Wednesday, December 08, 2004

 

Welcome options for older workers

Wonder if it's coincidence that these two articles appeared on the same day? (Yeah, it probably is.)
Moving the Finnish line at work

Finland has one of the most rapidly ageing populations in Europe, easily outstripping the UK. Until recently this was coupled with a low level of employment of older workers meaning the country was heading for a severe labour shortage.

That was until the advent of a new concept called "work ability" which has had dramatic results and seen governments from Europe to Australia wanting to know more.

The small industrial town of Valkeakoski in western Finland gives no outward indication that it is at the leading edge of a social revolution. Nestling among forests of birch and pine 145 km (90 miles) outside Helsinki, the town is dominated by the paper industry whose water-hungry factories line its three lakes.

But inside the biggest of those mills, UPM-Kymmene's Tervasaari plant, a quiet but steady change is taking place. Almost 40% of the workforce here is over 50 but rather than winding down for retirement, they are being encouraged to stay at work. They are given extra training, moved to more appropriate jobs where possible and treated as the wise elders of the company.

"The main target is to keep people longer in working life and to create such health conditions that they can stay longer to get additional training and support," says Personnel Manager Turkka Heinelo.

He gives the example of a 60-year-old male worker who was doing one of the most prestigious jobs on the shop floor: operating the vast paper milling machine which runs 24 hours a day.

He started to find the job too much to handle so he was allowed to move to day shifts and stayed in the same unit as a reserve man. This way, his vast experience of how to do the job was not lost - and he retained his status and self esteem too.

Workers are given special reviews at ages 53 and 59 where they are asked if they need any more training, given the opportunity to talk about problems with working life, and advised on retirement issues.

The first of several initiatives at Tervasaari began in 2000 and has already borne fruit: within three years the average retirement age at UPM has risen from 57 to 59.
The company has been held up as a model of "work ability" a complex holistic concept that the Finnish government has been promoting since 1998.

Work ability looks at the interplay between all the factors that enable a person to function well in a job. It aims to balance the personal factors such as health, skills and motivation, with the job itself: how it is managed, what the working environment is like and what the role actually entails.

"Naturally you do decline physically but a lot of cognitive functions improve with advancing age," said Professor Juhani Ilmarinen from the Finnish Institute of Occupational Health, a key player in the work ability programme.

If employers do not understand that their workers are changing as they age and change the work accordingly, he said, then all they see is decline in productivity.
"We have been blaming the wrong source - the human beings - saying 'you are poor' although really it's the job that is poor."

Instead, the work ability programme aims to convince employers to tailor their work to individuals as they age - and also to improve those individuals' health and skills or knowledge needed for the job.

Finland launched its work ability programme in 1998 after a long trend of early retirement, funded by generous state hand-outs and intensified by the laying-off of older workers during the recession of the early 1990s. But by the mid 1990s the government realised that it could no longer afford to pay for people to leave the workforce in their early 50s. Also a labour shortage was looming as the population was ageing much faster than the EU average. By 2030, Finland is projected to have 26% of its population over 65 - a figure the UK is not due to reach until 2051.
Retirees Return to the Grind, but This Time It's on Their Own Terms

When Marion Stickle retired in January, after 25 years at Procter & Gamble, she had had enough of the grind. "I'd worked hard 50 hours a week, tried to raise a family, and was worn out," said Ms. Stickle, who had coordinated the artwork on the company's products. "Something had to give."

But her skills, it turned out, were not easy to replace. Within a few months, Procter & Gamble wanted her to come back. Through a new program designed specifically for retired professionals, Ms. Stickle returned to the company on a part-time assignment that lasted five months - exactly the situation that many older workers or retirees say they want, but that companies face formidable hurdles to offer.

"It feels different," Ms. Stickle, 55, said of her return. "I have enjoyed the work. I'm enjoying the more relaxed pace of my life right now."

To do so, she had to get around decades of government and corporate policies that have made it difficult for older workers or retirees to remain on the job part time. "When the baby boom was coming in, the goal was to drive older workers out of the work force because you had younger ones coming in at a lower price," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "We're entering a period where there won't be as many young workers. So now companies have to reverse those policies to keep older workers in."

While some other companies are rewriting their retirement policies to keep older workers from retiring, Eli Lilly and Procter & Gamble identified a different talent pool: retired professionals who wanted to return to work on a limited basis.

In surveys, older workers say they would like to scale back their hours, in "phased retirement," rather than leave altogether. Some need the money; others want the challenges or camaraderie.

But current tax laws, protections against age discrimination and corporate pension policies all make phased retirement difficult for workers and companies, Mr. Penner said.

Many older workers with traditional pension plans would be hurt financially if they reduced their hours because their pensions are based on their earnings in their last working years. If they want to work part time, Mr. Penner said, they have to leave the company. Also, each year they put off retiring means one fewer year of collecting their pension. And new retirees cannot return immediately to their old companies without risking tax penalties for both the employer and the retiree.

In November, officials at the Treasury Department and Internal Revenue Service addressed one obstacle to phased retirement, proposing changes to allow workers older than 591/2 to work part time and collect part of their pensions. "That solves part of the problem, but there's still a lot more to be done," Mr. Penner said. "This is still a back-burner issue" for both lawmakers and corporate executives.

Barbara Sailer, 62, retired from Procter & Gamble in 2001 to start a marketing business. At the time, she had no interest in slowing down. But the economy faltered, and the business never took off. So she took an assignment with YourEncore, returning to Procter & Gamble part time. She works from home and takes time off for mission trips to build houses in the developing world.

In her new role, she said, she does not have the stress of office politics or of constantly jockeying for promotions. "They didn't have to train me, and they don't have to worry about me giving away trade secrets," Ms. Sailer said. "They gained tremendously, and I do as well."

When her assignment ends next June, she said, she hopes to find one elsewhere. "When you retire, you don't necessarily keep up the old relationships," Ms. Sailer said. "It's great to be back in an environment that has expectations and personal contact."
People are living longer, and staying healthy and active longer. Some of them are going to have to work longer because they can't afford to retire, but many may not want to retire simply because they have reached a certain age. The bargain always was, work until you're 65 and then enjoy your few remaining years; meanwhile, some young person got to take over your job. All that is changing as we have more older people and fewer younger ones.

We need flexibility and freedom, we need innovative programs to make use of people who are still productive and capable of contributing. We also need to make sure that those who want to retire (or who need to or who have to) can do so in comfort and security. It's good to see what these two articles point out, going on.
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