EUROPEAN PAPERS ON THE NEW WELFARE

The Strategy of the Four Pillars in a Long-life Society

5. Reduction of Working Time and Promotion of Age Management

One key variable is the reduction of work time — not only in order to adapt working time to the changing abilities of ageing workers (e.g. providing more recuperation time) but also to allow for a “transition” beneficial to both worker and firm, which in turn will involve a significant increase in choice and flexibility.
Work-time reduction is essential to facilitating and encouraging work beyond 60. Scientific studies have shown that workers over 60 are no less effective or productive than their younger counterparts. They often have different typical strengths and weaknesses: physical abilities decrease with age, but as we have seen mental and social abilities can improve, especially if the stress level is contained. However, working full time after 60, 63 or 65 will prove positive only for a minority of workers, the highly motivated who are often self-employed or able to work flexibly.
The main benefits of part-time work and of gradual retirement are important for employers (e.g. reduction of costs, increased productivity, lower absenteeism) as company practices show (e.g. Arcelor, Laboratoire Boiron), and also for employees (e.g. reduction of stress and improved health, enhanced job satisfaction, a managed transition between full-time work and complete retirement).
Part-time work has already proven to be an excellent bridge between effective exit ages (e.g. 60) and legal pension ages (e.g. 65). It is often called partial early retirement in countries such as Finland, France and Germany where it has had significant successful practice.
In the longer term part-time work will constitute an ideal extension of work life beyond 65 for various reasons: the need to increase the number of contribution years and improve pensions (especially for women), the desire to remain useful and integrated in one’s company, and the benefits of exercising one’s mental, social and physical abilities.
Measures of reduction of work time, gradual/flexible retirement and part-time work are often relatively easy to put in place, and British or other European firms have experienced benefits in retaining corporate experience and culture, in improving employee satisfaction, in meeting consumers’ age needs, in reducing absenteeism (e.g. French & Swedish firms), and in improving the employer image.

Adequate age management for the future involves of course more than just work-time adjustments. We list here some of the measures being taken in various EU15 countries.
• Career planning: there are positive cases in German, Norwegian and French firms (e.g. Axa France where career planning encourages mobility of functions inside the firm).
• Continuing vocational training and lifelong education, crucially important and becoming frequent in large firms in most countries, with statistics and/or examples in Sweden, Germany, France, the Netherlands and the UK.
• Ergonomics and mobility are being improved in a number of firms, especially in Finland, France, Germany and the UK.
• Seniority wages are being modified, an important measure if discrimination against older workers is to be avoided (eg. Sweden, UK).
• Pension regulations often in the past based on final salary (e.g. the Netherlands, the UK) are more and more calculated on best 10 or 20 year basis.
• Anti-age discrimination: all EU15 member states had to pass legislation before 2006, some countries having passed wider legislation (e.g. the Netherlands) than others.
• Codes of practice containing guidelines for employers and employees have been prepared by governments and adopted by companies in several countries: the UK Code of practice is one of the best; there also exists a European code of practice on age and employment.

6. Conclusions

What would be our key policy recommendations for a wide development of a fourth pillar?
Countries which have been so far successful in flexibly extending work life such as Finland, Denmark, the UK and the Netherlands are countries which have adopted a global approach to healthy and active ageing and to end-of-career management. Indeed, global issues require a holistic approach which I have tried to summarise on the last graph. The constraints on the left-hand side are compensated by new trends in the health and life cycle of individuals and by a redesign of management in an increasing number of firms. Combined, these measures will make for economic and social active ageing in the decades to come.
More specifically, there is an important need for diversity and fairness. Workers enter the labour market at different ages, in different work circumstances and with a wide range of different life expectancies (e.g. in France where the range in life expectancies between men in different categories of work is over 8 years). The retirement age should therefore be in part a function of the arduousness of work and job mobility needs to be developed in particular for workers performing difficult physical or stressful work.
The need for flexibility is also crucial in our societies. If working longer will soon become an unavoidable obligation and if flexibility towards a higher retirement age is to be encouraged by all means, then flexibility on earlier exit must also remain a possibility, especially for manual workers or those performing psychologically demanding tasks.
Most importantly, retirement should become more a process rather than the mere event it mostly remains at present.
Furthermore there is a crucial need for coordinated social and economic policies. Public social and economic policies (e.g. pension reform and employment measures) need to be integrated into and coordinated with company measures and strategies. Any restrictive measures must be accompanied by simple and strong and long-lasting incentives.
And, last but perhaps first, there is a need for a lively and well-informed debate. At all levels – media, trade unions, employer organizations – a broad debate is essential if the trend towards early retirement is to be reversed in the long-term.
Finally, the following additional policy issues need to be addressed:
1. Reinforcement of family policies is essential to increase fertility rates. Countries such as Norway, Sweden and France have relatively high employment rates for women together with relatively high fertility rates and this owing to good family policies;
2. A controlled immigration can also act as a very complementary and often short-term solution to the challenge of ageing in some countries;
3. Improving the quality of work is of key importance. As we have seen well-trained employees working in a good work environment retire later than less qualified ones; the cohort effect means that in future more qualified workers will be working flexibly in service activities and benefiting from continuing training and lifelong education, and thus they will retire later than today.

Figure 4: Model for developing the 4th pillar and senior employment
mulvey-fig4.gif
Source: G. Reday-Mulvay, Geneva Association, 2004.

In conclusion, in a counter-ageing society and in service economies, pensions and work need to be rethought in a flexible and innovative way. Perhaps, as in traditional societies, retirement will once again become a more gradual process with people continuing to make an economic and social contribution until late in life, not only because pensions may become relatively lower but because they will feel like it and society will need them.

References

ANACT, Conference sur la Gestion des Ages dans l’Entreprise, 17 April 2007, www.anact.fr

Guillemard, A-M. (1993): L’âge de l’emploi: Les sociétés à l’épreuve du vieillissement, Armand Colin, Paris.

Lobjeois, G. (2005): “Pour une gestion prévisionnelle des âges dans les métiers de l’assurance”, Futuribles, No. 314, Décembre.

OECD (2006): Live longer, Work longer, OECD, Paris.

Reday-Mulvey, G. (2006): Contribution to the International Age Management Course, Working Beyond 60 — Key Policies and Practices in Europe, Saariselkä, Finland, March 20-24.

Reday-Mulvey, G. (2005): Working Beyond 60 — Key Policies and Practices in Europe, Palgrave, London

Reday-Mulvey, G. (2003): “Encourager une vie professionnelle prolongée: Nouvelles Politiques et Bonnes Pratiques en Europe, Report prepared for Avenir suisse”, Etudes & Dossiers, No. 268, International Association for the Study of Insurance Economics, Geneva.


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