Japan: Government Falling Short in Ensuring that Employers Hire Older Workers

Kazuo Otsu, writing for the Daily Yomiyuri, examined whether the Japanese government is making good on its goal of a society in which people can continue to work regardless of their age. Japan's steps in this plan have included enforcing the revised Older Persons' Employment Stabilization Law in April 2006, under which companies are obliged to ensure there are job opportunities for workers up to the age of 65, effective April 2013, and implementing the revised Employment Measures Law to prohibit companies in principle from setting age limits for the recruiting of new employees.

According to Tomonari Higuchi, a business consultant in Yamagata Prefecture, "he often hears personnel managers referring to the difficulty of hiring aged workers."

"There's a remarkable number of people who feel they are treated like redundant baggage," said Higuchi, 51. "While there has been progress on a legislative level, in general the genuine intent of companies to hire elderly workers remains low."

Otsu notes, for example, that one job-seeker in his t0's was told "We only have young employees working here" when telephoning a company offering jobs stating no age limit.

Some employers openly admitted that not indicating an age limit was just a matter of expediency. Though the government can issue warnings to companies found to be flagrant transgressors of the law banning most age restrictions, the law itself has no penalty clauses.

Source: Daily Yomiyuri "Work for elderly remains elusive goal" (May 8, 2008)

Research: Employees without Other Health Insurance Less Likely To Retire

A Watson Wyatt analysis of retirement data finds that older workers without other health care insurance options are more likely to defer retirement to stay covered under their employer’s plan. While other factors, such as whether an employee has a pension, also contribute to decisions on when to retire, "employees who rely on their employers for health care coverage and do not expect to receive employer-provided health benefits in retirement are 16.5 percentage points less likely to retire in any given year than workers with access to health care coverage through another source."

The Watson Wyatt analysis--"Predictive Factors for Retirement Timing"--was made on data collected from 1992 to 2004 as part of the University of Michigan’s Health and Retirement Study. Factors other than health care which influence retirement decisions include:

• Retirement plan types. Having only a defined benefit increases the likelihood of retirement by 4.1 percentage points.
• Public policies. The gradual increase of the age at which workers can retire and receive full Social Security benefits from 65 to 67, workers born in the 1940s are less likely to retire early than those born in the 1930s.
• Household wealth. While workers’ household financial wealth obviously has an effect on their retirement decisions, the source of the wealth also makes a difference. For example, a $100,000 increase in expected income from a pension plan is more likely to prompt earlier retirement than an increase in housing equity.

Source: Watson Wyatt Worldwide Press Release (May 7, 2008)

United Kingdom: SME's Looking to Older Workers To Fill Skills Shortages

The Tenon Forum reports that entrepreneurs in the United Kingdom are increasingly relying on older workers to plug skills shortages in their businesses. Tenon regularly surveys small and medium enterprises (SMEs), and its latest research reveals that 30% of SMEs have a strong representation of employees aged over 50, with many businesses utilising the experience of older workers as coaches and mentors for younger employees (20%) or in the capacity of consultants following retirement (12%).

SMEs are looking to older workers to address concerns about skills shortages and that younger recruits are often just not up to the job: 34% report a lack of work readiness amongst graduates and 31% cite poor literacy and numeracy amongst school leavers as a key issue facing their business. Accordingly, 66% of SME leaders agree that the employment of workers aged 50 plus is a good solution to skills shortages, and 22% favor the hiring of older workers over college leavers as a solution to staffing problems.

According to Andy Raynor, CEO of Tenon:

Changes to pensions legislation, combined with the recent age discrimination legislation, are encouraging people to put their retirement on hold and continue working in some capacity, either as full-time or part-time employees, or as consultants. Older members of staff can bring huge benefits to an organisation and we expect to see more and more entrepreneurial businesses taking a flexible approach to recruitment and utilising this valuable skills base.

Source: Tenon Group Press Release (May 6, 2008)

Legislation Introduced in U.S. Senate To Expand Opportunities for Older Workers

Senators Gordon H. Smith (R-OR), Herb Kohl (D-WI), and Kent Conrad (D-ND) have introduced the "Incentives for Older Workers Act," which is designed to provide incentives and eliminate barriers for older Americans wishing to stay in the workforce longer, and encourage employers to recruit and retain older workers.

"This legislation confronts the changing face of retirement. The divide between working and retirement is no longer the bright line it once was. Many workers stay on the job longer, not just because they have to but also because their employers want them to stay," Senator Conrad said. "“What we offer in the Incentives for Older Workers Act would make sure older employees who want to cut back their work schedules won't lose pension benefits as a result."

