With three-quarters of employees anticipating working beyond 65, the number of Britons working past the official retirement age is expected to treble by 2017, posing some serious challenges for employers.
Research by benefits and HR consulting firm, Aon Consulting, suggests that this means that three million people aged between 65 and 70 will be in the workforce in ten year's time, compared to some one million today.
But just a quarter of respondents said they would carry on working because they wanted to, whereas over half (53 per cent) believe that they will have to keep working thorough financial necessity – something that could have some serious implications for levels of employee motivation and engagement
With this mindset, some older employees could be resentful about their need to continue working, which is not conducive to good job performance, Aon warned.
Employers will therefore need to focus on maintaining motivation by ensuring that older workers are given interesting and fulfilling jobs and full access to the training they need.
An ageing workforce also poses, legal risks. With workers now protected against age discrimination, employers will need to tread carefully to avoid potentially expensive claims from older staff.
For example, consideration must be given when choosing criteria for redundancy selection and employers cannot, on the grounds of age, deny employment, refuse to provide training or retire someone early without objective justification.
The research further highlights that organisations will need to devote more resources to IT training, especially up-skilling their older workers. For the older workers themselves, if they have been able to avoid embracing technology until now, they will have to do so if they want to continue to have intellectually stimulating jobs.
"An ageing workforce is inevitable with an estimated three million people likely to be working beyond their retirement age within 10 years time, " said Jon Beaumont, HR Consultant at Aon Consulting.
"This could be a huge benefit to organisations, so long as the key challenges are tackled sooner rather than later. Businesses used to think that older workers could not drive companies forward but this old fashioned attitude needs to shift."
Indeed, as the research points out, there are many positive aspects to having an older workforce. Older workers are more reliable and take less time off for sickness with official UK data from 2004 showing average absence rates of 2.4 per cent for workers aged 60 and above, compared with three per cent for the 25-34 age group.
They are also more likely to have a more responsible attitude to work than their younger colleagues and their extra work and life experiences make them ideal to perform mentoring roles.
"Age should not be seen as a barrier," Jon Beaumont added.
"There is a vast pool of mentally agile people, with great work and life experience over the age of 60 and industries will be missing a trick if they do not capitalise on their productive potential. Effective performance management will be the key discipline in making an ageing workforce into a competitive advantage."