The management of older workers and employment

policies within Europe

WAPES workshop PESs and access to employment for older workers

Sofia, Bulgaria - 17-18 November 2015

Annie Gauvin – Director of International Relations and Affairs

CONTENTS

1) BACKGROUND

Demographic changes are transforming European societies

2) POLICIES AIMED AT ENCOURAGING THE EMPLOYMENT OF OLDER PEOPLE WITHIN THE EU

Restrictive policies

Incentive policies

Policies aimed at promoting a more positive image of older workers

3) STEPS TAKEN IN EU COUNTRIES TO INCREASE EMPLOYMENT RATES AMONGST OLDER PEOPLE

Improving working conditions

Promoting health at work

Training and making use of experience

4) SPECIFIC ACTIONS CARRIED OUT BY PESs

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1) Demographic changes are transforming European societies

→ A low fertility rate, below 2.1 children per female, is required to maintain the population at its current level;

→ Forecasts predict a reduction in the total number of people of working age between now and 2050

→ An increasing proportion of older people within the active population (22% between now and 2030, more than 25% in certain countries)

→ The various generations of baby boomers are reaching retirement age, leading to an increase in the proportion of older people within the population

→ Steady increases in life expectancy, which are resulting in prolonged retirement.

According to forecasts, by 2060, around 30% of the EU’s population will be aged over 65. The increase in the number of the “oldest people”

(those aged over 80) is particularly pronounced.

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Demographic situation in Europe

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Source: Eurostat, except United States and Japan: OECD (2013 data).

Proportion of persons aged 55-64 in employment in 2014

Sweden

Norway

Japan

Germany

Denmark

United Kingdom

United States

The Netherlands

Finland

Czech Republic

European Union (15 countries)

Ireland

European Union (28 countries)

Euro area (19 countries)

Bulgaria

Portugal

France

Italy

Austria

Slovakia

Spain

Romania

Belgium

Luxembourg

Poland

Hungary

Greece

Lisbon Strategy

The employment rate amongst those aged between 55 and 59 is above international averages, however that is not the case for those aged over 60.

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Source: OECD estimates based on national surveys of the active population

Employment rate (%) by age group, 2002-2012, France, EU and OECD

Some additional characteristics 1) Unemployment

→ Unemployment rate amongst those aged over 55 years: 7% (+ 2 points/2008)

→ More than 60% of older people who are unemployed are classed as long-term unemployed; more than 30% have been unemployed for 2 years and almost 20% have been unemployed for 3 or 4 years

→ In certain countries, a large percentage of older people pass directly from unemployment into retirement

2) Quality of working life

→ The happiness of older people at work

● 30% of older people who are still in employment in France say that they feel happy at work

● 71% in the Netherlands

● 54% in Sweden

● 50% in Germany

2) Policies aimed at encouraging the employment of older people

European policy with regard to the ageing of the active population is directly linked to the Lisbon Strategy and the Europe 2020 strategy

→ A far more ambitious avenue for reform is the attempt to spark a real “cultural revolution” by means of a global policy aimed at supporting activity amongst older people, encompassing both retirement policy and employment policy, and drawing upon the collaboration of all of the social partners. The countries that have committed themselves to that path have put all of the following in place:

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Policies aimed at promoting a more positive

imageof older workers

Incentive

policies

Restrictive

policies

Restrictive policies

→ One measure that is frequently used is to increase the retirement age

→ Include demographic factors in the calculation of retirement age - increases in life expectancy in particular, such as has been done in Finland, Italy, Sweden, Norway and Germany.

→ Several countries have chosen to implement systems that take into account salaries earned throughout the person’s working life for pension calculations, and not just the best or the most recent salaries, e.g.: Austria, Portugal and Sweden, amongst others.

→ In Germany, Denmark, Finland, France and Belgium, the possibility of taking early retirement has been restricted or withdrawn entirely.

→ Furthermore, a number of countries have made it more difficult to access other schemes enabling an early exit from working life, such as unemployment, disability or long-term sickness (the Netherlands and Denmark, amongst others).

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Incentive policies

→ The introduction of bonuses for delayed retirement is frequently used as a way of encouraging older people to remain in employment, e.g.: In Italy, up until 2008, workers employed in the private sector who were entitled to a full pension, but who remained in employment, were completely exempt from making contributions towards their basic pension.

→ Progressive retirement is another method used to encourage older people to remain in employment. It involves the introduction of a transitional period between employment and retirement, during which time the employee is able to reduce his or her working hours while receiving a compensatory allowance. Such a system has been introduced in Austria, Spain, France and Norway.

→ In Sweden, since the 1999 pension reform, workers have been able to take 25, 50 or 75% of their pension with partial retention of their working hours.

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Incentive policies

→ Other incentive-based measures concern the labour market and often involve the establishment of:

→ “Mutual obligations”: older unemployed people must actively seek employment and the public authorities must make career guidance services available to them in return

→ Measures are also put in place that aim to encourage employers to employ older people by offering salary subsidies or reductions in social security contributions. In Sweden, employers who employ older people who have been unemployed for a long time receive a subsidy that covers 75% of their salary. In Austria, employers are exempt from unemployment insurance contributions when they employ a person aged over 50 years.

