Employment policies to promote active ageing

On 11 June 2012, DG Employment, Social Affairs and Inclusion (DG EMPL) of the European Commission hosted the spring seminar of the Mutual Learning Programme, focusing on policies to extending working lives.

Employment rates of older people differ significantly across EU Member States. However, it is essential in all Member States to have more elderly people employed in order to preserve the European social models, ensure productivity and maintain sustainability of public finances in the longer term. The promotion of active ageing policies and related employment policies are currently actively debated at the European level, as the Employment Committee and Social Protection Committee are currently preparing common principles for the different policy areas of active ageing, including employment. Set in the context of the European Year 2012 for Active Ageing and Solidarity between Generations, this Thematic Review Seminar aimed to contribute to the debate between representatives from Member States, social partners and NGOs and support mutual learning in the area by discussing the employment situation of older women and men, and examples of national policies to address the main challenges regarding their labour market participation. With this brief presentation of the EU level context, Mr Jean-Louis de Brouwer from DG EMPL officially opened the seminar, which included a series of presentations from keynote speakers, social partners, Member States representatives and a closing panel debate.

Extending working lives: the impact of economic context, workplace changes and policy interventions

In his keynote presentation, Dr Dirk Hofäcker, from Mannheim Centre for European Social Research (Germany), recalled the importance of the demographic challenge and the interactions between the effects of globalisation and demographic ageing: by raising demand for flexibility and its particular effect on sectors where older workers tend to be over-represented, globalisation created a competitive disadvantage for this segment of the labour force. Among the measures taken to promote higher employment rates among older workers, Dr Hofäcker explained that the one that has received most attention so far across Europe is about pension reforms and “stick” measures” to keep older employees in work (e.g. reforming early retirement schemes or raising contribution years). He called for the implementation of complementary reforms promoting the employability and maintenance of older workers (including measures to promote access to lifelong learning and occupational mobility) and emphasised the importance of addressing identified obstacles such as seniority wage systems.

Dr Donald Storrie, from the European Foundation for the Improvement of Living and Working Conditions, highlighted the huge potential for peer learning in the area of active ageing in Europe, as a few countries are doing remarkably better than others when it comes to labour market participation of older workers. Dr Storrie, stressing that there is no way of escaping the challenge of increasing working lives  - “either we work longer or we become poorer” -, argued that a key precondition for longer careers is improving work quality from an early stage. Indeed, evidence from the European Working Conditions Survey shows that respondents open to the idea of carry on working after 60 are those working in favourable working conditions and less exposed to posture and movement related risks. He debunked some myths about older workers, such as the loss of productivity associated with age - scientific evidence actually suggests that older workers do not necessarily become less productive; he also argued that the affirmation that job sacrifice by the old benefit the young (i.e. older workers retiring to leave job for younger workers), is not supported by macroeconomic evidence.

This point was further stressed by Ms. Anne Sonnet, from the Directorate for Employment, Labour and Social Affairs of the OECD, who also mentioned that labour markets are dynamic and do not function according to a simple substitution logic. During the recent recession, early retirement was actually not used as an adjustment variable as used to be the case in the previous recessions; she also pointed out that specific policy initiatives targeted at older workers have been taken in the context of the recession. Ms Sonnet backed the views expressed by previous speakers on the importance of developing integrated approaches to promote working lives and recalled the work led by the OECD in this area since the series of country reviews “Live longer, Work longer” carried out in 2003-2006. This led to the formulation of a three-sided policy agenda in the area: rewarding work (which includes pensions reforms encouraging longer working lives, workers retirement), changing employers’ practices (e.g. via age diversity campaigns, aligning labour costs with productivity) and improving employability through suitable training, active labour market policy and improved work environment. As the OCED is initiating a series of new country reviews in the area (including some EU countries), Ms. Sonnet warned that a number of barriers to working at an older age remain and that the implementation of age-friendly policies should be stepped-up.

After this series of interventions, the social partner perspective was brought in the discussion by Mr. Mathias Maucher (European Federation of Public Service Unions) and Dr. Jan Schugk (Confederation of Finnish industries).

Mr. Maucher shared his experience in elaborating common guidelines and good practice to address the challenges of an ageing workforce in the health care sector, through the activities of a bipartite Working group at the European level. Such guidelines are needed as the sector faces important difficulties to recruit and retain workers. Echoing some of the reflexions made by previous speakers, Mr. Maucher presented the comprehensive approach which has been retained to frame the discussions, not only focusing on older workers and those about to retire, but also on working conditions over the career and taking into account various dimensions and general attractiveness of the sector (working environment, occupational safety, work-life balance and flexible work tine arrangements, access to training, etc.).

Mr. Schugk presented the situation in his home country, Finland, and raised the controversial question whether among the older workers the “right people” stay (i.e. the most productive) or only those who can (afford to) do so. M. Schugk then introduced the joint programme put in place by Finnish labour market organisations to promote active ageing and participation in working life. Interestingly, this programme includes different complementary areas for intervention: sharing learning on how to manage different age groups, improving the planning of careers and the continuation of working, stimulating learning and personal skills development for each employee, providing flexible working time arrangement, offering health checks and personal health plans and adjusting work in relation to the working ability of the employee.

