of 1st October the DRA will be abolished, meaning companies will no longer be able to force their staff to retire at age 65.
ELAS head of employment law Peter Mooney says that the majority of small firms are aware of the rule changes and when it was due to take effect, but many still struggle with how to apply the new rules.
He says, ‘It seems many businesses haven’t actually thought through how the new law will affect them in practice.
‘Expensive death-in-service benefits and healthcare benefits are just two examples of how employing older workers will affect businesses. Risk assessments, access requirements and adjustments for disability may also need revision as workforces grow older.’
Comment by Dianne Bown-Wilson
Monday 15th August 2011This article presents a regrettably one-sided view of how things are. In fact, small businesses have long been those who have disregarded the notion of “retirement age” and happily kept on particular older workers for their skills and experience for as long as was mutually beneficial. It is unfortunate that, alongside the raft of other employee-related legislation that may be helpful to those employed by larger organizations, small businesses now have to amend their practices to fall in line with a model that was never really meant for them. But, that being the case, it would be helpful to paint a more positive picture of the implications. For example there are many benefits related to older people working longer including, for small businesses, stability, the retention of skills and expertise and a ready source of on the job training and development for younger workers. How many businesses large or small have actually thought through these and other positive aspects of how the new law will affect them in practice? Pointing out some of these benefits to employers would be more helpful in the current climate than focusing solely on painting an unrealistically negative picture of the changes.
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