Age discrimination is getting pricey — and employers are learning the hard way. Amid skyrocketing payouts for ageism cases, companies that think they can quietly shuffle their older staff out of the office might want to think again. It turns out that with experience can come a bigger-than-expected price tag, the Financial Times writes.

Ageism is burning a hole in employers’ pockets. The average compensation awarded in successful UK age discrimination cases shot up a staggering 624% in 2022-23 — up to GBP 103k, compared to just GBP 14k the year before, UK employment law firm Fox & Partners note. Why? Because more and more high-level execs are taking their employers to task for trying to push them aside in favor of younger hires.

This isn’t just a one-off issue. With a quarter of the OECD population expected to be over 65by 2050, older workers aren’t going anywhere anytime soon. But many companies are still trying to reduce the number of older workers, who often pull larger salaries and have accumulated enough clout to influence firms’ directions. A growing number of senior employees are coming forward, arguing that so-called “redundancy” plans are simply thinly veiled excuses to replace them with someone younger and cheaper.

The legal landscape here is tricky. Unlike other protected characteristics, age discrimination laws allow for some measures to encourage pushing out older workers — particularly if an employer can prove that a retirement policy serves a “legitimate social aim,” aka making room for younger workers. Still, many older professionals argue that being pushed out at their age effectively ends their careers, making it nearly impossible to find a comparable role elsewhere.

The real cost of ageism is more than just lawsuits. Most age discrimination cases don’t even make it to tribunal — many are settled early, and often quietly. So while the rising payouts might grab attention, they only scratch the surface of a much bigger problem. “Only a tiny minority have the resources to pursue legal action, and even fewer succeed,” Emily Andrews, deputy director for work at the UK’s Centre for Ageing Better.

Age discrimination isn’t just an ethical problem, it’s a business blunder. Companies that actually value and retain their older employees get major perks: lower absenteeism, higher loyalty, and a gold mine of experience. They also get to reap the benefits of multigenerational workplaces, which Andrews notes often make for the most effective teams. Plus, in an era where AI is advancing quickly, human skills like emotional intelligence — something that older workers have in droves — are fundamentally irreplaceable.

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