Ageing Workforce and Human Resource Management in German Companies German-Japanese Conference Human Resource Management with Ageing Workforces, Cologne, September 15th, 2010 Dr. Hans-Peter Klös, Head of Education and Labour Market Policy, Cologne Institute for Economic Research (IW) 1
Agenda Underlying Demographic Trends: The Moving Glacier Employment of Elderly Workers: A Rising Tide Human Resource Management: Trends and Good Practices German-Japanese Conference, Cologne, September 15th, 2010 2
Demographic fitness: getting the questions right Demographic Fitness Indicator Structural demographic trends Ability to change demographic trends Ability to adapt to demographic trends Fertility Labour Market Migration Education Innovation Public Finances Source: Cologne Institute for Economic Research German-Japanese Conference, Cologne, September 15th, 2010 3
Germany and Japan: late movers Structural demographic trends and adaptability, scoring 0 (least) 100 (best performance) Strukturindikator 100 90 80 70 60 50 40 30 20 10 0 I P H PT GR SK F CZ E,A A D Mittelwert B L NZ NL UK USA AUS J DK ISL N CAN S FIN CH 20 25 30 35 40 45 50 55 60 65 70 Anpassungsindikator IRL KOR Mittelwert Source: Cologne Institute for Economic Research German-Japanese Conference, Cologne, September 15th, 2010 4
Coping with the demographic change (Towers Perrin survey 2007) Canada, the U.K. and the U.S. are generally wellpositioned because they have fewer demographic and labor market challenges and have more supportive policies in effect regarding the ageing population. In Germany and France, the turnaround is well under way, thanks to farreaching changes recently implemented and apparent political commitment to seeing these changes through. In Italy and Japan, by contrast, more focus is still required because these countries face the toughest demographic challenges of any of the G7 countries rapidly ageing populations, growing longevity and anemic birth rates. Source: AARP (Ed.), 2007, Towers Perrin, Profit from Experience Survey: Perspectives of Employers, Workers and Policymakers in G 7 Countries on the New Demographic Realities. Washington. German-Japanese Conference, Cologne, September 15th, 2010 5
Germany: rapidly shrinking and greying Population, Median Age and Share of 65+ 90 80 70 68,7 Population, in millions 82,0 64,7 60 50 40 34,4 Mean age, in years 43,4 50,4 30 20 10 16,2 Share of 65+, in percent 20,4 34,0 0 1950 1960 1970 1980 1991 2008 2020 2030 2040 2050 2060 Source: Federal Statistical Office,Var. 1-W1, 12. coordinated population forecast; own calculations German-Japanese Conference, Cologne, September 15th, 2010 6
Labour force: declining substantially Population of working age, 20 to 65 years, by broad age groups, in 1.000 30.000 25.000 20.000 15.000 Upper variant, mean population 50 to under 65 years 30 to under 50 years Lower variant, mean population 10.000 5.000 20 to under 30 years 0 2009 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Source: Federal Statistical Office,Var. 1-W1, 12. coordinated population forecast; own calculations German-Japanese Conference, Cologne, September 15th, 2010 7
Agenda Underlying Demographic Trends: The Moving Glacier Employment of Elderly Workers: A Rising Tide Human Resource Management: Trends and Good Practices German-Japanese Conference, Cologne, September 15th, 2010 8
Elderly workers: Germany is catching up Employment-Population-Ratio, 55-64 years, in percent 56 48 51 1995 2000 2009 62 58 56 58 50 65 70 64 63 66 55 58 61 38 38 39 30 30 Germany France UK Denmark Sweden Japan USA Source: EUROSTAT-structural indicators German-Japanese Conference, Cologne, September 15th, 2010 9
Employment of elderly: outperforming total employment Socially secured employed persons by age, march 2000=100 180 160 Total 50 to under 55 years 55 to under 60 years 60 to under 65 years 160,2 140 120 100 132,8 118,5 98,9 80 60 Mrz 00 Sep 00 Mrz 01 Sep 01 Mrz 02 Sep 02 Mrz 03 Sep 03 Mrz 04 Sep 04 Mrz 05 Sep 05 Mrz 06 Sep 06 Mrz 07 Sep 07 Mrz 08 Sep 08 Mrz 09 Source: Federal Labour Agency German-Japanese Conference, Cologne, September 15th, 2010 10
Age-specific activity rates: women on the move by gender and age groups, in percent 55 56 57 58 59 60 61 62 63 64 55 59 60 64 55 64 Men 1996 77,4 71,2 65,3 54,6 47,0 38,1 31,4 26,9 16,4 13,3 63,7 26,3 48,0 2001 75,9 71,8 70,6 64,1 57,1 44,2 35,9 29,8 19,7 14,4 66,9 29,4 46,7 2006 76,8 75,5 72,4 69,5 64,6 52,6 48,0 41,5 30,6 22,5 72,1 37,9 56,1 2009 81,3 79,3 78,1 74,5 70,9 61,3 54,1 48,1 35,6 28,3 76,9 46,7 63,5 Women 1996 52,9 47,0 43,1 35,4 29,0 15,9 12,0 8,9 7,3 5,9 41,8 10,4 28,1 2001 57,2 56,9 50,6 45,0 38,4 23,7 14,9 12,0 10,3 7,4 48,6 13,8 29,4 2006 65,2 59,2 57,4 51,2 47,9 35,6 28,1 23,8 15,6 12,0 56,6 21,9 40,3 2009 69,0 66,8 64,6 60,9 53,9 42,5 35,8 30,2 21,9 16,5 63,1 30,4 48,5 Source: Federal Statistical Office, Altersübergangsreport 2008-03; own calculations German-Japanese Conference, Cologne, September 15th, 2010 11
Agenda Underlying Demographic Trends: The Moving Glacier Employment of Elderly Workers: A Rising Tide Human Resource Management: Trends and Good Practices German-Japanese Conference, Cologne, September 15th, 2010 12
Yesterday Life course Tomorrow Kindergarden Education School 20 Vocational/tertiary education Occupation Family phase Job entry career start Rushhour 40 Occupational routines (Early)Retirement 60 Early education School Bachelor education Job entry Family phase / part-time work Full-time work Part-time work / Master Occupational Change Full-time work Flexible Retirement Education Work, Life, Learning Retirement 80 Retirement Source: Cologne Institute for Economic Research German-Japanese Conference, Cologne, September 15th, 2010 13
