Compulsory retirement age, is the age at which employees in particular positions, by law are no longer eligible to continue working. Since this practice is unlawful, many countries have instituted laws to discourage it.
However, the truth is that despite these measures, aged workers continue to experience discrimination; for example, they are least preferred for job opportunities and are the most likely victims for retrenchment.
Most people who retire between the ages of 65- 80 are still energetic and able to carry out their duties effectively if granted an opportunity to continue with their jobs (Wallace, 2004, pp.15). Their retirement is a loss of productivity not only to the country but also to the retirees themselves.
The retirees lose a source of income and those who would not have developed an alternative source of income prior to retirement may face a financial crisis. The loss of income leads to the retirees cutting down their expenditure considerably in order for them to be able to manage financially.
For instance, they may cut down leisure and entertainment expenses. A classical example is when a regular tourist overseas no longer tours his/ her favorite destination after retirement (Lynch, 2012, pp.12)
Retirement also comes along with health repercussions. An increase in stress leads to hormonal derangements which may be fatal. There is also an increase in musculo- skeletal and cardio vascular diseases among retirees due to reduced exercise after retirement.
Workers between the age brackets 65- 80 are still productive and this is the age at which they have gained enough experience in the field to offer the best services. Their continued employment will also ensure a continued supply of labor force to continue with nation building.
Objectives for the study include: To find out whether the removal of the compulsory retirement age will lead to increased productivity and economic growth, to find out whether it is cheaper to recruit fresh labor force after retirement of previous labor force as opposed to maintaining the retired labor force.
In focus of the first objective, some employers argue that elderly employees, especially 65 years and above tend to be less productive and less efficient and yet so highly remunerated. The elderly workers are less hardworking and equally less enthusiastic as a result of senescence.
On the other hand other employers say that elderly employees are well experienced in the particular field and for this reason, they will be more productive in the same field.
This study will shade more light on this issue and hence assist employees make informed decisions when they wish to improve the productivity of their firms (Wallace, 2005, pp.34).
For the second objective, it is aimed at establishing which is more economical between hiring a fresh employee and maintaining the employee who has exceeded age 65. Recruitment is an expensive process in regards to vacancy advertisement.
It can be quite time consuming on the part of the employer during the hiring process since several interviewing sessions need to be carried out to determine the suitability of each candidate to the vacancy. With regard to this, maintaining elderly workers becomes a better option than hiring.
On the other hand, elderly employees tend to be less productive and yet highly paid due to their experience in the field. Achievement of this study objective will shade more light on which way is more economical (Djos, 2010).
The most suitable approach to this study is a structured questionnaire administered to various employers to fill in and the data collected analyzed and conclusions drawn.
The questions asked will cause the employers to divulge information regarding the performance of their employees (Aunders, Lewis and Thornhill, 2009).
For example, the employer will gauge the performance of all his/ her employees and give a feedback. Performance of the employees who are less than 65 years of age will be compared to that of employees who are above 65 years of age.
The data collected will be analyzed to determine, between the two groups, which one is more productive.
The respondents will also be required to give the cost of recruitment and hiring new workers to replace the aged employees, which will be weighed against high wages and salaries paid to the aged employees. This will give an insight into which of the two scenarios is more economical to the organization.
Other relevant questions in relation to the viability of employing people above the age of 65 years would be asked through the questionnaire and the responses analyzed appropriately.
The health status of former employees who retired after reaching age 65 would also be sought to determine if there is any relationship between retirement and these ailments (Whitehouse, 2006).
Literature Review
As the older generation is trying to extend its life in the work place, there is bound to be a change in the workforce demographics and productivity. Questions also arise on the issue of what costs the firms will incur; in terms of worker compensation due to health risks.
Studies are proving the fact that; older workers tend to have a lower productivity ratio compared to the younger workforce. Companies and especially the private firms tend to have a bias toward the younger people because of their output capabilities (Gardner, 2008)
The older people are associated with time loss and high costs of maintenance. The Demographers predict that the trend of the rising aged work force will continue to be witnessed for the next fifteen years; this is the case not only in Australia but globally.
The percentage of the old work force has risen from 11.2 in 1992 and is predicted to be at 18.7 by 2020.
Firms are retaining the old work force, because of the experience they bring to their companies; this also eliminates the huge training costs they would have to spend on new recruits (Pransky, 2005)
Prevalence of work disability increases with the age of the workers. These disabilities tend to limit the productivity of the workers. In some cases the productivity is reduced by 22 percent compared to 4 percent within the younger labourers.
The legislations that extend the working years only create other forms of problems to the already congested population. Unemployment rates are bound to sore globally as the young graduates are denied vacancies (Biddle, 2004)
Conclusion
The aged workforce, bring about a professional skill forged with time. Their skill is unmatched by the younger generation.
It is however important to note that with age, productivity of the aged people is minimal in other professions. The young people bring about an enthusiasm that develops competition, quality and maximum output.
Reference list
Aunders, M., Lewis, P. &Thornhill, A 2009, Research methods for business students, Prentice Hall, Harlow.
Biddle, J 2004, Older workers and workplace injuries. Brown and Company Publishers, Boston.
Djos, M 2010, Sailing out of retirement: living the dream, Cambridge University Press, Cambridge.
Gardner, J 2008, Return to work incentives: Lessons for policymakers from economists, Harvard University Press, Cambridge.
Lynch, C 2012, Retirement on the line: age, work and value in an American factory, Cornell University Press, New York.
Pransky, G 2005, A comparison of older and younger workers, McGraw Hill, New York.
Wallace, A 2005, ‘Mandatory retirement at age 65 in question. (Law)’. (Brief Article): An article from Sask-Business, Harvard University Press, Cambridge.
Wallace, M 2004, The aged work-force, John Wiley & Sons, West Sussex.
Whitehouse, E 2006, Retirement Income-systems in 53 countries, Morgan Kaufman Publishers, San Francisco.