Company-level policies prove effective in age management

A recent report on ageing and employment, from the European Commission, considers measures designed to help maintain and improve the employment opportunities of older workers. Based on a study of 11 EU countries, the report offers important empirical findings that demonstrate how some companies are beginning to address the issue of managing an ageing workforce.

Background

The European Commission’s Green Paper on Confronting demographic change: a new solidarity between generations (COM (2005) 94 final, 309 Kb PDF) outlines the social and economic problems faced by the European Union in light of demographic developments. In terms of an ageing workforce, it is expected that the number of people aged 65 years and over will increase by 52.3% before 2030; at the same time, fertility rates are not expected to grow apace as employees reach retirement age. To accommodate this situation, the EU is committed to raising employment rates to over 70% – an objective which will necessitate policy measures aimed at encouraging older workers to remain in employment. Older workers, however, face a number of structural disadvantages that makes their labour market position somewhat precarious. They tend to be poorly qualified, possess outdated skills and work in production-related industries: all of these factors may make older workers more susceptible to periods of unemployment.

For this reason, the findings of a recently published report on managing an ageing workforce, Ageing and employment: Identification of good practice to increase job opportunities and maintain older workers in employment (1.22Mb PDF) (AEIGP), represent a timely contribution to an important EU issue. Based on 41 company case studies in 11 EU Members States, including the Czech Republic, Finland, France, Germany, Hungary, Italy, Lithuania, the Netherlands, Poland, Portugal and the UK, the report offers a valuable understanding of the ageing problem. It provides an overview of developments in the countries surveyed and makes recommendations for maintaining older workers in employment. The emphasis of the report is largely on an offensive rather than a defensive approach, which entails protecting older workers from possible redundancy while in employment. Such an approach involves effective and ongoing training, in the context of lifelong learning, aimed at keeping employees’ skills and knowledge up to date.

Age management circumstances

The AEIGP report maintains that age management can be observed within a variety of contexts and involves a broad range of measures. Companies’ interest in managing the ageing issue usually emerges in response to restructuring, market developments, organisational change and technological developments, skills loss, labour shortages and trade union policies. The report also refers to what it calls the generic, company-specific, reasons for making ageing a key issue. Such reasons include, cost pressures, consumer demands, flexible production needs, competition for and retention of skilled labour, and changing social values within a company.

Good practice in companies

The report considers government legislation and the role of social partners in promoting and supporting age management practices. A particular strength is the account of practices being implemented by companies. In an attempt to achieve the right balance between an individual’s abilities according to their age and the tasks to be fulfilled, companies have introduced a range of practices aimed at:

  • improving working conditions and workers’ abilities;
  • better health awareness;
  • greater internal flexibility and mobility;
  • career development;
  • mixed age groups and the promotion of knowledge transfer;
  • flexible working time practices;
  • avoiding physically demanding working hours and using older workers at non-stressful periods;
  • changing wage structures and pension provisions as a means of making early retirement a less appealing option.

The report offers a detailed overview of company policies that have attempted to address these issues. For example, the Finnish food company Saarioinen is committed to ensuring that older workers do not have to work the third shift and that they are allowed to work part time as well as being exempt from job rotation. The Polish construction company Wojdyla has developed a policy that promotes age-balanced work groups to encourage knowledge transfer and that helps to place older workers in positions requiring precision rather than physical effort. An interesting measure involves an apprenticeship scheme for workers over 40 years of age, offered by the UK energy company UK-ENSEC. In an attempt to keep senior employees efficient and motivated, the French bank Le Credit Lyonnais (LCL) has implemented a programme that includes career meetings for workers aged between 45 and 48 years, in addition to specific assignments for older workers.

Positive outcomes and success factors

In terms of positive outcomes, respondents of the case studies mainly referred to the cost-effectiveness of such measures. The most notable savings were in reduced severance pay, lower absenteeism rates and a decline in staff turnover. In addition, companies also reported an improvement in workers’ motivation and productivity; however, the report suggests that measuring the degree of improvement with regard to these two factors proved difficult.

The involvement and support of top management, human resources (HR) and line managers were considered essential for the success of age management policies in companies. Furthermore, policy-awareness activities, particularly in large companies, and the inclusion of employee representatives in company policy development were deemed necessary. Conversely, the departure of a key policy supporter (such as the initiator), in addition to line-management and employee opposition, or too much internal mobility which increases stress levels among workers, were viewed as barriers to the successful promotion of age management policies.

Michael Whittal, Technical University Munich for AWWW GmbH ArbeitsWelt – Working World

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