Age bias and the demographic time-bomb
- Andrew Stirling
Andrew Stirling FCBI is a first-line Risk Manager in the NatWest Group Chief Operating Office. Becoming a Fellow of the Institute in 2024, Andrew’s extensive financial services industry experience straddles a period of substantial cultural and technological workplace change. Gaining a Masters in Personnel Management with Information Technology back in the internet’s fledgling days, in recent years he completed the Chartered Banker Advanced Diploma in Banking and Leadership in a Digital Age, receiving the 2022 Sir Torrance McGuffie Prize.
In a series of three blogs, Andrew gives his own personal view of some of the implications of multi-generational groups for banking organisations, both for employees and customers. He identifies why maintaining the engagement of those at more advanced stages in their careers is so critical. Advocated is that the input of multi-generational expertise can be invaluable to the successful embedding of future skills, including technologies like AI.
Despite the virtues typically associated with older employees referred to in my previous blog, age bias is the most commonly reported form of UK workplace discrimination and cited as, “The forgotten DE&I factor.” [1][2] Research of the general workforce shows people claiming to have first started experiencing age bias at work at an average age of 41, and only 29 among UK IT and tech workers. [3] This is worrying given technology’s influence in today’s banking organisations.
To disregard Gen X and Baby Boomers in particular (many of the same individuals who are banks’ most liquid customers), with the preconceptions of not being digitally savvy or attuned to today’s society, has the potential to disengage a material proportion of an organisation’s workforce and derail any notion of a fully inclusive working culture. People are not only less likely to demonstrate inclusive behaviours when they sense exclusion themselves, among older workers will undoubtedly be those of other protected characteristics. A narrower representation of views in organisations will impair the quality of decision-making and stifle innovation and productivity, logic which is also generally acknowledged by the Bank of England. [4][5]
A stark projection by 2040 is nearly 1.5 million more retirees from the UK workforce than joiners, significantly constraining the availability of talent and expertise. This is concerning given the financial services sector’s existing low retention rate of employees beyond the age of 55, employment in the 56-64 age group lagging over 6% behind the UK average. [6] Also identified is a much broader problem with steps needing to be taken globally at governmental level to promote the employment and skills of older people and a rethink on pension provision. [7]
Retirement remains a distant aspiration for many owing to the demise of final salary pensions and increasing commonality of non-linear careers. Most people today can expect to be economically active until much later in life. [8] An employee in their early 50’s still has potentially a third of their working life in front of them and it is wrong to form preconceptions that such individuals are just waiting for retirement or perhaps a ‘package’, instead ensuring that those who wish are given exactly the same opportunities for development and progression as younger colleagues. Enhancing workplace diversity, this enables not just fulfilled careers, but longer-term financial goals to be fully met as well.
A positive development is an increasing number of financial services companies, including my own organisation, NatWest, establishing networks or working groups that recognise a need for more focus on age and multi-generational awareness. Also encouraging is a global survey of 83% of business leaders seeing a key role for multi-generational workforces in the growth and longer-term success of their organisations - 68% of whom would purposely design teams of mixed age. [9]
Further reflections on how future skill requirements can support and align with a multi-generational workforce are discussed in my next blog
[1] Springhouse Solicitors. ‘Ageism is the UK’s Most Common Form of Discrimination at Work’ (2024). Available at: https://www.springhouselaw.com/knowledge/ageism-is-the-uks-most-common-form-of-discrimination-at-work (accessed 22 December 2024).
[2] Birch, S. ‘Ageism in the workplace - the forgotten DE&I factor’ (2022). Available at: https://sustainabilitymag.com/diversity-and-inclusion-dandi/ageism-in-the-workplace-the-forgotten-de-i-factor (accessed 22 December 2024).
[3] Sevilla, C. (2019) in Stypinska, J. ‘AI ageism: a critical roadmap for studying age discrimination and exclusion in digitalized societies’. AI & Soc 38, 665–677 (2023). Available at: https://doi.org/10.1007/s00146-022-01553-5 (accessed 22 December 2024).
[4] Raj, S. ‘Ageism in the workplace - the privilege of being the ‘right age’ (2022). Available at: https://blogs.lse.ac.uk/businessreview/2022/02/03/ageism-in-the-workplace-the-privilege-of-being-the-right-age/ (accessed 18 December 2024).
[5] Suss, J., Angeli, M. and Eckley, P. ‘Gender, age and nationality diversity in UK banks’. Bank of England Staff Working Paper No.929 (2021). Available at: https://www.bankofengland.co.uk/working-paper/2021/gender-age-and-nationality-diversity-in-uk-banks (accessed 22 December 2024).
[6] ‘Staying ahead of the game’. Available at: Chartered Banker Magazine, Issue 1, 2024 ed. (accessed 22 December 2024).
[7] Jones, R. in ‘Shifting sands’. Available at: Chartered Banker Magazine, Summer 2023 ed. (accessed 22 December 2024).
[8] Roy, A. (2019) ‘Managing an Ageing Team’. Available at: https://www.charteredbanker.com/resource_listing/knowledge-hub-listing/managing-an-aging-team.html (accessed 22 December 2024).
[9] AARP Survey: ‘83% of Global Executives Agree Multigenerational Workforce is Key to Growth and Success’ (2020). Available at: https://press.aarp.org/2020-8-5-AARP-Survey-Global-Executives-Agree-Multigenerational-Workforce-is-Key (accessed 22 December 2024).