The skills of older employees are highly valued. Yet companies do too little to develop and make use of this potential. They should focus on targeted development and equitable recruitment.
Demographic change affects companies in two ways. On the one hand, it leads to a rising share of employees aged 55 and over. On the other, since 2020 more people have been retiring than entering the labour market. This sharpens the skills shortage, which immigration at its current scale cannot offset.
Labour-force participation among workers 55-plus is already high today. Employees aged 55-plus also become unemployed less often than younger people. But when they do lose their job, they not only search longer but often have to accept substantial cuts in pay. In addition, a considerable proportion take early retirement not entirely voluntarily, while working beyond the retirement age is still not very widespread. Statistically, however, older employees represent the greatest potential for easing the skills shortage.
In our survey we wanted to find out how companies assess the potential of older employees in the context of demographic and technological change, whether and with what HR-policy measures they make use of it, and which solutions companies consider important besides. In the following we present the first results of our study, limiting ourselves to the findings from Switzerland.
Demographic change is underestimated
The age structure of the workforce matters to the majority of companies. While 38 percent tend to think the share of older employees should be increased, the proportion of those who favour increasing the share of younger employees stands at 44 percent. These intuitive assessments suggest that demographic change has not yet registered with a majority of companies. In the coming years, companies face an ageing workforce on whose resources they will be increasingly dependent.
The skills of workers 55-plus are highly valued
Well over 90 percent of companies value the professional expertise, the professional network and the customer understanding of employees aged 55-plus. Their experience in dealing with change and their contributions to innovation are also recognised by a clear majority. Only when it comes to shaping the digital transformation do barely a third see strengths in this age group. For more than three-quarters, workers 55-plus also contribute to strengthening their employer’s competitiveness.
Companies’ HR practice does not do justice to the 55-plus potential
For around three-quarters of respondents, a practice of retaining and employing this age group up to the regular retirement age is evident at their employer. But nearly half also observe a practice of guiding people into early retirement, while considerably fewer than half (44 percent) observe an emphasis on employment beyond the regular retirement age. And fewer than 20 percent can identify targeted recruitment of people aged 55-plus at their own employer.
Companies’ practice does not meet the expectations of managers and HR
The study’s participants would themselves weight the goals of managing workers 55-plus differently. From the perspective of just under two-thirds of respondents, the targeted recruitment of people aged 55-plus should be a priority. Interestingly, around 70 percent would also set a priority on early retirement and more than half (57 percent) on working beyond the regular retirement age — in the sense of a both-and strategy. Hiring more older employees would make business sense, yet corresponding recruitment activities fail to materialise.
More than 70 percent reply that onboarding pays off for their company from a tenure of four years or less. Nevertheless, around 60 percent of companies generally hire managers, specialists or other employees only up to age 55 or younger. Barely half clearly affirm that all age groups are given equal opportunities in recruitment, while nearly 40 percent would consider this important. Fewer than 10 percent confirm that companies are specifically addressed in the recruitment process. Yet 45 percent would consider this important for their company.
Openness to role changes within the company is greater, but there is hardly any targeted development
A majority reply that role changes are possible at their employer even past the age of 55. However, not even a fifth affirm that their own employer offers career-assessment reviews for employees aged 50-plus, although more than half would consider this important. Likewise, only a third of companies foster career development, role changes or content-related adjustments of roles for their employees aged 50-plus, even though more than 40 percent would consider this important.
Flexible working-time models and occupational health management are more widespread than 50-plus talent management
Between 43 and 64 percent of respondents confirm that their own employer offers flexible working-time models such as annualised hours or part-time work. According to more than half of respondents, their own employer also offers occupational health-management measures in the area of structural and behavioural prevention. When it comes to employee retention, companies thus appear to rely more on these themes than on the targeted development of employees aged 50-plus.
Generational management — reflecting on prejudices and managerial engagement should be strengthened
More than half of respondents state that their own employer fosters age-mixed teams, and just under half that it relies on knowledge exchange between generations. However, only a third identify any engagement by managers or employees with the perspectives and needs of the generations, or any reflection on their own prejudices, at their own employer, while around half would consider this important. And rightly so: it is precisely managers reflecting on their prejudices that could strengthen openness and commitment in recruiting and developing older employees.
The reference retirement age remains a fixed limit — even when performance and conduct are sound
A third deny that employees can choose the timing of the age-related termination of their employment — and not even when performance and conduct are sound. Conversely, two-thirds affirm that employment ends upon reaching the reference retirement age without any further agreements.
Early retirement is promoted more than working in retirement age
In general, retirement practices that deviate from the reference age are rare. Notably, more than a third reply that their own employer promotes early retirement, while about a quarter confirm that their own employer advocates working longer. The greatest interest here lies in having specialists work longer.
For most companies there remains a great deal to do in order to build effective age and generational management and thereby secure their own competitiveness. The participants in this study have recognised the importance of the relevant measures and programmes. What is decisive is that they are actually implemented.
