Organisational background

KMD provides information technology (IT) and consultancy services to both the public and private sectors. The core business consists of products for the local authority market. The company aims to diversify its business so that it increasingly includes projects and outsourcing services for local and central government organisations, as well as for private sector companies. The services provided by KMD include systems management, as well as development and maintenance of IT systems for large corporations and government institutions.

This case study is based on KMD’s branch in Aalborg in the north of Denmark where approximately 1,000 people work. About 60% of employees are men and 40% are women. The average age of employees stands at 44 years and about 7% of employees are above the age of 60 years. The average seniority in the company amounts to 12 years of service. In general, KMD has not encountered any difficulties in recruiting new personnel. In 2006, the staff turnover rate was relatively low at 8.3%.

KMD is a knowledge-intensive business and is renowned as a company that offers lifelong learning to employees. Therefore, the company has a vested interest in retaining its skilled and competent employees and is actively working on ensuring that all employees benefit from good, stimulatingvating working conditions. In terms of age, KMD considers it important to have a mixed workforce comprising young and older workers to ensure the greatest level of expertise.

Social dialogue with the trade unions is cooperative and the unions are involved in initiatives relating to work issues and company policies.

Good practice today

By introducing favourable work arrangements for older workers, KMD aimed to overcome a taboo about ageing workers. In addition, KMD has long been committed to improving health and safety conditions for the company’s employees.

The company has established a formal agreement covering older workers. The idea of such an agreement emerged five years ago when the company’s management sensed that some of its older employees felt insecure and unconfident about their future career in KMD because of their age. Some of the employees had the impression that their level of knowledge in the working area was outdated and therefore feared being dismissed. To overcome this fear, the management wished to make it clear to the older employees that it appreciated their expertise, specialised knowledge and know-how and that it wanted to retain them for as long as possible within the company.

At KMD, every employee has a personal development interview with management once a year. During these interviews, the employer and the employee discuss topics such as: how the current work year has been for workers; job satisfaction levels; requirements for further training or education; satisfaction with salary; and relationships with colleagues. As part of the company’s ageing policy, in the year when the employee turns 55 years of age, some other topics are added to the interview relating to the employee’s career plan for the years leading up to retirement. They also discuss how and when the employee wishes to retire and whether they would like to have a special agreement with the company.

Special working time for older workers

From the age of 58 years, employees are given the opportunity to enter a special scheme designed for older workers. If employees accept to participate in the scheme, they can reduce their working hours by 20% which, in practice, means that they can take one day off a week. The employee’s salary is reduced in line with the reduction in working time; however, older employees continue to receive the same amount in pension contributions from the company as before. Therefore, the financial situation during retirement is not affected by the agreement. Older workers also have the guarantee that they will be paid for the next four years, no matter what happens. In other words, even if the company may have to lay off workers, older employees benefit from a wage guarantee until the age of 62 years. Reaching this age, the employee will retire without further notice. Nevertheless, this does not mean that older workers are obliged to retire at the age of 62 years. If older employees wish to renegotiate the terms of their scheme, they are free to do so and a new agreement can be concluded between the employer and the employee. Up to now, 60 people have been covered by such an agreement on these terms.

The management is also open to changing the content of work if an older employee finds the job mentally or physically demanding. For instance, they may be assigned other work tasks that are less strenuous or be transferred to another department.

Planning for retirement

KMD, in cooperation with the trade union, also offers special seminars for older workers on retirement options. During these seminars, employees are asked to reflect on how they wish to spend their time following retirement and whether they can afford these follow through on these wishes at a certain retirement age. Representatives from the trade union and pension providers are present at these seminars to enable the participants to calculate their future financial resources during retirement. Older workers thus find out how much money they may earn by postponing their retirement for a number of years.

The company also has a ‘senior club’ which invites former employees who have already retired to visit the company and take part in a dinner with giving a talk or other kinds of entertainment twice a year. `Such arrangements also give retirees the opportunity to follow the development of their former workplace and to keep in contact with their former colleagues. KMD regards this initiative as a positive investment because the retired employees are ‘good company ambassadors’, as they can spread the word that KMD is a company which cares about the well-being of its employees. Retired employees also receive Christmas presents every year from the company.

Health and well-being

KMD has long been committed to improving health and lifestyle at the workplace on an ongoing basis. For instance, the company owns a fitness centre which can be used free of charge by its employees, who can receive treatment and advice from physiotherapists and occupational therapists if desired. The company also hires cooks to make healthy food in the staff canteen. Furthermore, KMD is a smoking-free environment, and employees who have had a hard time trying to give up smoking have received help and guidance from professionals hired by the company.

Moreover, KMD has just finished yet another special health promotion project. In total, 50 employees took part in this project aimed at improving their lifestyle and health. The workers who were offered the chance to participate in this course had significant health problems, such as obesity, high blood pressure, poor physical fitness, over-consumption of medicine or respiratory problems. For half a year, dieticians and exercise therapists guided the participants in improving their lifestyle and diet. First results of the project show major improvements in relation to the lifestyle and health of the participants. On average, each participant recorded a weight loss of 5.5 kg.

As the company wishes to retain its skilled and competent employees, the company has introduced a procedure for dialogue on sickness-related absenteeism. The company intends to remain in contact with workers taking frequent or lengthy sick leave and to retain personnel who, for any reason, are forced to take long-term leave. In cooperation with the trade unions, KMD has formalised the procedure in such a way that, every time an employee takes sick leave for more than 14 days, the employer will talk with the person about why they are sick and what could be done to improve the situation. This procedure is not meant to monitor the employees but to send a clear message that the company is interested in helping the person to return to work. In this regard, positive effects have been observed in terms of reducing the level of sickness-related absenteeism among staff.

Further information

Contact: Bjarne Flyvbjerg, email: bjf@kmd.dk

Website: www.kmd.dk