One-fifth of employers say that they will have less capacity to hire young workers once the default retirement age (DRA) is phased out.

A recent study suggests nearly half of employers believe that the abolition of the DRA will have a negative impact on their business, with 22% citing the biggest practical impact being a reduced capacity to take on younger staff.

This comes as the latest labour market statistics from the Office for National Statistics revealed that youth unemployment rose by 78,000 over the quarter to July 2011 to reach 973,000.

Transitional arrangements for the removal of the DRA came into force on 6 April 2011, meaning that employers could no longer issue new notifications of retirement using the DRA unless they could objectively justify it as a proportionate means of achieving a legitimate aim.

Of the 125 employers surveyed, 11% had taken, or were considering taking, legal advice on whether or not they could continue to enforce retirement, and 10% were looking at encouraging retirement by offering a financial package.

Article from Personnel Today