Saturday, April 28, 2012

United Kingdom: Study Outlines Financial Pressures Keeping Workers Employed after Pension Age

The Pensions Policy Institute has released a study finding that around a half of the United Kingdom's current over 50s will have to save more and work longer if they want an adequate income in retirement. Due to the dramatic increases in life expectancy, the vast majority of the over 50s who are working (around 85%) might have sufficient state and private pension income to meet a minimum acceptable standard of living in retirement if they continue to work and save until they are eligible to receive their state pension, but for many people an income in retirement at this level is unlikely to be considered adequate.

According to "Retirement income and assets: the implications for retirement income of Government policies to extend working lives," around 40% of today’s over 50s who are still working might have sufficient state and private pension income to have a retirement income that would allow them to replicate their full living standards in retirement, and a further 10% of the over 50s might have such sufficient pension income if they continue to work and save for between one and five years after their state pension age. However, 5% of today’s over 50s might have to work and save for between six and ten years after that age and a further 45% would have to work and save for 11 years or more to replicate their working life living standards in retirement.

The report also notes, however, that while the proportions of people working at older ages has increased, many people are compelled to leave work before state pension age due to circumstances beyond their control, such as health problems or the need to provide care for a family member. On the other hand, the report also notes that people in the highest wealth quintile are more than twice as likely to retire voluntarily before reaching their state pension age, than people in the middle wealth quintile, and that those with a Defined Benefit pension are almost twice as likely to retire voluntarily before their state pension age than those with no private pension income.

Sources: Pensions Policy Institute News Release (April 25, 2012); The Independent "Half of over-50s will be forced to work until age 77" (April 28, 2012)

Gallup Poll: Expected Retirement Age in United States Rises to 67

According to a Gallup poll, the average non-retired American now expects to retire at age 67, up from age 63 a decade ago and age 60 in the mid-1990s. Overall, 26% of non-retirees expect to retire before age 65, with 27% expecting to retire at age 65 and 39% after age 65. The percentage that expect to retire after age 65 is up from 21% in 2002 and 12% in 1995.

Gallup also reports it finds a steady, although less steep, increase in the average age at which retirees actually retired, from age 57 in 1991 to age 60 in 2012. The average retirement age first reached 60 in 2004 and has generally held there since. However, Gallup expects that the average should increase in future years if current non-retirees delay their retirement, as they report in the survey.

Gallup also surveyed how well off workers expect to be in retirement:
Younger nonretirees are also more optimistic than those closer to retirement age about their post-retirement financial situation. Slightly more nonretirees under age 40 believe they will have enough money to live comfortably in retirement (48%) than believe they will not (44%). By comparison, nonretirees aged 40 and older are more than twice as likely to think they will not have a comfortable retirement (64%) than to think they will (29%).
Source: Gallup Inc. News Release (April 27, 2012)

Wednesday, April 25, 2012

Germany: Chancellor Merkel Addresses Demographics of Aging, including Workforce

Chancellor Angela Merkel convened and addressed a demographic conference on how Germany needs to respond to its aging population. Among other things, she reenforce the need to to raise the retirement age to 67 "by saying that demographic changes in Germany called for it and added that having more experienced employees would increase companies' productivity," according to a press report.

According to Merkel, "Deshalb bin ich zutiefst davon überzeugt, dass wir Ältere im Erwerbsleben auch wegen ihrer großen Erfahrung wirklich brauchen." She also argues for more flexibility to work into old age and transition into retirement: "Mehr Flexibilität beim Arbeiten im Alter und beim Übergang in den Ruhestand – das ist eine ganz wichtige Sache, die viele auch wollen."

Working is just part of her demographic strategy, which addresses six main points: support for families, putting in place the right conditions for a longer working life, finding ways for older people to choose the way they work, cooperation among federal, state and municipal institutions, securing wealth and growth and limiting state debt. The Cabinet is set to approve this plan.

On the Chancellor's website, there is a copy of her speech to the conference, as well as video of her remarks.

