By Marie-Charlotte Diriart
Extending seniors’ employability is currently a hot topic for most European countries. European countries are recognizing the value that older workers bring to an organization: experience, institutional memory, wisdom, maturity. In 2010, each member of the European Union must achieve the target of increasing its employment rate of seniors (aged between 55 and 64 years old) to 50%.
In 2008, the average rate of senior employment in Europe was 46%, which is the rate recorded for Spain. Above this average are The Netherlands (53%), Germany (54%) and The United Kingdom (58%). They are finding it difficult to keep up with the lead taken by the top of the class: Sweden, with 70 % of seniors in employment. Amongst the worst performing are France (38%), Italy (34%) and Poland (32%) who are now striving to reach the 50% target.
The way to avoid encourage seniors to delay entry into retirement differs from country to country. Some governments try to increase the age of retirement (Finland, Italy, Sweden, Norway, Germany), while others create incentive measures to hire or maintain senior employment by exempting social security contributions (Italy, Spain). Sweden pays subsidies to companies hiring senior employees, and Finland and the UK promote the positive impact of employing seniors via public campaigns.
Whereas the current economic and financial climate obliges most companies to implement constraints or voluntary departure plans for a large number of employees, French companies have to commit to maintaining or hiring senior employees.
The approach taken by France to reduce this gap is worth focusing on since the French model is distinctly punitive, as opposed to offering incentives. Companies having more than 50 employees are required to take certain number of quantifiable measures which favor senior employment. These companies will be sanctioned with a penalty of 1% of the global gross salaries if they do not comply with these regulations as of January 1st 2010.
In Sweden, all the economic players are fully aware of the challenge. To respond to their ageing workforce, companies are encouraged to take creative measures. Like Vatenfall this publicly owned energy company, which in order to avoid terminating more than 8 000 of its senior employees in 10 years time, has established the “80-90-100″ program: 80% work time provides 90% salary and 100% pension funding. Â Other companies such as SwedBank, a leading bank in Sweden, Estonia, Latvia and Lithuania, have taken similar initiatives.
Different countries have vastly different approaches to attracting and retaining seniors, but it is clear that the initiative is taking hold, and one way or another it will be here for some time.
Marie-Charlotte Diriart is Counsel on Employment at Lovells. Lovells is one of the largest international legal practices with offices in Europe, Asia and the United States.
