CWS 3.0: November 2, 2011 - Vol. 3.31

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World: Planning for an older contingent workforce

Last week, the Dutch government put forth a draft bill that would allow temporary employment contracts to be extended for older workers beyond the current limit of two renewals, which is indicative of a broader dialogue being conducted in many countries to defer retirement age and make it easier for people to work beyond the age of 65.

Pensions and retirement are sensitive subjects in the region and there have been angry responses to the topic in various countries. In Italy, discussions became extremely heated over Prime Minister Silvio Berlusconi’s proposal to increase the pension age to 67 by 2026 as part of his economic reform package. Italy’s EU partners are demanding it raise the retirement age before agreeing to support Italy’s bonds. Similarly, in Greece, violent protests have been prompted by the government’s austerity measures which include significant pension reform. Further, more than a million people flooded the boulevards of Paris last year to protest French President Sarkozy’s pension revisions.

Throughout most of Europe, the normal state retirement age is 65, although this is under revision in a number of countries aside from Italy.

While retirement ages are relatively similar around the world, the proportion of people working beyond retirement age varies quite significantly. According to the OECD, 20 percent of the U.S. workforce is aged 65 to 69 compared with 10 percent in the U.K., 3 percent in Germany and only 1 percent in France.

As demographic trends in Europe create an increasingly elderly workforce, employers will need to reconsider their employment policies, workforce planning and working conditions. And, in particular, those who are responsible for managing the contingent workforce will be at the forefront of this new paradigm. With an inevitable squeeze on pension payouts, many elderly people will opt for semi-retirement and choose to continue working on a temporary basis rather than a permanent one.

Despite age discrimination legislation in many countries, older workers can still find it more difficult to be considered for a position in the first place. Job ads describing the working environment as 'dynamic' or 'lively' will give the impression the employer is looking for younger employees. At interview, employers quite often give the impression that older workers are over-qualified, too experienced and not exactly what they had in mind when they advertised the post. Despite evidence to the contrary, there is also a fear that older workers will take more sick time off. But shaking off these stereotypical attitudes is only part of the story. There’s a broad range of policy issues that companies should be considering in order to be prepared for an older workforce:

  • Offer more flexible working patterns
    • Flex-time
    • Job sharing
    • Part-time working
    • Home working
    • Consulting
    • Seasonal shifts
    • Compressed work week
    • Projects/special assignments
    • Reduced hours (with reduced pay)
    • Job rotation
    • On-call work
  • Don’t assume older people don’t want to learn new skills
  • Conduct cultural audits
  • Provide training on age awareness to all workers, not just to managers
  • Take advantage of older workers’ experience to mentor younger colleagues
  • Set organizational age diversity targets
  • Prove to older workers that you understand their needs by equipping offices with ergonomic equipment, proper lighting and provisions to accommodate employees with vision and hearing impairments
  • Don’t make exceptions for older workers. Deal with unsatisfactory performance in the same way you would for any employee
  • Take care to train on new technologies. Some older workers may be less familiar with new technology or software, particularly if they are returning to work after a gap in employment
  • Consider how to make your company retirement policy more open and flexible
  • Provide elder care vouchers and nursing home care subsidies, as many older workers will have dependent families
  • Take care not to indirectly discriminate against older workers by using other redundancy criteria, such as part-time working, when selecting employees for redundancy
  • Create a positive environment that enables employees to move downward as well as upward into less/more demanding roles

As skills shortages become more prevalent, those employers seen to embrace age diversity proactively among their permanent and contingent workforce will have a competitive edge over their peers. Employers are getting help from different quarters. The Joseph Rowntree Foundation for example has created a number of categories to define the different aspirations and situations of older workers as well as suggestions for appropriate policies that both employers and governments should have in place to support these workers.

To the policies proposed by the Joseph Rowntree Foundation, we might also add the development of regulations to support the healthy development of contingent labor, as this will undoubtedly provide an essential framework to contribute to the retention of older workers in the workforce.

The workforce may be getting greyer, but it is also becoming healthier than ever and living longer. While this creates new human resources challenges, it also provides enlightened companies with new opportunities.

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