Source: Deutsche Welle "Aging society keeps Germans working" (April 25, 2012)

Tuesday, April 24, 2012

Survey: Older Middle-Income Workers in U.S. Happy To Keep Working

Charles Schwab & Co. has released a survey finding that 76% of middle-income Americans who are between the ages of 50 and 69 say they are sticking with their jobs because they "want to" as opposed to being "stuck" in them because they can’t leave. In addition, 27% say this is the happiest time of their working career, and another 11% believe the best is yet to come.

In other results from the "2012 Older Workers & Money Survey," 59% of workers aged 50-69 say they like what they’re doing, and 49% like the people they work with. Also, 67% consider themselves ahead of the game when it comes to job skills and report being "intellectually stimulated," "still learning" and "working to [their] full potential" at their jobs.
There are some striking differences between people in their 50s vs. those in their 60s when it comes to overall contentment in the workplace. A significantly higher percentage of 60-somethings than 50-somethings say they don’t plan to stop working (34 percent vs. 25 percent, respectively). In fact, nearly twice as many workers in their 60s as 50s say they just don’t want to retire (32 percent vs. 19 percent). The study shows that people in their 60s are more likely to be working part-time and enjoying the flexibility of doing so, liking the people they work with, feeling they would be bored if they weren’t working, and not feeling ready to retire or simply not wanting to.

Conversely, more 50-somethings than 60-somethings feel “stuck” in their jobs, perceiving greater barriers to making a job change. They say they’re sticking with their current employer because they need the money (64 percent vs. 55 percent) or because they feel it would be tough to switch jobs in this economy (52 percent vs. 29 percent) or because they don’t want to start over and lose seniority (29 percent vs. 17 percent).
The survey polled 1,004 middle-income American workers between the ages of 50 and 69 from January 19 through January 30, 2012, to better understand their perspectives and outlook on working, financial well-being and retirement. Respondents had household incomes between $40,000 and $90,000. Results were also reported on workers and their families, and their financial health. The survey also noted that "Older workers tend to serve as mentors to their younger colleagues, with more than two-thirds of them (68 percent) providing advice on a range of topics, including how their younger colleagues can do their jobs better, how to handle professional issues and how to navigate around the organization."

Source: Charles Schwab & Co. Press Release (April 24, 2012)

Saturday, April 21, 2012

Book Review: "Retirement on the Line"

Frank Koller, in reviewing Retirement on the Line: Age, Work, and Value in an American Factory by Caitrin Lynch, says that "Lynch convincingly argues that regardless of age, people 'just want to matter.' With a rapidly aging population, the U.S. has to find ways to better harness the tremendous experience, energy and wisdom of its older citizens."

Lynch's book is the product of five years of research exploring Vita Needle, a small private manufacturing company in suburban Boston, which began to concentrate 20 years ago on hiring workers nearing or over the traditional retirement age of 65 and which now has 49 employees, with an average age of 73 and a few of whom are over 90. Koller says that "Lynch's book, however, asks tough questions about the ethics of Vita's reliance on "eldersourcing" and its relevance to the broader economic challenges facing the nation."
In my writing about the competitive advantages of formal no-layoff policies, this issue comes up repeatedly: why bother with a management system so different from what everyone else uses?

Lynch's answers are similar to mine.

First, Vita's long-term financial success (which the firm argues is directly supported by its hiring of older employees) "suggests that a practice that can be good for business can also be good for workers." It's certainly not about "being nice" to old people.

Second, does any thinking person believe that conventional management systems -- the ones which so quickly shed so many millions of workers in recent years -- are currently working well for the country as a whole?
Source: Huffington Post "Paid Work -- Long Past 65 -- Can Benefit Everyone" (April 20, 2012)

Canada: Older Workers Less Likely To Participate in Job-Related Training

According to a study from Statistics Canada, older workers in 2008 were significantly less likely to participate in job-related training than their counterparts in the core working-age population. In "Job-related training of older
by Jungwee Park, it is reported that, in the year from July 2007 to June 2008, 45% of workers aged 25 to 54 took at least one job-related course or program, compared with 32% of those aged 55 to 64.