Measures taken at Member State level: the importance of prevention, stakeholder involvement, a strong mix of measures and ongoing evaluation

Dr Susanne Koch, from the German Public Employment Service (BA, Bundesagentur for Arbeit), explained that putting in place preventive measures to foster longer working lives is a key mission for the BA as part of an “active subsidiarity” approach. She introduced the three fields in which the BA is developing preventive measures: awareness–raising on older workers issues, skills and qualifications counselling for SMEs and the promotion of in-work training measures. One concrete example of support provided is the WeGebAU programme, which, among other groups, targets workers aged 45 employed by SMEs and can fund up to 75% of their training costs for certified training measures. One of the lessons learnt from evaluations is that, while a large majority of SMEs still see no need for upskilling and qualifying, providing counselling can make a difference and help them to identify their training needs. Dr Koch concluded by mentioning that such measures seem to support the retention of older employees in employment in Germany, although success in prevention is hard to evaluate[1].

Mr. Ola Ribe from the Norwegian Ministry of Labour shared with the participants some of the lessons from his country’s experience in promoting longer lives[2].  He introduced the recent  reform of old age pension reform (implemented as of 2011), introducing the principle of life expectancy adjustment of pensions, of flexible retirement form the age of 62 to 75 years in the private sector, pensions related to lifetime income and possibility to combine labour income and full pension. Mr. Ribe also recalled the long tradition of tripartite cooperation in Norway, including in the area of senior policy, with the adoption of a key milestone: the tripartite Inclusive Working Life agreement (signed in 2001 and renewed several times since). A specific aspect of tripartite cooperation on senior policy in Norway is the role of the Centre of Social Policy, an independent resource centre in promoting good senior policy through a variety of tools and channels, changing general attitudes among employers and the workforce and facilitating cooperation between social partners at different levels.

In contrast with Norway, Poland is characterised by very low employment rates among older workers; furthermore, demographic forecasts foresee a rapid aging of the population. Against this challenging background, Ms. Malgorzata Sarzalska from the Ministry of Labour and Social Policy presented the “Programme 50+”, an ambitious set of measures adopted in 2008 which is implemented at national and regional level. Some of the outcomes achieved so far include the phasing out of most of the early retirement schemes, more favourable conditions for training of employers over 45 or the temporary decrease of labour costs for hiring unemployed aged 50 and over. Ms. Sarzalska explained that the effects of the programme are being monitored (with a first report published in 2011), although it remains difficult to fully assess results so far. Key challenges identified for the implementation are the low motivation of older workers to stay on the labour market and the persistence of negative stereotypes of older workers.

Conclusions: despite significant progress there is a need to step up supporting measures across the lifecycle and remove remaining barriers to extending working lives

The seminar concluded with a panel debate on the design of employment policies to promote active ageing and the impact of reaching employment targets of the Europe 2020 strategy.

Participants acknowledged as a positive development the fact that countries resisted using early retirement schemes during the last recession. On the other hand, current efforts to promote active ageing are still seen as insufficient and need to be stepped up - it is a well known fact that ageing is ineluctable, but stakeholders are still not fully anticipating the impact of demographic previsions.  Workers themselves do not seem to trust that they will enjoy longer lives; lack of motivation of older workers to extend their careers is a major obstacle to the implementation of active ageing policies, as reflected in the experience of Poland mentioned above. This is also true for countries with higher employment rates among older workers (e.g. in Finland, a country where participation of older workers is high, according to the Finnish National Work and health Survey 2009, almost half of blue collar workers stated that nothing could make them continue working after the age of 63). It was also suggested during the debates that more knowledge is needed on personal preferences of workers and factors that influence retirement choices.

There was a large consensus among panellists and speakers that ageing and retirement should be seen as processes, in a long-term perspective. Hence, it is necessary to develop integrated, comprehensive approaches on active ageing based on the entire career, where the promotion of the quality of work plays a key role, as well as measures centred on the preretirement and post-retirement periods. Overall, the so-called “carrot” measures to increase working lives are still undeveloped in many countries. Increasing the statutory retirement age, phasing out of early retirement schemes and financial incentives to prolong working life up to and beyond pension age, often as a way of accumulating further entitlements for later retirement, are measures used in many Member States. These reforms have an impact on the labour market participation of older workers but they must be accompanied by additional strategies to supply age-adequate workplaces, lifelong learning and reconciliation between work and family life. Such efforts must incorporate the possibility to implement individual tailor-made plans and, if possible, focus on these groups of senior workers considered most at risk. It was also acknowledged that guidance for employers and employees is being developed but practical implementation and change in attitudes and management style requires time.

In closing the seminar, Mr. Loris Pietrantonio from DG EMPL recalled the importance of the discussion at stake for the sustainability of our social protection systems and highlighted that the discussions touched on core issues for the Commission. He also noted that many issues to tackle are related to establishing preventive approaches and appropriate incentive schemes with a comprehensive view to looking at age-related transitions throughout the whole working lives. Active ageing strategies should actually start from the very moment persons enter the labour market. He also highlighted the need for stakeholders to come together in practically implementing active ageing strategies.

[1] More details on the experience of the BA will also be made available  on the website of the 'PES to PES Dialogue' (the European Commission’s mutual learning support programme for public employment services) as part of the outcomes of a Peer Review held in May 2020 in Nürnberg on the topic of PES and older workers:  http://ec.europa.eu/social/main.jsp?catId=1004&langId=en

[2] This aspects were discussed more in detail during a recent Peer review held in Oslo in May 2012. More details on the Peer Review can be found on the Mutual Learning Programme at this address: http://www.mutual-learning-employment.net/index.php?mact=PeerReviews,cntnt01,detail,0&cntnt01options=19&cntnt01orderby=start_date%20DESC&cntnt01returnid=59&cntnt01item_id=94&cntnt01returnid=59