The proposed legislation (S. 2933, text not yet available) would, among other things:

• remove penalties in certain pension plans for workers who phase into retirement by receiving a lower salary while working reduced hours;
• allow seniors to earn delayed retirement credits for Social Security purposes for an additional two years until age 72, instead of age 70;
• reduce the amount of Social Security benefits lost to seniors who claim benefits before reaching normal retirement age and while they continue working;
• require states to include older worker representatives on the state and local workforce investment boards and set aside five percent of the Workforce Investment Act (WIA) funds to assist older individuals.

Source: U.S. Senate Select Commitee on Aging Press Release (April 29, 2008)

Senate Aging Committee Holds Hearing on Using Federal Government as Model for Hiring, Retaining Older Workers

The U.S. Senate Special Commitee on Aging Chairman Herb Kohl (D-WI) chaired a hearing titled "Leading By Example: Making Government a Model for Hiring and Retaining Older Workers." Kohl believes that "we must encourage employers to adopt policies now to attract and retain older workers" and that it "is possible to craft commonsense policy to create a win-win situation for both older workers and the companies that employ them." As for his focus on the federal government, he introduced the hearings by stating:

Why the federal government? Because nowhere is the foreseen labor shortage more pronounced than within the workforce of the nation’s largest employer. Over the next five years, more than half a million permanent full-time federal employees—or about one-third of the full-time federal workforce—will be eligible to retire. And over the next ten years, more than sixty percent of the federal workforce will reach retirement age.

Others heard at the hearings (with links to their prepared testimony) included:

• Senator Gordon H. Smith (R-OR), Ranking Member of the Committee;
• Barbara Bovbjerg, Director, Education, Workforce and Income Security Issues, US Government Accountability Office;
• Nancy Kichak, Associate Director, Strategic Human Resources Policy, Office of Personnel Management;
• Thomas Dowd, Administrator, Office of Policy Development and Research, Employment and Training Administration, US Department of Labor;
• Max Stier, President and CEO, Partnership for Public Service;
• Chai Feldblum, Co-Director, Workplace Flexibility 2010

A webcast of the hearing is available by clicking here.

Source: U.S. Senate Committee on Aging Press Release (April 30, 2008)

France: Pension Reform Proposals Aim to Retain More Older Workers

Pension reform proposals in France include measures to raise the number of older people in the workforce, including threatening companies with penalties if they do not increase their number of staff aged 55 to 64 and requiring employees to work 41 years, not 40, to qualify for a full state pension.

According to earlier pronouncements from the Labor Ministry, the Government's aim in building on the 2003 pension reforms is, among other things, to increase the level of employment of older people and to promote freedom of choice of everyone to prepare his retirement.

According to a March 25 letter from Minister Xavier Bertrand, the Ministry has just begun a phase of dialogue with all stakeholders and to solicit proposals from the social partners on various aspects of pension reform. At the end of this first phase of consultation, a policy document will be made public, a document on the basis of which discussions will continue with the social partners.

Sources: BBC News " France says 'take on older staff'" (April 28, 2008); Ministrère du Travail, des Relations sociales, de la Famille et de la Solidarité Dossiers (April 4, 2008)

Singapore: Working Group Issues Advisory on Reemployment of Older Workers

Singapore's Tripartite Implementation Workgroup (TIWG) has released a Tripartite Advisory on the "Re-employment of Older Workers" to help companies adopt re-employment early, ahead of its legislation by 2012. The Singapore government is committed to enact re-employment legislation by then to enable more people to continue working beyond the current statutory retirement age of 62--initially, up to 65 and, later, up to 67.

The TIWG has drafted an Advisory that identifies good practices in areas such as pre-retirement planning and re-employment consultation, job arrangements upon re-employment and re-employment contract durations. The TIWG is soliciting feedback from companies implementing the Advisory.

Chairman of the TIWG and SNEF Council member Mr Alexander Melchers said, "Re-employment is a new concept for many employers. The advisory is meant to assist them, by offering practical suggestions to implement re-employment in their company."

In addition,

Mr Melchers added, "For re-employment to work, companies need to start reviewing and implementing changes to their HR systems and policies, including performance management and wage structures. Companies should do this as soon as possible, because this is not a process that can be accomplished overnight." He also said the re-employment of older workers was another way to tackle the increasing problem of a lack of skilled labour in Singapore

Sources: Ministry of Manpower Press Release (April 23, 2008); Today Online "For those over 62, the shape that re-employment deal could take: (April 24, 2008)

United Kingdom: Manufacturers Becoming More Positive about Hiring Older Workers

A report issued by EEF, the manufacturers' organisation finds that manufacturers in the United Kingdom are adopting an increasingly positive attitude towards employing older workers in order to address the challenges posed by continued skills shortages and an ageing population. According to the report--"An Ageing Workforce--How are manufacturers preparing?" (available to registered users)--manufacturers believe older workers are a valuable part of their workforce--more productive and less likely to be absent than younger workers--and that the more physical nature of manufacturing employment is not an impediment to the employment of older workers.