Older Age: from deficit to competence From: Ageing is a process of constant de-qualification To: Older people use their experience and networks to solve problems Deficit Model Competence Model Source: Gabriele Maier, University of Stuttgart German-Japanese Conference, Cologne, September 15th, 2010 14
Triple-R of HRM: Recruiting, Retention, Retirement Recruiting Retention Retirement Organisation of Work HR-Development Health Management Employer Branding Recruiting Talent Marketing Intensified Vocational Training Flexible Working Time Telework/ ROWE Performance Remuneration Knowledge Transfer Job-Matching by work-flowanalysis Age-diversified Teams Job-Rotation Career Planning LLL- Techniques Reconciliation Work/family Reconciliation Work/elder care Diversity Management Work-place ergonomy Health prevention OSHA-Circles Mentoring Exit Consultation Life-time accounts Silver workers Source: arbid; Cologne Institute for Economic Research German-Japanese Conference, Cologne, September 15th, 2010 15
Levels of Age Management: three pillars PROBLEMS / POSSIBILITIES MEANS / SOLUTIONS RESULTS / AIMS INDIVIDUAL ENTERPRISE SOCIETY - functional capacity - health - competence - work motivation - work ability - work exhaustion - unemployment - productivity - competitiveness - sickness absence - tolerance for change - work organization - work environment - recruitment - attitudes toward work and retirement - age-discrimination - early retirement - work disability costs - retirement costs - health care costs - dependency ratios - age-management - promotion of physical, mental and social resources - improving health - developing competence - coping with changes - participating - age-management - individual solutions - co-operation between age groups - age-ergonomics - work-rest schedules - flexible working times - part-time work - tailored competence-training - age-management - changing attitudes - preventing age-discrimination - improving age-conscious work policy - changing age-conscious exit policy - better functional capacities - better health - better competence - better work ability - less exhaustion - lower unemployment risk - better quality of life - better total productivity - better competitiveness - less sick leaves - better management - competent manpower - better image - lower work disability costs - less age-discrimination - later retirement - lower unemployment costs - lower health care costs - better national economy - higher wellfare Source: Ilmarinen German-Japanese Conference, Cologne, September 15th, 2010 16
Age stereotypes: removing, but still there weighted answers, percent, 2008 Older workers are less productive, because they are rarely occupied. Older workers are less productive, because they are less interested. Older workers are less productive, because they are underutilizing their experience. 0,6 0,6 3,0 6,9 10,0 9,0 LLL for older workers does not pay off for themselves. Older workers do not really want to push hard any longer. 2,5 2,3 21,1 22,2 yes yes, more or less LLL for older workers does not pay off for the company. Older workers are less productive, because they are to slow. Older workers are less innovative, because they do not refresh their knowledge. Older workers are less innovative, because we do not refresh their knowledge 3,4 5,0 5,0 7,3 22,3 22,0 22,0 26,4 Older workers are mentally on leave, because they are not promoted any more. 7,5 27,4 Older workers are longer sick, if they are sick. Older workers are less sick than younger workers. 6,2 18,2 38,0 31,1 N = 1.328 1.333 Source: IW-Future Panel 2008 German-Japanese Conference, Cologne, September 15th, 2010 17
Age-related measures: a well equipped tool-box Incidence by measure in companies with older workers, in percent,2008 Age-diversified teams 56,3 Older workers as trainers of others 35,1 Job-rotation within different plants 28,0 Regular motivation screening 24,5 Health management 20,6 Reduced workload Job-rotation within company Specific training for older workers 17,3 16,7 16,6 Innovation-teams Seniority-based advancements Part-time retirement 13,1 13,0 12,3 Source: IW-Future Panel 2008 German-Japanese Conference, Cologne, September 15th, 2010 18
Good Practice I: DekaBank-concept - life cycle oriented HR policies The DekaBank tries to support its staff in every phase of life: starting from chosing an education over several career steps, time-out phases for child care or elder care until the person will leave the bank. Thus, both sides benefit from the individualization: the bank uses the triple R management in order to become an attractive employer which has a high productivity and a low staff turnover. The people can show their full potential; they like their work and are well motivated. Award: The DekaBank received the well known HR award Deutscher Personalwirtschaftspreis for this concept of the life cycle oriented HR policies in 2007. German-Japanese Conference, Cologne, September 15th, 2010 19
Good Practice II: ABB-concept Generations learning from one another, growing together ABB is a global leader in power and automation technologies The compnay developed an HR concept tackling the effects of the demographic change This concept contains: Mix of the working generations: age mixed working teams, mentoring couples Competence training according to the individual life phases Knowledge transfer from generation to generation Sliding out of the carreer life using part-time options and telework Occupational health policies: programme fit for life Diverse age recruitment German-Japanese Conference, Cologne, September 15th, 2010 20