Motivating people to work beyond retirement age

Debate is ongoing in Sweden about the future labour shortage and the need for employees of retirement age to work longer. A study conducted by the National Institute of Working Life in 2005 reveals that the two most important aspects determining people’s inclination to work longer are motivation and work environment conditions.

Demographic challenges

Sweden has a relatively high proportion of older people. According to data from Statistics Sweden (Statistiska Centralbyrån, SCB), 17% of the population are currently aged over 65 years and this proportion will increase to 23% in 2050. Moreover, a substantial part of the generation born in the 1940s will retire in the coming years, creating thus a labour supply shortage.

The most problematic aspect is that the proportion of people of working age – that is, aged 20–64 years – as a percentage of the total population is among the lowest in the member countries of the Organisation for Economic Cooperation and Development (OECD). In 2001, some 59% of the population were of working age and this figure will decline to 54% in 2030, after which it is expected to stabilise. Nevertheless, Sweden compensates for this proportional deficit with a high rate of employment; at present, approximately 78% of the total working age population are employed, which ranks Sweden in sixth place of the OECD countries.

Inclination to work longer

A study conducted by the National Institute of Working Life (Arbetslivsinstitutet) in 2005 investigated peoples’ inclination and capacity to work until they are aged 65 years or older. The study is based on questionnaire answers from 2,000 employees aged 55–74 years working in health and medical care services. The survey results indicate that almost 40% of the respondents within this sector are interested in continuing to work up to and beyond retirement age.

According to the survey results, three groups of employees emerged among the respondents:

  • 42% responded that they would not be able to work due to health conditions and were not willing to work until 65 years of age or longer (Group 1);
  • 37% reported that they could and were willing to work until 65 years of age or even longer (Group 2);
  • 17% stated that they could work until 65 years or longer, but were not interested in doing so (Group 3).

A fourth group included those who would like to work until 65 years or longer but were unable to do so. However, this category was excluded from the final analysis, due to the small percentage involved (3%).

Driving forces to stay at work

The study highlights two major factors influencing respondents’ capacity and inclination to work longer: motivation and work environment conditions. Motivation factors include the following:

  • the individual’s personal economic situation. The possibility of retiring is dependent on personal finances;
  • employer appreciation, in other words, the feeling of being well rewarded and that the organisation is concerned about the workers’ well-being;
  • the extent to which the job is an essential part of the respondents’ lives, that is, the work is regarded as an important part of their identity and daily life;
  • the opportunity to use one’s professional skills, in other words, if education and experience correspond well with job responsibilities.

In relation to work environment conditions, three main factors seem to determine job sustainability:

  • manageable levels of physical and psychological stress, such as in relation to the pace of work and physical demands;
  • organisational changes;
  • reduced working hours – fewer working hours can motivate people to work longer.

Defferences between the groups

The individual economic situation factor plays a different role among those who consider that they will be able and willing to work longer and those who do not. Individuals in Group 1 (those who responded that they would not be able or willing to do their job at the age of 65 years or older) stated that they wanted to stop working as soon as this was economically feasible, even though it would result in a lower pension. They generally experienced problems with the physical working environment and a heavy physical work. Due to the high pace of work, they hoped to cut back on their working time. Overall, they felt that their work was not useful or well rewarded, and the jobs were not an essential part of their lives. Group 1 distinguished itself from the other groups, since it experienced a more negative attitude towards older employees from colleagues and managers.

Group 2 (those who believe that they would be able and willing to do their job at the age of 65 years or older) planned to work after 65 years in order to obtain higher pensions. Characteristic among the survey respondents in Group 2 was that they had a higher level of motivation, job satisfaction and enjoyment within their job than Groups 1 and 3 had. They were satisfied with their working conditions and were proud of their jobs.

The people in Group 3 (those who are not interested in working until the age of 65 years or older) were relatively satisfied with the working environment, but experienced a lack of motivation. They wished to retire early and saved money to be able to do so. Similar to Group 1, this group also sought reduced working hours, a lower pace of work and the possibility of more breaks. In addition, they did not feel that they were doing useful work and being well rewarded in their occupation.

Commentary

The general conclusions reveal key aspects motivating people to work longer: the feeling that employees are appreciated in the organisation; that their experience is valued; and that further training is available. Furthermore, it seems to be important to develop a more flexible system for working hours to improve a work-life balance and thereby attract more people of retirement age to work longer.

Jenny Lundberg, Oxford Research

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