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Workforce Planning: Aging and Employment Module 12: International Examples: Pressures and Lessons Barbara McIntosh, Ph.D., SPHR • 2014.

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Presentation on theme: "Workforce Planning: Aging and Employment Module 12: International Examples: Pressures and Lessons Barbara McIntosh, Ph.D., SPHR • 2014."— Presentation transcript:

1 Workforce Planning: Aging and Employment Module 12: International Examples: Pressures and Lessons Barbara McIntosh, Ph.D., SPHR • 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. This slide provides an overview of Module 12. Each bullet will be discussed in more detail. Instructor note: Module 12 highlights overall data and public policy initiatives; however, there is wide variation between countries with respect to their policies and practices vis a vis older workers. The best strategy is to have the students report to the rest of the class on their individual country research and then group these reports by global regions.

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 Instructor note: During the lecture, pull up the following graphic: Source: Blair, K. (2014, April 24). The aging world: The world’s oldest populations, mapped. Slate.com. Retrieved from Clicking on the year reveals the percentage of the population ages 65 and older. (The years are 2010, 2050 and 2100.) You can also move the cursor around the globe to highlight discussion. The United Nations offers very detailed Excel tables for specific world population projections. Source: United Nations, Department of Economic and Social Affairs. (n.d.). World population prospects: The 2012 revision. Retrieved from

4 Aging Is Accelerating Worldwide
Source: Beard, J. R., Biggs, S., Bloom, D. E., Fried L. P., Hogan, P., Kalache, A., & Olshansky, S. J. (Eds.). (2011). Global population ageing: Peril or promise. World Economic Forum. Retrieved from

5 Oldest Countries Source: Beard et al. (2011). Global population ageing: Peril or promise. World Economic Forum. Retrieved from

6 Developing Countries Aging Fastest
Source: Beard et al. (2011). Global population ageing: Peril or promise. World Economic Forum. Retrieved from

7 Convergence Source: Beard et al. (2011). Global population ageing: Peril or promise. World Economic Forum. Retrieved from

8 Labor Force Size, Gender Composition and Participation Rates, Selected Countries, 2010
Source: U.S. Department of Labor, Bureau of Labor Statistics. (2012). Charting international labor comparisons. Retrieved from This slide shifts from aging population statistics to labor force statistics. The position of each country should be discussed in class, especially the BRIC emerging economies—Brazil, Russia (missing in this chart), India and China. The key slide in this set is number 10, which shows older worker labor force participation rates (LFPRs) by country.

9 Global Labor Force Participation Rates (LFPRs) by Sex: 1970-2011
Source: U.S. Department of Labor, Bureau of Labor Statistics. (2013, May). Labor force participation rates by sex: (Slide no. 6). International labor comparisons. Retrieved from This slide looks at gender because women live longer, and depending on the country, have the potential to be in the labor market longer. Labor force participation rates by sex, “Men continue to have higher rates of labor force participation than women, but the gap between the two has been narrowing over the past 40 years in all countries compared. In most countries, this is due to a combination of a decreasing rate of participation for men and an increasing rate for women. In 2011, the gap between the sexes was narrowest in Sweden, Canada, and France, and was largest in Turkey, Mexico, and the Republic of Korea.”

10 LFPRs by Country by Sex: 2012
Source: Bureau of Labor Statistics (2013) International Comparisons of Annual Labor Force Statistics, June 7, Retrieved from This slide highlights the current gender differences. Note the similarity in participation rates in Sweden and Canada and the disparity in Turkey and Mexico.

11 Employment Growth Rate: 16 Country Comparisons 2011 to 2012
Source: U.S. Department of Labor, Bureau of Labor Statistics. (2013, June 7). International comparisons of annual labor force statistics, Retrieved from Following the previous slide, the employment growth rate in Mexico and Turkey highlights the potential opportunities for older workers. Unfortunately, Turkey is missing in the next slide, but the instructor can point out the high participation rates of people ages 65+ who contributed to this growth.

12 Labor Force Participation Rates by Age, Selected Countries, 2010
Source: U.S. Department of Labor, Bureau of Labor Statistics. (2012). Charting international labor comparisons (p. 17). Retrieved from “Participation rates were lowest for those ages 65 and older (compared to younger age cohorts) in all selected countries except South Korea. In the Philippines, more than one-third of people ages 65 and older were still in the labor force. In contrast, many European countries had rates below 5 percent for this age group.” Instructor note: Spend time on this slide, and use it as an opportunity to discuss how cultural factors contribute to this profile. If appropriate with the students enrolled in the class, use Hofstede’s dimensions of cultural values to frame this discussion: Individualism-Collectivism Power Distance Uncertainty Avoidance Masculinity-Femininity Short-term vs. long-term Orientation See: Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions and organizations across nations. Thousand Oaks, CA: Sage.

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 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 Source: Barcelona European Council (2002)Presidency Conclusions. March 15-16, Retrieved from The employment rate is the proportion of the total population considered to be capable of working and is actually engaged in employment. HR should look to other countries to see what works in their efforts to increase the employment of older workers by 50%. Some efforts may be transferrable. The accords listed above set targets. The following slide and notes discuss the evolution Sources: European Council. (2001, March 23). Presidency conclusions. Stockholm, Sweden, and Brussels, Belgium: Author.   European Council. (2002, March 16). Presidency conclusions. Barcelona, Spain, and Brussels, Belgium: Author. Towers Perrin for AARP. (2007, September). Profit from experience: Perspectives of employers, workers and policymakers in the G7 countries on the new demographic realities. Retrieved from