→ Some measures aim to improve working conditions or to train older people to enable them to remain in employment, e.g.: In France, the social partners concluded a national agreement in 2003, thereby increasing the financial contributions that companies pay for training. In the United Kingdom, the green book entitled “A new deal for welfare: Empowering People to Work”, published in 2006. In Germany, since 2006, WeGebAU subsidies have been used to promote professional training for low-skilled and older workers within companies.

Policies aimed at promoting a more positive image of older workers

These types of policies help to tackle the cultural attitudes and negative stereotypes that are suffered by older people

→Information and awareness campaigns aimed at the general public are frequently used, e.g.: In 1998, Finland launched a significant campaign aimed at encouraging the employment of older people, with the slogan: “experience is a national treasure”.

→Another method used to combat stereotypes is the introduction of legislation against age-related discrimination. A large number of countries have their own legislation relating to this. The European Directive of 2000 concerns equal treatment in employment and occupation, and it counts the combating of age-related discrimination amongst its aims

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3) Steps taken in EU countries to increase employment rates amongst older people

The strategies drawn up to encourage the employment of older people differ from country to country, however a number of common themes can be identified

→ Improving working conditions

→ Promoting health at work

→ Training and making use of experience

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Improving working conditions

→ With regard to the physical burden of work, it is important to reduce to a minimum the exposure to various pressures resulting from the physical working environment

→ The psychosocial environment of the work station is also taken into consideration. A number of measures have been put in place to prevent these pressures, such as the framework agreement on the fight against work-related stress, which was signed by the European social partners in October 2004.

→ The adaptation of work stations is often accompanied by measures relating to the organisation of work, such as adaptation of working hours, or remote working in particular.

→ A reduction in working hours is another option used to enable employees of a certain age to continue to work. In the Netherlands, for example, companies encourage employees to continue working part-time at the end of their career, with the said employees retaining their right to a full-time equivalent pension.

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Promoting health at work

The necessity of improving working conditions for older people has highlighted the importance of prevention throughout a person’s working life

→In fact, it is sufficient to pay attention to a reduction in work station-related nuisances and to prevent occupational burn-out at the earliest possible opportunity

→In order for a person to be able to work beyond the age of 60, it is crucial that they reach this age in good health, both physically and mentally. For example: INQA (Initiative Neue Qualitat der Arbeit - New Quality of Work Initiative) launched in Germany by the public authorities, social security organisations and social partners: “30, 40, 50 plus - Healthy Work into Old Age” is a perfect example of this trend.

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Training and making use of experience

→ The Eurostat publication entitled “The employment of seniors in the European Union” shows that there are marked differences in employment rates, depending on qualifications: “In the EU-25, 30.8% of persons aged 55-64 with the lowest education level have a job, compared to 61.8% for those with the highest”.

→ Participation in continued professional development is high in Scandinavian countries. In continental Europe, only 30% of older people take part in training, compared with 70% in Finland and Denmark

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Training and making use of experience

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FINLAND DENMARK

Finland’s National Programme for Ageing Workers, FINPAW, which was launched in 1997, placed a great deal of importance on training and emphasised the development of the knowledge and skills of adults.

Plans have been drawn up, not in terms of age, but in terms of career path:

• An initial plan entitled “the age of employment” (1998-2002), addressed the latter half of a person’s career.

• A second plan (2003-2007) aimed to increase the attractiveness of work for everyone.

In Denmark, the amount of State spending dedicated to training is fairly high when compared with spending in other countries.

• Easier access to ongoing training,• Flexible adaptation of education systems in

accordance with workers’ needs, and • Cooperation between various sectors

(social partners, companies and the public education system)

All of these factors contribute to the relatively high number of older people on the labour market

Training and making use of experience

→ Some measures aimed at improving the professional prospects of older people focus on making use of experience, an approach which aims to make the best possible use of the knowledge and experience of older workers and to ensure that these workers remain motivated at work.

● For example: In 2006, Prevent launched the “Safety Coaches” project (young and older workers, together for safety in the workplace). Aim: To pair young people just starting out in their careers with older colleagues who are able to look back on a long career with the company, and who are therefore in an ideal position to take on the role of tutor.

→ Other measures aim to provide specific structures, the goal of which is to help companies to improve the occupational health of older people.

● For example, in 2004, Belgium created the Occupational Experience Fund. Armed with an initial budget of 5 million euros, which increased to 10 million in 2005 and 2006, this fund grants subsidies to innovative and reproducible projects aimed at avoiding risks or improving the well-being of older workers.

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4) Specific actions carried out by PESs→ Preventative actions to keep older workers in employment

● Intervention to promote the development of skills in the workplace

● Rapid and early intervention for people facing redundancy

→ Personalised interventions for job-seekers● Personalised action linked to an early diagnosis, professional advice and guidance, and the implementation of

an individual action plan (including conversion and adaptation of skills) (bearing in mind the increased risk of a loss of motivation)

● Provision of tailored services, advice and benefits, e.g. job search clubs

● Development of rapid contact with employers

→ Development of relationships with employers● Social responsibility of companies (setting a good example) and the fight against discrimination

● Promotion of diversity, the employment of older people and making use of their qualities

● Support during recruitment and use of tailored services

→ Effective mobilisation of active employment policies● Subsidised employment

● Agreements with employers

→ Development of the skills of PES employees ● To defy expectations,

● To facilitate interaction with job-seekers and stakeholders in the employment system

THANK YOU FOR YOUR ATTENTION!

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