Among the factors linked with significantly lower participation in training among older workers were lower annual income, low educational attainment, temporary employment and work in blue-collar or service jobs. Workers in the private sector, particularly those in goods-producing industries, were also less likely to take job-related training.

However, over the period since 1991 when statistics started being kept, the employer-sponsored training gap between older and core-age workers shrank appreciably. Between 1991 and 2008, the participation rate in employer-supported training among workers aged 55 to 64 more than doubled from 12% to 28%, while the training rate for workers in the core-age group, those from 25 to 54, increased from 29% to 38%.

Source: Statistics Canada The Daily (April 20, 2012)

Friday, April 20, 2012

Austria Considers Lowering Working Week To Raise Employment Rates of Older Workers

According to press reports, Austrian SPÖ Labour Minister Rudolf Hundstorfer is in favor of a reduction of the general working hours from 40 to 38.5 per week in order to help keep elderly workers and employees in work longer. In addition, Hundstorfer said that that lowering people’s average working hours could be beneficial to the government’s attempts to increase the average pension age.

Statistics have shown that even though the retirement age for men is 65 in Austria, they are retiring on average at 58.9 years. At the same time, women are retiring on average at age 57.5 years, even though their retirement age is 60. Altogether, Only 42.4% of Austrians aged between 55 and 65 have a job.

The reports are that the SPÖ would create various labor law draft bills and models for the job market of the future. While the Federal Trade Union (ÖGB) announced support for the working week reduction vision, although warning that lowering the working week by 1.5 hours must not mean salary cutbacks, the Economy Chamber (WKO) made clear that it was against a reform.

Sources: Austrian Independent "Hundstorfer ready to reduce working week" (April 18, 2012); FriedlNews "Labor Time: Resistance Against SPÖ´s Plans" (April 17, 2012)

Thursday, April 19, 2012

United Kingdom: Study Finds Older Women Doing the Best in Recessionary Job Market

The Chartered Institute of Personnel and Development (CIPD) has released a work audit report finding that older women have fared best as a group in the recession job market in the United Kingdom. The report--"Age, gender and the jobs recession"--states that women aged 50-64, and men and women aged 65 and over, are the only age groups to have registered an increase in both the number in work and employment rates since the start of the jobs recession and have also registered the smallest increases in unemployment.

Specifically, there are 271,000 (8%) more women aged 50-64 in the labour market than at the start of the recession and 200,000 (6.2%) more in work. Over all age groups, there are 387,000 fewer men in work (a net fall of 2.4%) than in the first quarter of 2008, while the number of women in work is only 8,000 (0.05%) lower.

The report also finds that, the older people get, the more likely it is that they will remain out of work for longer when unemployed, although long-term unemployment rates have increased more for younger than older people since the start of the jobs recession.

According to Dr John Philpott, Chief Economic Adviser at the CIPD:
While a combination of population ageing and fewer people wanting to retire early, either for financial reasons or because of a broader desire to prolong their working lives, is boosting the older workforce, it is older women that are getting most of the available jobs. Just why this is happening requires further examination, though with the modern generation of 50 something women more likely to view Madonna than Grandma Grey as a role model, the economically active older woman is well on course to be ever more prominent in British workplaces in the coming years.

However, the relatively good outcome for older women during the recession is no cause for complacency about the need to continually stress the business case for an even more age diverse workforce as the economy starts to recover, especially with so much public policy action understandably focused on cutting youth unemployment. Simplistic talk about older people staying in jobs at the expense of the young must not be allowed to put a brake on progress toward nudging employers to do even better in coping with demographic change. An ageing workforce presents both challenges and opportunities for employers, who at some point in the not too distant future will struggle to fill vacancies unless they recruit and retain older workers, women and men, in even far greater numbers.
Source: Chartered Institute of Personnel and Development Press Release (April 18, 2012)

Tuesday, April 17, 2012

Australia: Government Proposes $1,000 Bonus for Hiring Workers Over 50

The Australian government has announced that it will budget $10 million for new "Jobs Bonuses" to help tackle age discrimination and encourage businesses to employ older Australian who want to stay in the workforce, among other things providing $10,000 for employers who recruit and retain a mature age job seeker for more than three months. The initiative is part of the "Government Response to the Final Report of the Advisory Panel on the Economic Potential of Senior Australians."

