Employment Practices Insurance: Combatting age discrimination

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Age discrimination, or ageism, in the workplace involves treating an applicant or employee unfavourably because of their age. The Equality Act 2010 legally protects people from discrimination, promoting a fair and equal society. More specifically, the act forbids discrimination against any worker with regards to recruitment, promotion, reward and recognition, redundancy, and vocational training.

This article discusses the growing issue of age discrimination, the cost of claims and ways organisations can prevent ageism.

The Growing Issue of Age Discrimination

As more people live longer and healthier lives, many have plans to work well past the age of 65. As such, older employees now represent a large proportion of the UK workforce. In fact, the number of people over 50 and working has increased from 31% in 1992 to 42% in 2020, according to a report by Legal & General Retail Retirement and the Centre for Economics and Business Research. Moreover, the same report predicts that 47% of everyone over 50 will be part of the UK labour force by 2030.

With the workforce continuing to grow older, data suggests there may be more instances of age discrimination. Currently, more than a third (36%) of UK adults report experiencing workplace discrimination, according to a survey by HR software company CIPHR Ltd. Of those, 11% feel their age has been the discriminating factor.

The Cost of Age Discrimination Claims

Age discrimination claims can be costly for employers. According to government statistics, the average age discrimination payout following an employment tribunal was £26,612 during 2019–20.

Additionally, employers may lose valuable employees to ageism. As such, it’s crucial to value the skill and experience that older workers can bring. However, it appears that some organisations may not be valuing their workers enough. According to a survey by recruitment company workingwise, 61% of older employees don’t feel their employer values their life experience sufficiently. Furthermore, 52% of employees reported seeing less experienced colleagues being promoted over them. When worker dissatisfaction is left unaddressed, employees may feel pushed out or choose to leave. Consequently, organisations may lose employees who possess valuable knowledge and experience while incurring the cost of recruiting and training new talent. Age discrimination may also cause companies to suffer from a decline in employee motivation, resulting in decreased productivity and reduced work quality.

How to Prevent Age Discrimination

In addition to the cost of reduced worker productivity and loss of experience, age discrimination can lead to legal, regulatory and settlement fees. Since these costs can be detrimental to a business, organisational leaders should act to prevent age discrimination in the workplace.

The following are suggestions for combatting ageism:

• Access organisational culture, practices and policies—By evaluating current culture, practices and policies, organisations can eliminate outdated assumptions about older workers and foster a multigenerational culture that rejects age stereotypes and embraces employees of varying backgrounds.
• Examine recruitment practices— Recruiters and interviewers should be trained to avoid ageist assumptions, such as the belief that an older candidate will not remain on the job for long. Applications should also eliminate age-related information—such as date of birth or when a person graduated—and interview panels should include people of all ages.
• Include age in diversity and inclusion efforts—As with existing diversity and inclusion initiatives, workforce training is critical to educating employees about ageism in the workplace. Since age discrimination often goes unreported, spreading awareness may increase the likelihood that employees who witness instances of ageism will report it.
• Respond to claims immediately—Ageism complaints should be handled swiftly and seriously. Investigations should include interviews with all parties connected to the complaint and a review of other relevant evidence.
• Purchase employment practices liability (EPL) insurance—EPL insurance provides cover for employers when employees allege discrimination based on age and can limit employer liability if an age discrimination claim is filed.

Conclusion

As the workforce continues to age, business leaders should be proactive in recognising and preventing age discrimination in the workplace. To discuss your current risk exposure or the level of cover our Employment Practices Insurance can provide get in touch with our business insurance team today.