SMEs are increasingly concerned about rising operational costs due to the scrapping of the default retirement age (DRA), according to research from multi-sector recruiter Search Consultancy.

The research shows almost half (46%) of SMEs rank operational costs as their main issue, followed by performance issues relating to an ageing workforce (42%) and the risk of tribunal claims and industrial action (32%).

A quarter of all UK firms surveyed estimate operating costs will be upwards of £50,000 and over a third claim they are unsure what the impact will be financially.

Grahame Caswell, chief executive of Search Consultancy, says: “As businesses of all shapes and sizes have been gearing up for the abolishment of the DRA over the past six months, our ‘Don’t Mention the Pension’ research shows that the impact on the bottom line is still the major concern.

“Coupled with the introduction of the Agency Worker’s Directive next month, this is a double whammy for HR directors who are still reeling from dealing with the likes of parental leave, pension reform and the Bribery Act.

“Despite all this, only one in four businesses view the scrapping of the retirement age as needless red tape, with more hailing it as a welcome end to age discrimination.”