Included in the response to the Advisory Panel report "Turning Grey into Gold" are funds to extend the Corporate Champions program to provide support to employers who wish to promote mature aged employment at their workplace, to extend the Career Advice service by two years to ensure mature age people have access to free, professional career advice, and to promote lifelong learning by expanding education opportunities by adult and community education providers and community organisations to older Australians.

In addition, the government plans to expand the More Help for Mature Age Workers initiative, to now be called the "Investing in Experience - Skills Recognition and Training" program, to allow industries to benefit from improving the skills of their over 50's workforces. To help address age discrimination and stereotyping of older workers, the government will also provide funds to the Age Discrimination Commissioner to address age discrimination, age stereotyping and ageism more generally, and will review Commonwealth legislation to identify age barriers that prevent continued participation in the workforce for people aged 45 years and over.

Source: Deputy Prime Minister and Treasurer Media Release (April 18, 2012)

Reaction: National Seniors Media Release (April 18, 2012); SilverTemp "Employers to get $1000. bonus for hiring older workers" (April 17, 2012)

Wednesday, April 11, 2012

Video: AARP Inside E-Street Looks at Graying Workforce

AARP's video arm has published a three-part series on Inside E-Street about the graying workforce, including an examination of the silver tsunami, workplace design, and how to recruit and retain older workers.

In "The Silver Tsunami," Inside E-Street looks at the changing U.S. workforce and what it means for employers.

In "Changing the Workplace Environment," Josh Kerst, vice president of Humantech and a certified professional ergonomist, speaks with Inside E-Street about the many physical changes that companies can make to their environment to keep employees not only healthy but also more productive.

In "Recruit, Retain, and Integrate Older Workers," Inside E-Street speaks with Samantha Greenfield, a member of Boston College’s Sloan Center on Aging & Work about the cultural transformation that many workplaces must go through.

Source: AARP Inside E-Street: The Graying Workforce (April 9, 2012)

Tuesday, April 10, 2012

United Kingdom: Survey of Industry Employers Finds Preference for Older Unemployeds

EAL (Excellence, Achievement & Learning Limited) has released a survey of 500 industry managing directors and those responsible for HR and training finding that they are less likely to recruit school leavers due to the greater availability of more qualified and experienced applicants during the unemployment crisis. Specifically, 48.2% said the availability of older, experienced candidates who are unemployed made them less likely to offer opportunities to school leavers, and in engineering and manufacturing, almost 70% of employers reported a negative impact on opportunities for young people as a result of current trends.

According to EAL, construction and building services were the industries least affected, with around half of respondents reporting their stance towards school leavers as unchanged by the availability of graduate or adult jobseekers.
Ann Watson, Managing Director of EAL, said: “These findings are a stark reminder of the long-term dangers this country faces if the jobs crisis isn’t resolved. The engineering and manufacturing industry, especially, is already facing a real challenge to develop the skilled employees needed for the future, as existing staff approach retirement age."
Source: EAL Press Release (April 10, 2012)

Singapore: Eligibility, Health Insurance Issues Arising under Reemployment Law for Older Workers

Since Singapore's Retirement and Re-employment Act came into effect on January 1, 2012, a number of issues have arisen, according to press reports. Deputy Prime Minister and Manpower Minister Tharman Shanmugaratnam has stated during Parliamentary questions, that 14 dispute cases relating to the reemployment rights of older workers have been presented to the Ministry, and Minister of State for Manpower Tan Chuan-Jin has called on employers to work with insurance companies to ensure that the medical needs of those reemployed are met.

