Workers wanted: How the 50plus age group can help tackle the looming labour shortage
Ageing workforce challenge in Switzerland
The demographic challenge and its impact on companies
Each year, retired workers make up a higher proportion of Switzerland’s total population. Meanwhile, the proportion represented by young people entering the labour force remains consistent. The combined impact of these trends means that by 2030, the Swiss labour market is likely to face a shortage of up to half a million workers.
Age group 50plus: An untapped pool of labour
The 50-64 age group currently offers potential for an additional 230,000 workers. This number is made up of those who are currently unemployed or under-employed and the ‘hidden reserve’ – those not currently in work but who could be mobilised to work. Substantial additional labour market potential is also represented by 50-64 year-olds’ still in employment who want to continue working beyond retirement age. A representative survey by Deloitte Switzerland indicates that this group accounts for 40% of all economically active 50-64 year-olds’ – 580,000 individuals. 35% would like to continue working part-time and 5% full-time.
A major mismatch: aspirations vs. reality
Although 40% of 50-64 year-olds’ already in employment would like to continue working beyond retirement age, only very few assume that they will actually do so. There is a major mismatch between aspiration and reality, and this mismatch is also evident among those who have already retired. 66% of pensioners surveyed were unable to continue working. Of this group, 46% would have liked to continue working, equivalent to 30% of all individuals already receiving their pension.
The rigid mindset caused by Switzerland’s fixed retirement age, limited scope for continuing to work beyond retirement age and insufficient financial incentives to do so mean that few older workers continue beyond retirement age, even though many would like to.
How Switzerland can make better use of the 50plus workforce to fight the looming labour shortage
What can companies do?
The first step is to prioritise the issue. Only companies that focus on older workers as a key part of their overall strategy will be able to fully utilise the existing untapped potential. It is crucial that senior management recognises and strategically embeds the issue at the highest level as a way of integrating it throughout the company’s policies and processes.
This strategic embedding of better integration and continued employment of older workers must be accompanied by clear indicators. Companies should set specific targets, for example indicating the proportion of older workers they intend to employ beyond retirement age. Incentives should also be used as a means of demonstrating success. This would be similar to the approach currently taken to protect and increase diversity in company workforces.
As well as embedding this issue in their strategy, companies also need to change fundamentally their corporate culture and managers’ mindsets. The attitude that older workers are more expensive and perform less well than younger workers, and that employing them has more disadvantages than advantages is still common. In companies where prejudices of this kind are widespread among both managers and HR departments, older workers are given little encouragement to continue working. Such companies are also less likely to recruit older workers because of the prejudices of those making recruitment decisions. As another Deloitte study has shown, one-third of Swiss managers and HR officers surveyed perceive older workers as disadvantaging the company in terms of competitiveness. However, there is no research data indicating that different age groups actually perform differently.
It is therefore crucial that all managers and HR officers undergo awareness-raising training and that emphasis is placed on the advantages older workers offer (including their expertise).
This change in corporate culture needs to be encouraged proactively. Simply informing managers is not enough; wide-ranging change management is needed. Managers must be supported and receive appropriate training if the necessary change in corporate culture is to be achieved.
Once the issue of older workers is embedded in corporate strategy and steps are under way to make changes in corporate culture, the next stage is strategic HR planning. If companies are to make optimal use of the potential older workers represent , all the available data must be clearly presented, so the company needs to be familiar with the age and skills profile of its workforce. It needs to identify the departments and functions that are facing a future labour shortage and that represent additional potential of older workers as well as quantify the extent of the potential represented by older workers who would like to continue working. The same is true of skills: companies need a clear idea of the skills their workforce will need in future and what continuing training measures are necessary to develop them. A systematic skills analysis is recommended.
It is important that individual line managers are involved in strategic HR planning, as they are often in a better position to assess future skills and labour requirements. Implementing this strategy must feed into ongoing local discussions between line managers and senior management teams.
Once the strategic foundation has been put in place and the process of change in corporate culture is under way, companies need to take the fourth step – specific individual measures that will help to keep older employees working for longer.
- Adapt employment models
- Adapt job roles
- Adapt working conditions
- Set up cross-generational teams
- Invest in health management
Once the issue has been addressed strategically and specific measures put in place, the fifth step is to engage in dialogue with individual employees. Regular workplace discussions make it possible to identify the intentions and aspirations both of employees and of the company. A frequent issue raised here surrounds hours of work and pension aspirations. Ideally, the two sides can work together to identify preferred ways of keeping employees working for longer. These discussions need to focus on employees’ plans for the future and the ongoing skills development they need if they are to achieve their goals.
It is important that these discussions take place before employees reach the age of 60. Including spouses and partners, for example through briefings, is also helpful as employees often agree their retirement plans with spouses and partners.
Early discussion of employment options can directly mobilise additional potential. The Deloitte survey indicates that almost 50% of those who are already retired would have been willing to work longer if their employer had approached them in good time and had discussed the opportunities with them.
What can the government do?
Improve the statutory framework:
- Make the retirement age flexible to counteract rigid mind-sets about retirement age
- Adapt retirement ages to life expectancy
- Improve incentives for continuing to work beyond retirement age
- Standardise contributions to the occupational pension scheme (BVG), which are currently age-related.
Raising the retirement age from the perspective of the 50 to 70 age group
Motivated, optimistic but training neglected