South Korean Workforce Continues to Age

According to South Korea's National Statistical Office (NSO), the number of workers over 40 has increased at a fast pace while those in their 20s and 30s is declining. Over all, employees over 40 rose 3.5% to 13.2 million at the end of 2007 from a year earlier, accounting for 56.4% of the total workforce; this compares with 55.1% in 2006 and 53.7% in 2005.

Similar growth in older workers was also seen in older age groups: those in their 50's accounted for 17.5% of the total in 2007 (as compared to 16.6% in 2006), while those in their 60's accounted for 11.2% of the total in 2007 (as compared to 10.8% in 2006).

A report on the NSO results in The Korea Times states:

"With the rapidly aging population, a growing number of older Koreans, including retirees, are entering the labor market as they are forced to keep on working due to inadequate retirement savings. Also, a larger number of the elderly decide to get jobs for reasons other than financial, including health benefits," an NSO official said. He said the majority of older workers engage in lowly paid positions, usually involving manual labour in the services sector.

Source: The Korea Times "Workers Over 40 Takes 56% of Workforce" (March 20, 2008)

Australia: Survey Suggests Older Workers the Key to Growth

Workers aged 55 and older, not generation Y, appear to be the answer to the ongoing skills and labor shortage for Australian employers, according to the results of research by Econtech commissioned by Mercer Consulting. Accordingly, employers should shift their focus from young to old, and particularly older women, to maintain productivity.

Specifically, Mercer reports by 2012, workers in the labor force aged 55+ will increase by 14% while workers aged 25-54 will increase by only 5%. In addition, women aged 45+ will increase by 12% while the number of men in the same age group will increase by only 6%.

According to Head of Mercer’s retirement business, Mr Tim Jenkins, employers--particularly in industries facing increased employment demand--"have to hold onto older workers about to exit the workforce.” In addition, he said:

Australian employers have to re-define what the average daily and weekly job looks like and how it is remunerated in order to hold onto older workers, maintain productivity and keep downward pressure on wages that, according to our research, are forecast to rise at an average annual rate of 4.2% between now and 2012.

On the practical level, he posed a number of questions to employers such as "how many jobs really need to be full-time, all of the time? How many part-time workers are needed to deliver current and future productivity requirements? How do you fill entry level jobs when the available labour force is dominated by experienced 55+ workers?" Employers have to change the stigma around part-time work not equating to a career or a promotion, and "employers are going to have to create more part-time roles as career roles."

Source: Marcer Press Release (March 5, 2008)

Poland: Older Workers Offer Solution to Demographic Challenge, but Must Overcome Prejudices Against Them

Following on the Polish government's proposals to help make people over the age of 50 more active in the workforce, the Warsaw Business Journal has published an article looking at the demographic challenge facing the Polish labor market. While noting that older workers could be what employers are looking for--offering experience, loyalty and flexibility, the article also suggests that "first the significant obstacle of prejudice must be overcome."

Only 41.5% of people aged 50 to 64 were professionally active in 2006, making Poland's employment rate for this group one of the lowest in the European Union, only beating out Malta. According to an Ipsos Poland survey done for Academy for the Development of Philanthropy (ARFwP), high unemployment in the 1990's and the beginning of the 2000's decade forced a large number of older people to exit the workforce in order to accommodate the younger generation, a trend that was further increased by high labor costs.

According to the Warsaw Business Journal article, labor market experts believe "the government's program is not enough to retain seniors in the workforce or lure them back." Instead, Poland needs a wide range of coordinated initiatives, such as the development of NGOs that would specialize in issues facing older people, such as the AARP in the United States.

On another front, employers also need to show more good will and flexibility in the employment of seniors. However, mere sympathy and pity are not arguments which appeal to entrepreneurs, according to Joanna Tokarz, project coordinator at ARFwP. She is quoted as saying: "The employer has to think in terms of the market, and they should be shown the benefits of employing over-50s in the first place." To enable this ARFwP has launched a project called Zysk z dojrzałości ("Profit from Maturity") in cooperation with Britain's Beth Johnson Foundation, to promote "age friendly" strategies and age-management solutions among employers.

