With a large rise in the number of people working beyond the traditional retirement age of 65, companies have to work out how to structure their organisations to take advantage of older workers' skills and experience, the report said.
According to the study of 100 senior HR professionals, 59% said they are not making progress in recognising older workers' talents and skills. And only half said their organisation understands the changing needs of employees across the professional lifecycle.
According to the latest figures from the Office of National Statistics, more than one million workers in the UK are over 65. This is up from 450,000 in 2001.
Yves Duhaldeborde, director of employee surveys, Towers Watson, said: "The sharp increase in older workers has led to a large proportion of employees with over 40 years' experience.
"With no default retirement age a significant proportion of the growing over-65 population will continue to want, or need, to work.
"These older workers can add huge value to organisations in terms of experience and skills but problems can arise when companies are ill-prepared to meet the needs of this group of workers, who may require more flexibility in their working life."
Older workers more enthusiastic
The study also showed employees over 50 are more enthusiastic, resilient and connected to the goals of their organisation than younger generations.
However, it also found older workers feel their employer lets them down over training and personal development, with an acknowledgement that this area is often reserved for younger workers.
Arvinder Dhesi, director of Towers Watson's talent management practice, said: "HR teams can make a significant difference to the value that these employees bring to the business by identifying where these skills would make the biggest difference within the business."
Click here to download a copy of a joint HR magazine and TalentSmoothie report on developing a strategy for an ageing workforce.
