Recharging or Retiring the Older Worker Recharging or Retiring the Older Worker? Strategies of European Employers Kène 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 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 Henkens Email: 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).