1. Workforce Planning: Aging and Employment Module 8: International: Pressures and Lessons Barbara McIntosh, Ph.D., SPHR 2010

2. ©SHRM 2010 2 International Pressures and Lessons Aging is a global phenomenon. Projected labor force changes in EU and G7 countries. Retirement expectations. Economic implications. Work intentions post retirement. International (universal) age-related HR practices.

3. ©SHRM 2010 3 Aging Is a Global Phenomenon All countries face demographic transitions: > Older population. > Slowdown in growth of 20- to 64-year-olds, the primary participants in the labor market (OECD, 2006). Effect on labor market: > Retirees not being replaced in Japan, Italy and France. > Small growth in Germany.

4. ©SHRM 2010 4 The G7 Labor Force Changes: Five-and 10- Year Projections

5. ©SHRM 2010 5 Employment Realities and Retirement Expectations In 2001, the EU set a goal to increase employment of older workers to 50 percent by 2010 (European Council, 2001). The goal in the EU is to raise the effective retirement age by approximately five years by 2010 (European Council, 2002). In G7 countries, retirement from a primary job is at about age 60--slightly later for full retirement (AARP, 2007).

6. ©SHRM 2010 6 2005 Employment Rates for Ages 55-64 in EU-15 CountryWomenMenTotal Austria 22.941.331.8 Belgium 22.141.731.8 Denmark 53.565.659.9 Finland 52.752.852.7 France 35.240.737.9 Germany 37.553.545.4 Greece 25.858.841.6 Ireland 37.365.751.6 Italy 20.842.731.4 Luxembourg 24.938.331.7 Netherlands 35.256.946.1 Portugal 43.758.150.5 United Kingdom 48.166.056.9 Spain 27.459.743.1 Sweden 66.772.069.4 EU-1535.453.144.1

7. ©SHRM 2010 7 Retirement Expectations in the G7

8. ©SHRM 2010 8 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.

9. ©SHRM 2010 9 Headlines Reveal Common Issues JAPAN: “Fiasco over pensions worsens in Diet,” Yomiuri Shimbun, December 14, 2007. GREECE: “Greeks strike over pensions,” Bloomberg News, December 13, 2007. SINGAPORE: “Few Singaporeans dream of retiring young: survey,” Channel NewsAsia, December 13, 2007. CZECH REPUBLIC: “Czech PM sees rocky 2008 over pension reform,” Reuters, Dec. 12, 2007. INDIA: “Pension bill may outstrip wages this fiscal year,” Economic Times, Dec. 12, 2007. KENYA: “State to stop free pension plans for all civil servants,” Business Daily Nairobi, Dec. 13, 2007. NIGERIA: “Pension Arrears Now 2 Trillion Naira (17.188 billion US dollars) - NLC,” allAfrica.com, Dec. 12, 2007. UK: “Ministers blamed for stalled pensions lifeboat,” by Phillip Inman,Guardian, Dec. 10, 2007.

10. ©SHRM 2010 10 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.

11. ©SHRM 2010 11 G7: Reported Work Intentions

12. ©SHRM 2010 12 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.

13. ©SHRM 2010 13 Perceptions of Employer Support

14. ©SHRM 2010 14 Global Differences and Similarities in HR Practices Employee selection procedures. The purpose of performance appraisal. Training and development practices. The use of pay incentives. * Based on assessment of best practices in 13 countries starting in 2002.

15. ©SHRM 2010 15 Age-Related Employment Practices Implemented and Under Consideration in the G7

16. ©SHRM 2010 16 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.

17. ©SHRM 2010 17 Perceptions of Workplace Policies Supporting Older Workers in the G7

18. ©SHRM 2010 18 Staffing the Global Organization Offshoring, outsourcing: Significant increases in the number of jobs moved in the future. Value. Movement to include managerial jobs.

19. ©SHRM 2010 19 Age in a Global Environment Form global HR networks. Promote age in global outsourcing. Acknowledge differences in intergenerational perceptions.

20. ©SHRM 2010 20 Intergenerational Perceptions of Work- Related Competencies in the G7

21. ©SHRM 2010 21 Aging Workforce Learning Modules Conclusions: Individual Level U.S. workers want to work longer for monetary and non-monetary 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.

22. ©SHRM 2010 22 Learning Module Conclusions: 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.

23. ©SHRM 2010 23 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 the were in the past. Creative economic and employment and training legislation needs to be supported. The transition difficulties are shared by virtually all industrialized nations.

24. ©SHRM 2010 24 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.