Workforce Planning: Aging and EmploymentModule 8: International: Pressures and Lessons

Barbara McIntosh, Ph.D.

International: Pressures and Lessons

• Aging is a global phenomenon.

• Projected labor force changes in EU and G7 countries.

• Retirement expectations.

• Economic implications.

• Work intentions post retirement.

• International (universal) age-related HR practices.

Aging Is a Global Phenomenon

All countries are facing a demographic transition:> Older population.> Slowdown in growth of 20- to 64-year-olds,

primary participants in the labor market (OECD, 2006).

Effect on labor market:> Retirees not being replaced in Japan, Italy and

France.> Small growth in Germany.

G7 Labor Force Changes: 5- and 10-Year Projections

Employment Realities and Retirement Expectations

• In 2001 the EU set a target to increase employment of older workers to 50 percent by 2010 (European Council, 2001).

• The goal in the EU is to raise the effective retirement age by approximately five years by 2010 (European Council, 2002).

• In G7 countries, retirement from primary job is at about age 60--slightly later for full retirement (AARP, 2007).

2005 Employment Rates for Ages 55-64 in EU-15

Country Women Men Total

Austria 22.9 41.3 31.8

Belgium 22.1 41.7 31.8

Denmark 53.5 65.6 59.9

Finland 52.7 52.8 52.7

France 35.2 40.7 37.9

Germany 37.5 53.5 45.4

Greece 25.8 58.8 41.6

Ireland 37.3 65.7 51.6

Italy 20.8 42.7 31.4

Luxembourg 24.9 38.3 31.7

Netherlands 35.2 56.9 46.1

Portugal 43.7 58.1 50.5

United Kingdom 48.1 66.0 56.9

Spain 27.4 59.7 43.1

Sweden 66.7 72.0 69.4

EU-15 35.4 53.1 44.1

Retirement Expectations in G7

Economic Implications

• Retirement age has not, in general, shifted upward worldwide.

• Significant talent gaps will exist if retirement age remains the same.

• Increasing dependency ratios are not sustainable.

• Pension affordability is a universal problem.

Headlines Reveal Common Issues

• JAPAN: “Fiasco over pensions worsens in Diet,” Yomiuri Shimbun, December 14, 2007.

• GREECE: “Greeks strike over pensions,” Bloomberg News, December 13, 2007.

• SINGAPORE: “Few Singaporeans dream of retiring young: survey,” Channel NewsAsia, December 13, 2007.

• CZECH REPUBLIC: “Czech PM sees rocky 2008 over pension reform,” Reuters, Dec. 12, 2007.

• INDIA: “Pension bill may outstrip wages this fiscal year,” Economic Times, Dec. 12, 2007.

• KENYA: “State to stop free pension plans for all civil servants,” Business Daily Nairobi, Dec. 13, 2007.

• NIGERIA: “Pension Arrears Now 2 Trillion Naira (17.188 billion US dollars) - NLC,” allAfrica.com, Dec. 12, 2007.

• UK: “Ministers blamed for stalled pensions lifeboat,” by Phillip Inman ,Guardian, Dec. 10, 2007.

Work After Retirement? Global Economic Uncertainty

• Country-specific/dependent upon: Custom. Mandatory retirement. Availability of jobs. Attitudes toward age.

• Universal: Shifting dependency ratios (fewer people working

and therefore supporting retirees). Financing pension programs is in question, so

more older workers face economic uncertainty.

G7: Reported Work Intentions

How Country Differences Affect HRM

• Cultural factors.• Economic systems.

> Labor costs.> Number of hours worked.> Paid time off.

• Legal and industrial relations factors.

Perceptions of Employer Support

Global Differences and Similarities in HR Practices

• Personnel selection procedures.

• The purpose of performance appraisal.

• Training and development practices.

• The use of pay incentives.

* Based on assessment of best practices in 13 countries starting in 2002.

Age-Related Employment Practices Implemented and Under Consideration in G7

Best Age-Related HR Practices in EU

 Universal topics:• Job recruitment.• Learning, training and lifelong learning.• Career development.• Flexible working practices.• Health protection and promotion and

workplace design.• Redeployment.• Employment exit and the transition to

retirement.

 

Perceptions of Workplace Policies Supporting Older Workers in G7

Staffing the Global Organization

Off-shoring (Outsourcing):• Significant increases in the number of jobs

moved in the future.• Value.• Movement to include managerial jobs.

Age in a Global Environment

• Form global HR networks.

• Promote age in global outsourcing.

• Acknowledge differences in intergenerational perceptions.

Inter-Generational Perceptions of Work Related Competencies in G7

Aging Workforce Learning Modules Conclusions: Individual Level

• U.S. workers want to work longer for both monetary and non-monetary reasons.

• Older workers are healthier and living longer than previous generations. They are able to work!

• Economic uncertainty (changing pension schemes, low retirement savings, Social Security vulnerability and increasing health care costs) may necessitate working longer.

Learning Module Conclusions: Organizational Level

• Labor shortages are projected given changing demographics.

• Aging workers constitute an available, experienced labor pool.

• Strategic reviews and actions should include:> Existing workforce audits.> Organizational culture analysis.> Human resource programming including

increasing workplace flexibility, managing career transitions, and developing multigenerational relations.

Learning Modules Conclusions: Societal Level

• Keeping society productive with an aging workforce is a shared responsibility.

• Traditional social and economic retirement support programs are not as secure as in the past.

• Creative economic and employment and training legislation needs to be supported.

• The transition difficulties are shared by virtually all industrialized nations.

Recommendations for HR

• Establish an organizational culture where age is respected.

• Manage the aging workforce strategically.

• Become an age-friendly employer of choice.

• Create a flexible workplace, especially with respect to hours of work.

• Develop multigenerational relations.

• Examine existing policies and practices through an “age” lens.