Recharging or Retiring the Older Worker? Strategies of European Employers Kène Henkens, NIDI, The Hague, University of Amsterdam With Harry van Dalen (NIDI)

Recharging or Retiring the Older Worker? Strategies of European EmployersKène Henkens, NIDI, The Hague, University of Amsterdam

With Harry van Dalen (NIDI) and Mo Wang (University of Florida)

NEUJOBS, Thursday 10 April 2014, Bonn

AGE COMPOSITION OF THE POPULATION (EU 25), 1950-2050

GOVERNMENTS AT NATIONAL AND EU LEVEL

• Ageing and dejuvenation require higher participation to combat decline potential labour force and make welfare state sustainable

• Increasing life expectancy driving force behind extension working life and increase pension age

EXTENSION OF WORKING LIVES….

SUPPLY AND DEMAND SIDE FACTORS

Most research is focussed on the supply side of

the labour market: Workers’ behaviours and

attitudes

Few studies look at the demand side of the

labour market: Employers’ behaviours and

attitudes

OVERALL AIM OF THE ASPA PROJECT

To gain insight into effects of employers’ behaviour on

the use of older workers

ASPA MULTINATIONAL SETUP

RESEARCH QUESTIONS ASPA PROJECT

How active are employers in stimulating labour force

participation of older workers?

What are the impediments for active ageing?

What type of solutions do employers see to deal with

current labour market challenges?

ASPA EMPLOYERS SURVEY, 2009

Organizations with 10 employees or more

Stratified sample size and sector

6,000 employers in eight countries

Identical questionnaire in all countries

EXPECTED INCREASE IN RETIREMENT AGE (%)

Source: ASPA Employers Survey (2009).

CENTRAL RESEARCH QUESTION

Which types of age-based HR strategies do

employers actually use?

And do different types of organizations (old,

knowledge intensive, etc.) employ different

strategies?

PERSONNEL ECONOMICS

Lazear’s theory of implicit contracts

DILEMMAS

Macro: seniority wages sensitive to age

structure of staff

Micro: seniority wages imply mandatory

retirement rules

HUMAN RESOURCE STRATEGIES

• Exit, early retirement

• Accomodation

• Development, investment

METHOD

Structural equation modelling with latent

variables:

•Exit routes

Early retirement

Part-time retirement

•Accomodation

• Reduction of working time

• Decreasing workload

• Ergonomic measures

• Age limit for irregular work or shifts

….CONTINUED

• Development measures

• Training plans for older workers

• Promoting internal job mobility

• Continuous career development

DESCRIPTIVES

• Exit routes

Early retirement (31%)

Part-time retirement (26%)

• Accomodation

• Reduction of working time (24%)

• Decreasing workload (20%)

• Ergonomic measures (33%)

• Age limit for irregular work (11%)

• Development measures

• Training plans for older workers (19%)

• Promoting internal job mobility (28%)

• Continuous career development (32%)

HUMAN RESOURCE STRATEGIES

EXPLANATORY VARIABLES

• Proportion of older workers

• Organization size

• Importance of seniority-based compensation

• Influence of unions in HR policies

• Knowledge intensity organization

• Training requirements

RESULTS: EXPLAINING HR STRATEGIES

HR strategies

Exit Accommodation Development

% Older workers +++ ++ +

Size organization

Seniority compens. + + +

Unions influence + ++ +

Training requirements + ++ +++

Knowledge intensity ++

CONCLUSIONS

• Micro-macro paradox

• Employers use both exit and retention

strategies

• Aging firms more set on exit routes than

younger firms

• Large country differences

• Public sector more age conscious than

private sector

Thank you for your attention!

Kène HenkensEmail: henkens@nidi.nl

Reserve slides

RECRUITMENT AND RETENTION

EUROPEAN EMPLOYERS' PERCEPTION OF WAGES RISING WITH TENURE (%)

Source: ASPA Employers Survey (2009).

EMPLOYERS' EXPECTATIONS WITH RESPECT TO THE LABOUR COST-PRODUCTIVITY GAP WITH AN AGEING STAFF (%)

Source: ASPA Employers Survey (2009).

ORGANISATIONAL POLICIES

Source: ASPA Employers Survey (2009).

HOW TO RESPOND TO A CRISIS?

Source: ASPA Employers Survey (2009).