16 Evolving Targets “In its Europe 2020 strategy, the European Commission has increased the target for the employment rate of the population ages 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.” Source: Eurofound. (2010, November 30). Employment rate. Retrieved from “At the Lisbon European Council (March 2000), the European Union set itself a new strategic goal for the next decade, designed to enable the Union to regain the conditions for full employment and to strengthen cohesion by The aim of these measures was to raise the overall EU employment rate to 70% and to increase the number of women in employment to more than 60% by 2010. The Stockholm European Council (March 2001) added two intermediate and one additional target: the employment rate should be raised to 67% overall by 2005, 57% for women by 2005 and 50% for older workers by The Barcelona Council (March 2002) confirmed that full employment was the overarching goal of the EU and called for a reinforced Employment Strategy to underpin the Lisbon Strategy in an enlarged EU. Building on its experience until 2004, and in tandem with the mid-term review of the Lisbon Strategy, the Communication from the Commission on the Social Agenda of February 2005 launched the new Social Agenda for the period In order to achieve one of its two priorities, full employment, the revamped cycle of the EES under the Lisbon mid-term review envisages a new measure to foster contact with concerned players at all levels, to improve EES governance. In its Europe 2020 strategy, the European Commission has increased the target for the employment rate of the population aged 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) 2010 of 3 March 2010.”

17 EU 2020 Strategy The EU’s Europe 2020 strategy targets 75% employment rate for workers ages by 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 across Europe are not working. Source: International Longevity Centre, UK. (2013, September 3). European policy debate: How can we support older workers? [Slide presentation]. Retrieved from

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. This slide is self-explanatory. The key point is the volatile issue of pensions. The instructor will need to read the headlines on the next slide. These can be updated from the aging e-clippings recommended in Module 1.

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 Nutnaree Pakvisate (_Bangkok Post_, April 29, 2014). This slide is simply intended to highlight that pension problems are worldwide. The Center for Demography of Health and Aging at the University of Wisconsin-Madison offers a free E-Clippings service that “provides subscribers with a daily message that highlights important news stories related to aging.” A blog is also available to subscribers. To subscribe, visit Source: University of Wisconsin-Madison, Center for Demography of Health and Aging. (n.d.). Current Awareness in Aging Report (CAAR). Retrieved from

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. Country-specific/dependent on: (These are good classroom discussion topics.) Custom Is there a long tradition of older workers leaving the workforce to make room for younger workers? Mandatory retirement This still exists in many countries, including Canada and India. In 2007 the EU high court upheld those countries’ mandatory retirement laws, stating that although discrimination based on age was illegal, the mandatory retirement of workers at age 65 could be justified to promote social policies like improving employment. The court stressed, though, that mandatory retirement must be accompanied by the adequate provision of pensions for retirees. There are efforts to increase the mandatory retirement age in other countries, such as Finland and Korea. Availability of jobs In many European countries, there is high unemployment (individuals seeking work but unable to find it). This puts more pressure on employees eligible to collect a pension to leave the labor force. There is also migration within Europe, as individuals move to countries that are known to have higher wages and standards of living. This is currently creating bottlenecks. Most older job seekers want part-time or flexible work arrangements. These are not always available. The exception was Germany, which subsidized part-time employment of older workers, but this ended in 2009. Attitudes toward age Older persons are traditionally respected in Japan, but that is not the case in other developed countries.

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. Cultural factors Geert Hofstede has a classic study of country/culture characteristics that helps clarify employee expectations and behavior. Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions and organizations across nations. Thousand Oaks, CA: Sage. The Globe Project: This work at the University of Maryland is an update to the work mentioned above. Students should know these studies from a basic management class. See: See Research Questionnaire at Economic systems Capitalism: In France, there are restrictions on dismissal and hours of work. All EU countries are required to consult with employees. Starting in 2008, organizations with 50 or more employees must consult on an ongoing basis, not just on strategic issues. This consultation is about hours, wages and conditions of employment. In 2008, manufacturing employment decreased in 10 of the 17 economies. The United States had the largest decline in employment (-3.4%), whereas Singapore had the largest increase in employment (+3.4%). Manufacturing output decreased in 13 of the 17 economies in The declines ranged between -0.5% in Belgium to -5.7% in Canada. The U.S. output decline of 2.7% was in the middle of this range. Among the four countries with output growth in 2008, the South Korean increase of 3.1% was the largest; however, this was less than the average annual increases in South Korean manufacturing output for all previous periods shown in the accompanying tables. Source: U.S. Department of Labor, Bureau of Labor Statistics. (2009, October 22). International comparisons of manufacturing productivity and unit labor cost trends, 2008 [News release]. Retrieved from Legal and industrial relations factors No employment-at-will in Europe. Work councils replace informal or union-based mediation. Co-determination: In Germany, this means that employees have the legal right to a voice in setting company policies. Co-determination, including the Works Constitution Act, largely determines HR policies in German organizations, not the employer. Differences remain within the EU.

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

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. Though changing the age of eligibility for pensions will keep many in the workforce longer, there are also multiple HR efforts as discussed throughout these modules that can make work more attractive for aging workers. The next two slides talk about the results of specific programmatic efforts in different countries. Detailed information on good practices is available on the website for the European Foundation for the Improvement of Living and Working Conditions (Eurofound) at

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’. Source: International Longevity Centre, UK. (2013, September 3). European policy debate: How can we support older workers? [Slide presentation]. Retrieved from The material in this slide is drawn directly from The International Longevity Centre-UK. This slide and the next are self-explanatory.

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). Source: International Longevity Centre, UK. (2013, September 3). European policy debate: How can we support older workers? [Slide presentation]. Retrieved from The material in this slide is drawn directly from The International Longevity Centre-UK. This slide and the next are self-explanatory.

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. Instructors can expand on these conclusions. Ask students what they have learned.

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.


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