With respect to the dispute cases, Shanmugaratnam said most of the cases were over eligibility for re-employment, but otherwise that implementation has been smooth. He urged employers to refer to the "Tripartite Guidelines on the Re-employment of Older Employees" which provides advice on engaging employees and in making re-employment offers.

With respect to health insurance, Tan said issues are arising with respect to newly re-employed persons more so than older employees continuing to work for their employer. For those affected, hed said that if "an insurance company does not extend the coverage of the scheme up to the age of 65 and also requires re-employed employees to be re-assessed, the employer should work with the insurance company to address this issue so that the medical needs of these employees can continue to be met." In addition:
Industry feedback drawn from various briefing and outreach sessions has shown that companies have already raised the coverage of their group medical insurance schemes for their employees to the age of 65, or beyond. In such cases, re-employed workers would continue to enjoy medical benefits under their company’s medical insurance schemes. By so doing, they would avoid the risk of being denied coverage for existing medical conditions that were previously covered.
Sources: Channel News Asia "Employers to ensure medical needs of older workers are met: Tan Chuan-Jin" (April 9, 2012); Manpower Ministry Parliament Questions and Replies (April 9, 2012)

Monday, April 09, 2012

U.S. Employers Ramping Up, but Still Unprepared, for Boomers Leaving the Workforce

U.S. employers are ramping up skills training and employee benefits aimed at closing skills gaps left when Baby Boomers retire, and at retaining and recruiting older workers, according to poll results released by Society for Human Resource Management (SHRM) and AARP. Nevertheless, many U.S. organizations are largely unprepared for the brain drain and skills void that talented, retiring older workers will leave.

On the positive side, according to the SHRM–AARP Strategic Workforce Planning survey, 72% of human resource professionals polled described the loss of talented older workers to be "a problem" or "a potential problem" for their organizations, and many organizations have taken actions to prepare for the loss of talented older workers who retire, including the following:
  • increased training and cross-training (45%;
  • developed succession planning (38%);
  • hired retired employees as consultants or temporary workers (30%);
  • offered flexible work arrangements (27%); and
  • designed part-time positions to attract older workers (24%).
On the other side, 71% of those polled still have not conducted a strategic workforce planning assessment to analyze the impact of workers 50 and older who will leave their organizations.

SHRM and AARP have partnered to help U.S. businesses and organizations, and, among other things, AARP offers a free, online Workforce Assessment Tool, providing a snapshot of an organization’s workforce and demographics and analyzes its programs to leverage the talents of its older workers, and the SHRM-AARP Partnership Resource Page includes poll and survey findings, articles, and links to the assessment tool, among others.

Source: Society for Human Resource Management (SHRM) Press Release (April 9, 2012)

Wednesday, April 04, 2012

Survey: Most Boomers Retired at 65, but Some Keep Working

The MetLife Mature Market Institute reports that the first boomers to reach 65 in the United States--those born in 1946--are "retiring in droves." According to "Transitioning into Retirement: The MetLife Study of Baby Boomers at 65," 45% are completely retired, while another 14% are retired, but working part-time. Of those still working, 37% say they’ll retire in the next year and on average plan to do so by the time they’re 68.

The average retirement age for the 1946 Boomers is 59.7 for men and 57.2 for women. Of those not retired, 61% plan to retire at the same age as they planned one year ago.

With respect to those who are retired, 51% say they retired earlier than they had expected, with 40% of them saying they did so for health reasons. Overall, however, 85% of respondents consider themselves healthy, and 96% of the retirees say they like retirement at least somewhat, with 70% liking it a lot.

Source: MetLife Mature Market Institute Press Release (April 3, 2012)

Canada: Best Employers for Workers over 40

The Globe and Mail has announced its list of Top Employers for Canadians Over 40 for 2012, a group of organizations that are "taking care to keep talent in the house longer with programs and benefits designed for older workers."