Sixty percent of the companies surveyed cited "loss of specialist skills" as a significant concern. EEF also reports that manufacturing companies are adopting pro-active approaches towards the use of flexible working and managing rehabilitation: rehabilitation and return to work policies are standard in 58% of companies, rising to over 80% of firms employing 250 people or more. In addition, flexible working hours are standard in nearly two fifths of companies with half of companies employing 100 or more people having flexible working in place.

Sources: EEF, the manufacturers' organisation Media Release (April 20, 2008); The Birmingham Post "Employers outline value of experience" (April 24, 2008)

Sri Lanka: Head Hunter Encourages Rethinking Retirement Age

An article in Sri Lanka's Daily Mirror quotes the vetean head hunter Fayaz Saleem suggests that Sri Lanka's early retirement age (55, and in some cases 60) is creating an "an inopportune problem for those who have no choice but to retire and yet have a portfolio of experience that is worthy of a successful company." HR managers should HR departments should reconsider this age cut-off for the benefit of their companies: instead of shunning older workers, they should be recruited and retained because this of their loyalty and experience.

“This generation shows a strong demand for working beyond retirement for financial reasons as much as them wanting to use their skills and experience,” he says. He adds that in order to reintroduce them to the workforce it is important to enforce widespread changes in employer’s practices relating to training, retention and recruitment. The older professional with the aptitude and training for mentoring could see it as a way to remain in the industry for another few more years.

In addition, Saleem notes that, in light of the brain drain that Sri Lanka is experiencing with younger people, it is necessary "to retain this older generation who are no longer interested in lifespan jobs."

Source: Daily Mirror "A Vanishing Workforce" (April 28, 2008)

AMA Announces Webcast on Age Curve: May 21

The American Management Association is conducting a free webcast on "Age Curve: Examining the Changing Demographic Landscape." Scheduled for May 21, 2008, from 12:00 noon to 1:00 p.m. Eastern Daylight Time, the webcast is intended to focus on of the demographic evolution in the United States and on how it will affect markets, product development, customers and "possibly most of all", the workforce.

To register, Click here.

Source: American Management Association Webcast

Survey: Demographic Changes Require HR Professionals To Focus on Talent Management

A study by the Adecco Institute, based on interviews with 5,000 HR professionals, says that a key differentiator for companies competing in the global marketplace in the future will be having HR managers who focus on finding talent, developing talent and keeping talent--what Adecco calls "talent management"--rather than on its traditional filling of vacancies. Globalization in developed countries has increased the demand for skilled and highly qualified labor at the same time as demand for a qualified workforce is compounded by the demographic effects of older workers becoming the fastest growing workforce segment in most developed countries.

The study--"The new role of HR in the future: Talent, talent, talent. Finding it. Developing it. Keeping it."--reports that the average planning horizon of HR professionals today is only 1.1 years. Talent management will require preparation for a much longer time frame. Adecco says HR practitioners can start on this road today by conducting a detailed analysis of their existing workforce and categorizing jobs into functions, families, and groups based on skills.

Once these groupings have been completed, analyze the age structure of the workforce within each function, family and group. Identify areas that are at risk due to impending retirements or intense competition for talent. Create ‘early warning systems’ that will raise awareness of impending gaps in a timely manner. In a world that demands increasingly complex qualifications, "timely" can mean years in advance--a dramatic change from the "just in time" mantra that businesses have been marching to for decades.

Only then can HR develop a strategy to ensure that the ongoing workforce demands of the business will be met.

Source: Adecco Institute Press Release (April 22, 2008)

Manpower Survey of Talent Shortages, Whitepaper Encourage Retention of Older Workers

Manpower Inc.'s third annual talent shortage survey reports that 31% of employers worldwide are finding it more difficult to fill jobs, with skilled manual trades, sales representatives, and technical workers in the areas of production/operations, engineering and maintenance being the hardest to find. Simultaneously, Manpower has updated its whitepaper on the talent crunch, highlighting the growing talent shortages around the world and what businesses, governments and individuals should be doing to adapt their human resource strategies, and encouraging employers, among other things, to take strategic measures to encourage older workers to stay in the workforce must be put in place.

According to the whitepaper--"Confronting the Talent Crunch: 2008"--"employers can increase their overall pool of available
talent by finding innovative ways to prolong an individual’s active working life." Employers should not look at upcoming retirements as cost-saving opportunities, but need to encourage older individuals to stay on. This may involve redesigning jobs, honing attraction and retention policies, maintaining the loyalty of former employees, and fostering inclusivity.

Source: Manpower, Inc. Press Release (April 22, 2008)