Did you know you could be breaching the new age discrimination rules by sending an ageist birthday card to a colleague?
Did you also know that an employer could be found guilty of failing to protect staff and even contractors from being discriminated against on the grounds of age?
Under the new rules it is illegal to discriminate against employees, both current and prospective, on the grounds of age and compliance is vital.
But compliance is not enough in itself. Employers should document their efforts in the shape of a formal policy which must be monitored to test its effectiveness on a regular basis.
For Aegon UK, this has involved the development of an internal communications plan for all staff, telling them what they should know about the new legislation, and assessing the impact it has on different aspects of the business and on its staff in general.
Aegon UK director of human resources Ian Tomlinson-Roe says the company is also considering incorporating aspects of the new rules into its diversity training e-learning package.
As for monitoring its effectiveness, he says it will form part of the company’s equal opportunities monitoring processes.
Nationwide is a business, which has been proactive about anti-age discrimination for some time.
A spokesman for the mutual says: “Nationwide has had an explicit commitment not to discriminate on the grounds of age in its diversity policy since the mid-1990s and we were a founding member of the Employers’ Forum on Age, which is a network of employers set up in 1996 to campaign for flexible retirement.
“Recruiting and retaining older workers is a key aim of our age diversity strategy.”
Nationwide adopted a more flexible approach to retirement in 2001, allowing staff to retire at 70 and extended the limit last year to 75. In addition, in June 2005, the society changed its procedures to enable older workers to stay on automatically, whereas previously they had to request to do so.
Nationwide has 2,166 staff aged over 50, which is 13 per cent of its workforce, while over-60s total 225 (1.3 per cent of the workforce), and there are 38 people over-65s (0.2 per cent of staff).
On the cost of the changes, the spokesman says: “We have forecast that the number of employees wanting to stay beyond 60 will rise to 600 over the next 10 years so if that happens, it will probably cost us an extra £1m per year. The cost is likely to rise further as at the moment Nationwide has relatively few people entering the retirement age range.
“However, we believe that the additional costs will be more than offset by the benefits of employing older workers.”
IFAs have the reverse issue, with younger recruits more likely to be discriminated against than older people.
On the one hand the IFA community, which, depending on the statistics you read, has an average age around the early 50s, and is desperate for new blood but, on the other hand, many IFA firms have been sceptical of the value of new entrants who they presume are unlikely to have any real experience of the life events for which their clients require advice and planning.
Bankhall marketing director Richard Howells says: “Here, we have a set of regulations which say you should not discriminate but consumers automatically discriminate when dealing with advisers.
“If you are married with a mortgage and two or more kids, the last thing you want is an 18 to 20-year-old coming into your home. Young advisers have to work much harder to gain the trust of clients.”
Allen & Overy employment, pensions and incentives law associate Wendy Robinson acknowledges the temptation for firms to recruit older advisers.
She says: “When interviewing, firms will be looking for someone with a very certain personality fit. They would not necessarily want someone fresh off the block but someone with the square edges knocked off.”
Equally, she acknowledges the difficulty of managing client expectations: “What happens if I have a client and I take my new superstar and the client says they are still wet behind the ears?”
But she warns that employers have “as much an obligation to educate clients as well as staff”.
This may be more difficult to stay when it comes to self-employed IFAs.
Robinson advises individuals to be aware of seemingly innocent comments about age around the workplace, which could contribute to a legal claim.
She says: “It is about educating people’s hearts and minds but it is difficult because people feel that ageism is acceptable.”
The Nationwide spokesman says there is a strong correlation between employee satisfaction, customer satisfaction and the success of any business.
He says: “Research shows us that the more engaged and committed that employees are, the better the service that members receive. Furthermore, the research found that fair treatment at work is one of the main determinants of employee commitment.
“By giving employees more choice over retirement, Nationwide hopes to boost the trust and commitment that employees show to the organisation, which in turn will positively influence customer loyalty.”
Advisers should take a close look at not only their perceptions of their peers but also their products and their clients’ perceptions of themselves.
Tomlinson-Roe says: “Bear in mind that the needs of the at-retirement age group are very different to the way they were even 10 years ago. Fifty-somethings certainly do not see themselves as old and they are in many ways one of our more dynamic customer segments.
“From a wider society perspective, the age discrimination legislation reflects this trend. As people are living longer and working longer, they will be looking for more flexible solutions to help them fund their retirement or perhaps top up their income from part-time work. As an industry we need to bear this in mind with our response to customers.”