The winners--Agriculture Financial Services Corporation, Agrium Inc., BMO Financial Group, Business Development Bank of Canada, Canadian Security Intelligence Service, Dalhousie University, Desjardins Group, EllisDon Corporation, Enbridge Inc., HP Advanced Solutions Inc., Manitoba Hydro, NB Power Holding Corporation, Office of the Auditor General of Canada, SaskTel, and University of Toronto--demonstrated their commitment to older workers through various practics:
stable pensions, particularly defined-benefit programs that have become increasingly rare over the past decade; targeted recruitment of older employees; health plans that extend into retirement with no age limit; opportunities for training and development; flexible working arrangements and time off; recognition of previous experience for vacation entitlements; retirement planning; and phased-in retirement working options and mentorship programs to ensure that skills are passed to younger workers.
At the Top Employers for Canadians Over 40 website, detailed information is provided about each of the employers.

Source: The Globe and Mail (April 3, 2012)

Tuesday, April 03, 2012

Older Workers More Susceptible to Salary Envy than Younger Workers, Reducing Overall Happiness

According to a research paper presented at the 2012 Royal Economic Society Conference, the bigger salaries of high flying colleagues have been found to harm self-esteem and reduce life satisfaction in workers over 45, while knowing that your colleagues and peers earn more than you can actually raise your satisfaction levels of those under 45.

In "So Far So Good: Age, Sex, Happiness and Relative Income," Felix R. FitzRoy (University of St. Andrews), Michael A. Nolan (University of Hull), Max F. Steinhardt (Hamburg Institute of International Economics), and David Ulph (University of St. Andrews) investigated households in Germany and found, contrary to earlier research, that the generally negative effect that peer group income had on happiness of workers was restricted to older workers, who are usually less mobile and can foresee their lifetime income. Retired people were much less concerned about income comparison, probably because of more urgent aging and health issues.
Going beyond our cross-sectional focus here, these results may perhaps also provide an additional explanation for the observed trends in happiness in industrialized/developed countries. Due to ageing populations, and shrinking shares of young people (who are likely to experience gains in SWB from increasing reference income and economic growth), average happiness is more likely to stagnate.
Source: University of St. Andrews News Release (April 3, 2012)

Study: Preparing Academia for an Aging Workforce

The University of Iowa Center on Aging and the TIAA-CREF Institute have issued a report calling on academic institutions to start making a more concerted effort to engage with and support aging employees as they continue to work well past the traditional retirement age. According to "Promoting Workplace Longevity and Desirable Retirement Pathways within Academic Institutions," less than 5% of the 187 academic institution HR officials surveyed identified issues pertaining to aging faculty and staff as a top institutional priority, even though financial obligations to these employees constitute the largest growing part of university budgets.

Brian Kaskie, Ph.D., the lead author and associate professor of health management and policy in the College of Public Health and associate director for the Center on Aging, said that "[b]etween 2000 and 2010 the proportion of all professors 65 and older nearly doubled, and the aging professorate now outpaces all other white collar professions." Thus, "[t]he lack of attention being directed to the challenges and opportunities presented by the aging academic workforce is alarming."

According to the Executive Summary:
There was little correlation among programs and retirement pathway offerings. Institutions that rated highly on wellness programs or retirement counseling services did not always offer a variety of retirement pathways. Instead, most universities and colleges appeared to pursue a piecemeal approach toward accommodating and transitioning aging employees; their efforts more often were developed in response to an immediate demand rather than in pursuit of a strategic plan.
Among the report's recommendations for making more aging-friendly academic institutions are that (1) institutions should address attitudes about the aging workforce and identify offerings in wellness programming, counseling services, workplace accommodations and retirement pathways, and (2) focusing on the development of programs that promote workplace longevity and provide employees with information that aids their decision-making about retirement will go a long way toward maintaining healthy and engaged employees who pursue a more predictable retirement pathway.

Source: University of Iowa Iowa Now (March 21, 2012)