Companies across Germany are concerned about the impact the earlier retirement age of 63 will have, according to a survey compiled by market research group TNS, on behalf of Adecco Group. Two-thirds of decision makers from 251 companies voiced concerns that valuable knowledge and know-how will be lost.

According to the policy, workers who have contributed to the German pension insurance scheme for a minimum of 45 years may retire on a full pension at the age of 63, instead of 65. The bill fulfils a campaign pledge by Angela Merkel’s conservatives and their coalition partner, the Social Democrats. 

The majority of respondents (63%) also voiced concerns that there will be tougher competition securing sufficiently skilled personnel, with 58% fearing increasing wage costs due to higher pension contributions. Nearly half of respondents believe that key positions will remain unfilled in future due to the government’s new pension scheme.

Manufacturing and service industries, and companies with more than 1,000 employees, are those who expect to be worst impacted by the policy changes.

Employees who have completed vocational training are those most likely to take advantage of the new retirement age. Lower uptake is expected among unskilled and university educated workers.

In order to mitigate against the impact of the new policy, seven-out-of-10 employers will look to improve training opportunities. Two-thirds of companies will look to financial incentives to encourage employees to work longer.

Other options considered were the ‘reactivation’ of workers who have already retired, and the use of consultants for specific projects. Nearly four-out-of-10 (37%) of companies plan to recruit workers from abroad, while 22% will look to relocate parts of the business abroad. A third of companies plan to increase their use of temporary staff to counter-balance the effects of early retirement.