Older workers: A mental change for Finland

At the beginning of the 1990s, Finns were still talking about being allowed to become pensioners, rather than being forced to retire. Retirement was a reward: the earlier the better. Companies wanted young and energetic employees. It has taken more than ten years for Finnish workers and employers to adapt mentally, but the fast approaching lack of manpower has forced a change. 

Returned

Laura Hotnnen, 68, is one of those who have chosen to stay in work for longer. If strong colours are good for you, that must be the secret behind her stamina and working joy. The work place, Eurokangas cloth shop in central Helsinki, is a dream of brightly coloured textiles in the middle of a grey and wintry Helsinki.

"I enjoy being with people and having an independent job."

A young woman, Laura Juslin, enters and chooses some material. She is going to sew herself a skirt and a dress for her sister. Laura Hottien gives her advise; "hand wash only, iron carefully", and you can tell a professional is about. If you've been at it since 1954, the professional knowledge is deeply rooted. Who else today knows of Klingenthal number 1, an old and popular gabardine fabric for trousers?

This is the kind of people we need, say Finnish authorities. The Finnish population is among the fastest ageing in the whole of Europe, and the lack of manpower is already felt in many trades - in particular where professionals are needed. When Laura Hottinen was 65 and newly retired, she went south to enjoy the sun. Then the phone rang. Her former boss said they were short on staff and wondered whether, well, could she possibly come back and work?

”Skiing wasn't good here at home that winter anyway.” 

Taxes an obstacle

Work is sometimes quite heavy, even if she works a shorter week and five to six hours a day. Packs of cloth are heavy to lift. Laura Hottinen stays in shape running and skiing, visits her masseur and spices up her existence with facials and pedicure.

The job is not good economically, however. Income tax is higher than if she were to take out her pension. Laura Hottinen thinks the tax system could be more flexible. She disagrees with those who claim she is taking jobs from young people.

"There is a lack of professionals. This is a demanding trade. We must be able to imagine what the customers plan to do with the materials, we must know different types of cloth, fashion trends, we must give advice on laundry."

65+

The official pension age in Finland is 65, and Laura Hottinen hit that a long time ago. After 51 years in the textile trade, 30 of which she spent as marketing chief, some felt it was time for her to step down - not least her family and friends.

"Everybody is wondering, my sisters are worried. You who have worked for so long, how can you keep up, you don't have to? Some customers probably wonder, too.”

Stop working?

"When I'm 70, maybe then. We'll see.”

Changing attitudes

 There aren’t many 68 year-olds who work, but people retire at an increasingly old age. Behind this change lies conscious work to transform attitudes. Finnish authorities have been running

campaigns for many years to get people to stay in work for longer. The message has been sent out at least since 1996, when a committee suggested ways to improve employment prospects for older workers. The government took note of these suggestions when the national age programme was initiated (1998 - 2002). The key was to provide information and education, and the most important task was to influence public opinion: after the depression in the early 1990s, unemployment was more than 20 per cent, and the oldest workers were the first to go. But there were already sings of an emerging lack of manpower. Labour authorities, workers’ protection, health services within businesses and education were identified as important points of reference. In order to secure a positive development, a network of educational experts was created to pass on what had been learned - not least to business leaders and organisations.

The age programme also initiated extensive research and the development of a measuring instrument, a Tykybarometer which measures work output. When the age programme was evaluated in 2002, there were some positive signs - unemployment was decreasing among older workers, the pension age was increasing, attitudes among employers were changing and there was a growing common understanding of the demographic change. But the real effect could have been delayed.

Turnaround

Now the trend seems to have turned for real, partly thanks to a pension reform which encourages people to stay in work longer. If last year's trend continues, pension age will increase by 2 – 3 years. In 2005 only one in four retired at 63, which is less than expected. The number retiring between the ages of 60 and 62 is also decreasing.

The average pension age is still just over 59 however - up from 57 when the age programme began. The low age is due to many early retirements among young people on incapacity

benefit. The pension reform came into force last year and appeal to people to work longer in exchange of higher pension pay, an extra 4.5 per cent of their earnings. They can choose to retire between the ages of 63 and 68.

“The high employment rate among older workers has helped this development", says Hannu Uusitalo, Director at the Finnish Centre for Pensions, the Finnish pension system watchdog.

More people are retiring than those who start work in Finland today This will continue to be the case for several decades. As a result, employers are becoming more aware of the importance to hang on to their faithful workers.

“This demographic development creates a demand also for older workers, and the pension reform encourages people over 60 to keep working", says Uusitalo.

It is still too early to say whether the pension reform has been a success. A clear picture will not emerge for another four or five years, but the pension reform is aimed at the coming decades until 2050. Apart from getting people to stay in work for longer, the idea is also to move away from the need to increase pension fees.

The future

The future of the national age programme is secured through the Veto-programme, which aims to reduce the large number of young people on incapacity benefit, as well as getting people to stay in work for longer. Project leader Ismo Suksi says the success of the programme depends on the previous campaign, which started the debate on the lack of manpower, and it depends on the pension reform. Businesses are also noticing that they are fast loosing their competent, older workers. But all change happens slowly Three to four years is completely normal.

"It looks as if we're on the right track, but a lot remains to be done."