Source: Warsaw Business Journal "Veteran workforce" (March 3, 2008)

Europe: Economic Affairs Commissioner Addresses Summit on Demographic Crunch

Economic Affairs Commissioner Joaquin Almunia is warning that European society is at risk of losing its dynamism if it does not develop a coherent approach to an ageing population and decreasing workforce. He spoke at a oned-day summit Friends of Europe conference entitled "Europe's looming demographic crunch". The Friends of Europe says this crunch will be felt dramatically in the years to come, as by 2050, 30% of the population will be over 65 and only two people of working age for each
pensioner.

In his address--"Investing in the future: an agenda for addressing Europe's Demographic Challenge", Alumnia identified the decreasing share of the working age population as a "major factor" influencing stuttering economic prospects. Thus, one prong of the strategies that European states must adopt is to raise employment rates, especially among women and older workers.

The best way forward is to promote flexible working arrangements where employment security for workers is provided by adequate skills. Such a flexicurity approach will help modernise European labour markets and ensure that people have access to employment throughout their working lives. The success of this model relies on active labour policies combined with good education and training systems that allow people to gain new skills whether they are 16 or 60.

Sources: EurActive "Almunia warns of looming demographic crunch in Europe" (February 5, 2008); Friends of Euroipe Press Release (January 31, 2008)

South Korea: Workers Over 65 Are Over 11 Percent of Workforce

According to published reports, workers aged 65 or above accounted for 11.2% of South Korea's total workforce in 2007, up from 10.8% in 2006 and 5.9% in 1985. The National Statistical Office (NSO) reports that the number of senior workers reached 1.52 million in 2007--up 75.1% percent from 869,000 in 1997--as the number of Koreans aged over 65 increased by 66% percent to 4.87 million in 2007 from 1997.

Local companies increasingly prefer to hire workers on an irregular and temporary basis with little job security and lower wages to meet their manpower demand. Older workers who have already retired from previous jobs are willing to accept the lower-paying jobs.

Source: The Korea Times "Senior Workers Account for 11% of Total Workforce" (February 10, 2008)

Europe: Survey Shows More Companies Responding to Demographic Changes, Responsive to Older Workers

According to Adecco Institute, European companies are waking up to the demographic challenge of an aging and shrinking workforce, with an increased number of companies having started to analyze their internal age structure and more large companies planning to hire more employees aged 50 and older in 2008 versus 2007. These are the results of Adecco's second demographic survey: "Facing Europe’s Demographic Challenge: The Demographic Fitness Survey 2007".

Applying its Demographic Fitness Index (DFX), which measures the preparedness of companies to cope with the demographic crunch on a scale of 100 to 400 points, Adecco also shows there is much to be done. Overall, European companies averaged 182 points, with Germany and the UK leading with 186 index points each, followed by Italy (182), Spain (180) and France (174). The DFX measures career management, lifelong learning, knowledge management, health management, and diversity management.

The increase in the number of companies analyzing age structures indicates an increased awareness of the issue: 40 percent of all European firms, up from one third a year ago, have conducted an analysis of the overall age structure of their organizations. Medium-sized firms have demonstrated the most significant improvement over the past year.

However, only in France and the UK has this improved level of knowledge of the age structure, so far, led to an increase in long-term staff planning. In the survey, no European company planned their overall staff needs more than 18 months ahead.

One of the most encouraging findings of the 2007 Demographic Fitness Survey is that more and more of the large European companies are willing to hire older employees. 16 percent intend to hire more older employees in 2008 than in 2007, and the share of companies who plan to hire fewer people over 50 has decreased from 42 percent to 34 percent.

Source: Adecco Institute Press Release (January 31, 2008)