Increasing reliance on older workers in the labour market

A declining youth population in the future will mean that people will have to work for longer. This will shift the policy focus on increasing the employment of older workers, who are currently present in low numbers in Hungary’s labour market. A survey carried out among companies with more than 50 employees examined the opportunities of employees aged over 45 years and the degree to which companies utilise the experience of older colleagues.

Demographic context

Two of the most significant demographic trends in Hungary over the next few decades are expected to be a moderate decrease in the size of the population and a rapidly ageing demographic profile. The number of older people in the country is expected to increase from 15.1% to 20.4% between 2000 and 2020, with a turning point projected for 2007, when ageing of the population will take place at a faster pace. This will seriously affect the labour market, as the level of employment of older people in Hungary today is low, with little change in the employment rate of 29% registered in 2004, compared with a 40% rate recorded in the 25 EU Member States before the accession of Bulgaria and Romania on 1 January 2007.

Survey methodology

In order to explore the prospects faced by an ageing workforce, Internet Research and Consulting Ltd (GKIeNET) and IBM carried out a representative survey of private and public sector companies with more than 50 employees. The interview-based survey, conducted in the last quarter of 2005, focused on the following topics: the employability of older workers, their access to training, and how to take advantage of their considerable work experience.

Key findings

Employability of older workers

The results show that almost half (45%) of all employees in medium-sized and large companies are older than 45 years. However, remarkable differences arise between the economic sectors in this regard: within companies providing financial, real estate, or business services, the proportion of older employees is only 32%, while in agriculture, education and public health, this proportion amounts to 57% on average. The largest proportions of older employees are employed in agriculture and education.

In the case of companies in foreign majority ownership, the proportion of employees aged over 45 years is 33%, while the corresponding proportion is 47% in companies in majority Hungarian ownership. In state or municipal organisations, more than half of the employees (55%) are older, which shows that public sector workplaces are more open to hiring older age groups than the private sector is.

A total of 39% of the employees hired in 2002–2005 by the companies surveyed were aged between 15 and 29 years old. The proportion of 30–44 year-olds was 24%, and only 16% of the newly hired employees were aged 45–49 years; the latter age group is also the most disadvantaged in terms of dismissals. Less than 0.5% of the companies surveyed employed new personnel aged over 60 years.

Access to training for older employees

The employment prospects of older employees are exacerbated not only by their age but also by the economic conditions that ensued after the 1989 political and economic upheaval in Hungary. Under the new regime, older employees may have found that different knowledge and skills were needed than those which they had gained under the previous system. The survey indicates, for example, that, while 55% of the employees aged under 45 years are largely confident in using computers, the same can be stated about only 17% of those aged over 45 years. In practice, companies do not take action to remedy this situation by providing training for older employees: rather, the older the worker is, the less chance there is that the company will fund his or her training.

Taking advantage of older workers’ experience

Although there are several ways to promote the employment of older workers and to harness their potential, companies fail to use such methods. Introducing telework could constitute one way; however, according to the survey, only 5% of the companies provide this option. Part-time employment is common among the companies in the survey, as 65% of them employ part-time workers. This kind of work organisation is particularly preferred in education and public health, where the number of older employees is higher; 15% of the employees aged over 45 years in these sectors are employed in part-time jobs. Nevertheless, companies fail to utilise the experience and competence of older employees, as there are very few examples of older workers taking part in the training of their younger colleagues.

Commentary

While it is clear that promoting the employment of older workers should be a key policy issue for the coming decades, few steps have been taken to address the situation. The survey carried out by GKIeNet and IBM highlights a lack of strategy in companies in terms of training older employees and using their experience.

Source

IBM-GKIeNet felmérés: Idősek a munkaerőpiacon, 2005.

Zsuzsanna Kiss and Katalin Balogh, Institute for Political Science, Hungarian Academy of Sciences

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment