Living longer, working longer: How to further activate an ageing workforce

There’s a demographic shift sweeping Europe: people are living longer – an additional 3.1 years compared with 2002 – and, hence, working longer – an average of 36.5 years in 2022 compared with 34.9 years in 2015. While we see an increasing number of people aged 55 and over engaged in the workforce, research shows that older workers face significant labour market barriers. In order to harness the potential of this demographic shift, we need to improve the working conditions of older workers in Europe.

Living longer, working longer

As people in Europe are living longer, the expected duration of working life is also on the rise.

As a result, we see a big boost in the employment rates of men and women aged 55–64 across the EU in little over a decade.

However, there are substantial differences in the employment rates of people aged 55 and over across the EU.

So, while we are witnessing an increase of older workers engaged in the labour market, this difference in employment rates across the EU suggests that there are certain barriers that still need to be removed.

Eurofound research shows that older workers face significant challenges, including gender disparities, ageism and the ongoing need for upskilling. If EU policy can do more to improve working conditions for older workers, then we will be better able to harness the potential of Europe’s demographic shift.

Sweden setting standards

The exemplary approaches taken in Member States such as Sweden have the potential to inspire more widespread improvements in the working conditions of older workers. Sweden stands out for its high employment participation of this age group, with an employment rate of 77.3% among 55–64-year-olds, 1 leaving the EU average of 56.2% for women and 68.7% for men far behind. 2 Why do people in Sweden work so much longer? The success is attributed to factors such as high levels of job satisfaction, valuing the skills of older employees and flexible pension schemes.

Women more likely to quit work prematurely

Although we are in 2024, gender inequalities persist. 3 Older women often leave employment prematurely, resulting in a 25.2% lower average pension payment for women over 65 in 2022 compared with men in the EU. 4 The reasons behind early labour market exits by women include discontinuous career histories, fewer opportunities for career development, and family obligations.

No matter what gender, people over 50 might experience ageism when trying to re-enter the labour market after a period of absence or attempting to change jobs. Managerial and co-worker attitudes, company culture and age stereotypes all play a role. Although all Member States have legislation prohibiting discrimination based on age in employment (having transposed the Employment Equality Directive), ageism remains a reality.

Workplace innovation also tends to push older workers out of employment due to changing skills requirements, particularly hard skills such as digital competencies. 5 Fortunately, several Member States are promoting learning opportunities for older people to fill such skills gaps.

Learning opportunities crucial for older workers

Good practices from Sweden emphasise sustainable work, promoting living and working conditions that motivate people to engage and remain in employment. One of the more positive outcomes of the COVID-19 pandemic was that telework became more accessible in 2020 and 2021. This, in combination with an increase in the number of companies facilitating employee training, are positive trends fostering increased participation of older workers in the labour market.

The European Skills Agenda, part of the European Pillar of Social Rights, has a target of a 32% increase in learning activities for adults aged 25ؘ–64. Greece and Italy, to give just two examples, are actively working towards achieving this objective by deliberately facilitating training opportunities for older workers. For instance, the Greek government offers vouchers for upskilling and retraining in high-demand industries, which benefit older workers especially to adapt to workplace innovation. Such vouchers enable beneficiaries to choose from a variety of training programmes in high-demand sectors, emphasising digital and green skills, for example in information technology. In Italy, learning and development opportunities for older workers are implemented at regional and local levels by means of individual action plans that evaluate training needs to create customised training and work experience for older workers.

Focusing on the ageing workforce, the European Pillar of Social Rights offers a framework to guide Member States in adapting their labour markets to new developments such as digitalisation and workplace innovation, while promoting fairness and solidarity between the working generations. The application of its principles is seen in Malta, for instance, where the National Pensioners Association supports several coding bootcamps made specifically to appeal to older workers to further hone their digital skills. Retirement systems in Germany, Luxembourg and Romania facilitate the transfer of knowledge between generations in the workplace. With such systems, workers close to retirement age stay in employment but reduce their workload until switching from full-time employment to full-time retirement. This approach enables older staff to maintain a sense of purpose and encourages unity among the working generations.

Embracing demographic change

The European Commission launched a demography toolbox in October 2023, outlining policy options for Member States related to intergenerational justice, non-discrimination and gender equality. It also promotes the use of financial tools such as the Recovery and Resilience Facility and the European Social Fund by Member States to manage demographic change.

Although Europe has seen a steady increase in the numbers of older workers active in the labour market, more can be achieved. Keeping this demographic engaged in the workforce is a multifaceted and multidimensional endeavour; company culture, attitudes, workplace practices and job quality are key factors. Member States have developed initiatives at national, regional and local levels aiming to equip older workers for changing workplace demands. And, in those areas where older workers are still challenged, such as ageism and skills upgrading, the European Pillar of Social Rights and the demography toolbox have mobilised mechanisms aiming to make a positive change. Therefore, while we should celebrate living longer and healthier lives, employers have a responsibility to facilitate learning opportunities and promote intergenerational solidarity within the workplace.

As identified in Eurofound’s work programme, demography is one of the mega-drivers of structural change in Europe – both a challenge and an opportunity that will remain high on the EU agenda in the years to come. Improving the working conditions of older workers is just one step towards ensuring a more fair, efficient and equitable future.

• Eurofound: Ageing workforce
• European Commission: Commission sets out tools to manage demographic change in the EU
• European Commission: European Skills Agenda

See also - Working paper: Keeping older workers engaged: Policies, practices and mechanisms

Image © liderina/Adobe Stock

Footnotes

• 1

  Eurostat, (2022), Employment rates by sex, age and citizenship (%).

• 2

  Eurostat, (2022), Employment and activity by sex and age – annual data. 

• 3

  Kalev, A. and Deutsch, G. (2018), ‘Gender inequality and workplace organizations: Understanding reproduction and change’, Handbook of the Sociology of Gender, pp. 257–269. 

• 4

  Eurostat (2022), Gender pension gap by age group – EU-SILC survey. 

• 5

  Egdell, V., Maclean, G., Raeside, R. and Chen, T. (2020), ‘Age management in the workplace: manager and older worker accounts of policy and practice’, Aging and Society, Vol. 40, No. 4, pp. 784–804.