International Pressures and Lessons: Overview

1. Workforce Planning: Aging and EmploymentModule 12: International Examples: Pressures and LessonsBarbara McIntosh, Ph.D., SPHR • 2014 The development of this content was made possible through the support from a grant from the Alfred P. Sloan Foundation.

2. International Pressures and Lessons: Overview Aging as a global phenomenon. Projected labor force changes in 16 countries targeted by Bureau of Labor Statistics and the European Union (EU). Retirement expectations globally. International economic implications. Work intentions post-retirement. International (universal) age-related HR practices.

3. Aging Is a Global Phenomenon All countries face demographic transitions: • Last 60 years—people ages 60+ rose from 8% to 10% of total population. • Next 40 years—increase to 22% of total population (800 million to 2 billion). • By 2050—half of continental Europe will be ages 49+. "Think about this: of everyone who ever lived to age 65 since the dawn of humans, two-thirds are walking the earth today!“ (Romasco, 2013) Source: Bottorff, B. (2013, November 15). AARP president shares view of ‘longevity society’. Retrieved from http://states.aarp.org/aarp-president-shares-view-of-longevity-society/

4. Aging Is Accelerating Worldwide

5. Oldest Countries

6. Developing Countries Aging Fastest

7. Convergence

8. Labor Force Size, Gender Composition and Participation Rates, Selected Countries, 2010

9. Global Labor Force Participation Rates (LFPRs) by Sex: 1970-2011

10. LFPRs by Country by Sex: 2012

11. Employment Growth Rate: 16 Country Comparisons 2011 to 2012

12. Labor Force Participation Rates by Age, Selected Countries, 2010

13. Population Aging and Work Average age of retirement in Western Europe: 1960: age 65. 2013: age 60. Average age of retirement in the U.S.: 1960: age 66. 2013: age 61. Concern about future workforce scarcity and economic burden. Shrink from 5 workers per retiree in the 1980s: 2 workers per retiree in the Netherlands. < 2 workers per retiree in Italy and Germany.

14. Population Aging and Work (2) • The highest workforce growth rate between 2010 and 2020 is in the 65-74 age group—a whopping 83.4% increase is projected. The second highest growth rate is the 75+ age group. • In absolute numbers, these two older groups will still be small compared to younger groups. Nevertheless, these two older groups will include approximately 12 million workers ages 65+ by 2020.

15. Employment Realities and Retirement Expectations • In 2001, the EU set a goal (the Stockholm Target) to increase employment of older workers to 50% by 2010, up from 37% in 2000 (European Council, 2001). • The goal in the EU 2002 Barcelona Target was to raise the effective retirement age by approximately five years by 2010 (European Council, 2002). See: European Union (2003) Older people in working life. Brussels. December 2003. http://cor.europa.eu/en/archived/documents/62c3b281-18e0-40d0-828e-bf2dd9b6d765.pdf

16. Evolving Targets “In its Europe 2020 strategy, the European Commission has increased the target for the employment rate of the population ages 20-64 years from the 69% achieved in 2009 to 75% in 2020, with the greater involvement of women, older workers and the better integration of migrants in the workforce, as detailed in the Communication from the Commission COM(2010) 2020 of 3 March 2010.”

17. EU 2020 Strategy The EU’s Europe 2020 strategy targets 75% employment rate for workers ages 20-64 by 2020. This will require increased participation of older people in the workforce and a reduction in the rates of early retirement and labor market exit. Currently half of people ages 55-64 across Europe are not working.

18. 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.

19. Headlines Reveal Common Issues • IRELAND NEWS:"Prospect of a pension shortfall is not to be underestimated," (_Irish Times_ [Dublin], April 22, 2014). • JAPAN NEWS: "Japan overhauls its public pension fund, the world's biggest," by Chikafumi Hodo And Takaya Yamaguchi (_Reuters_, April 22, 2014).  • NETHERLAND NEWS: "Cutting pensions will hit hopes of more family carers, say campaigners," (_DutchNews_, April 22, 2014). • CANADA NEWS: "Proposed pension reforms poisoning Alberta labour relations: critics," by Mariam Ibrahim (_Edmonton Journal_, April 23, 2014). • CHILE NEWS: "Chilean pension expectations not being met," by Kieran Lonergan (_Business News Americas_, April 23, 2014). • GERMANY NEWS: "German pension plans prompt EU reply," by Carla Bleiker (_Deutsche Weld_, April 24, 2014). • SCOTLAND NEWS: "Scottish independence: Governments clash over pension costs," (_British Broadcasting Corporation [BBC] News_, April 24, 2014). • THAILAND NEWS: "Activists step up pension fund call," by NutnareePakvisate (_Bangkok Post_, April 29, 2014).

20. Work After Retirement? Global Economic Uncertainty • Country-specific/dependent on: • 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.

21. How Country Differences Affect HRM Cultural factors. Economic systems: Effects of recession. Labor costs. Number of hours worked. Paid time off. Legal and industrial relations factors.

22. Increase Statutory Pension Age • Germany plans to increase the retirement age from 65 to 67 between 2012 and 2029. • Japan is gradually increasing the age of retirement from 60 to 65. • France plans an increase from 60 to 62 over the next 8 years. • The UK proposes an increase from 65 to 66 in 2024 and to 68 in 2044. Source: Bell, D., & Rutherford, A. (2013). Older workers and working time (Discussion Paper No. 7546). Institute for the Study of Labor. Retrieved from http://ftp.iza.org/dp7546.pdf

23. Best Age-Related HR Practices in the 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.

24. Country-Specific Efforts: Minimal Impact What Works? • A nationwide program in Bulgaria to encourage businesses to hire unemployed persons ages 50+ had by 2011 hired an estimated 500 people. Another scheme (HRD) helped only 100 older people back to work. • In Spain, the government introduced a partial pension system. There was very low participation. • Belgium introduced a 2006 Solidarity Pact Between Generations to increase employment of those 55+. The government supported a number of initiatives such as workplace improvements, intergenerational relations in the workplace, and health at work schemes. In 2012 the OECD reported that its impact on these fronts had been ‘minimal’.

25. Country-Specific Efforts: Minimal Impact (continued) • In Portugal a New Opportunities Initiative gives preferential access for older people to lifelong learning. So far, only a small number of workers 55+ have registered. • Since 2008, workers 45+ in Poland have been able to use the services of the Labour Office to secure vocational training and financing. In 2010 only 610 employees 45+ received this training support. • The Portuguese Intervention Programme for the Senior Unemployed was started to stimulate job creation for older workers. From 2008 to 2010 this program reached only half of the unemployed it was expected to reach (an expected 90,000 older workers).

26. Aging Workforce Learning Modules Conclusions: Individual Level U.S. workers want to work longer for both monetary and nonmonetary 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.

27. Learning Module Conclusions: Employer/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.

28. 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 they were in the past. Creative economic, employment and training legislation needs to be supported. The transition difficulties are shared by virtually all industrialized nations.

29. 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.