Older people to be encouraged to work for longer

Persuading older people to work for longer is a hot topic in Sweden these days, not least because it was one of two main themes when nine European prime ministers met in Stockholm for the Northern Future Forum on 8 and 9 February. The conference’s aim is to create a meeting place for politicians, researchers and business to talk about important future issues. 

“This kind of conversation happens too rarely. We are often stuck in short-term crisis management, but here we have the opportunity to discuss the long-term prerequisites for growth. It is a rewarding format and does not necessarily need to result in a written document,” Swedish Prime Minister Fredrik Reinfeldt told a press briefing a few days before the meeting.

A new career mid-life

As the host of the Northern Future Forum Sweden was allowed to set the agenda. They focused on two themes; one was female entrepreneurs and how to get more women into leading positions. The other was demographic challenges. The post-war baby boomers are about to retire and are expecting a lot from the welfare society, according to Prime Minister Reinfeldt. We also live in a world with ever increasing global competition, which means we are competing with countries with less developed welfare systems than ours. That means lower taxes and excise and cheaper products as a result. If Sweden is to maintain its present welfare standards it is important to get people to agree to work for longer. After the press briefing the national newspaper Dagens Nyheter carried a piece in which the Prime Minister mentioned the possibility of people having to work until the age of 75. This created a lot of debate and many protests.    

Critics called his suggestion hopeless for those in physically demanding jobs who are often worn out long before the current retirement age of 65. But Fredrik Reinfeldt said his centre-right coalition would never agree to people being sentenced to a shorter working life because their job is tough. Rather than forcing the exhausted nurse in Norrland into early retirement the government wants to identify which abilities she still has and open up possibilities for retraining and a new career. A current parliamentary inquiry into the retirement age also looks at the importance of the working environment to people’s will and energy to work into older age. Fredrik Reinfeldt also stressed the importance of motivating people to work longer rather than applying more forceful incentives. 

“We want to encourage people to work for a larger part of their life, but our main focus will remain on the carrot rather than the stick in order to get people to work for longer. We also want to change people’s perceptions of the phases of working life,” said Prime Minister Fredrik Reinfeldt.

The economy is important

So how will we be persuaded to work for longer? There are several aspects to this, which emerged during the conference ‘Beyond 65: new life chances in the labour market’. It was organised by the government-appointed ‘Commission on the Future’ to run alongside the Northern Future Forum. It looked at the need for more people to work longer and also discussed which incitements and structures are needed to make this happen. The pension age inquiry which will run until April 2013 will look at this, but will also study why people don’t want to work beyond the age of 65. The results are yet to be published, but Ingemar Eriksson who heads the inquiry thinks economic incitements do have an effect. Since Sweden’s pension system changed in the 1990s, each year in work now means more money when you retire. Since the change the number of older people still in work has increased. Other important issues include how work is adapted to suit older people, and the attitudes of employees and employers.

The EU is currently running the research project ‘Best Agers’ which covers eight countries around the Baltic Sea, looking at demography and labour markets, attitudes to age and ways of getting older people to stay in work. These issues are highlighted from three points of view; that of the individuals, businesses or organisations and that of the nation. The project runs until the end of 2012 and this year its results will be compiled and experiences and knowledge spread. Anders Östebo at the University of Gothenburg is one of the project workers. It is a complex and many-faceted area of research, he says. Sweden is doing relatively well with many older people staying in work, but there are major demographic challenges in certain parts of the country where it is already clear there will soon not be enough young people to perform public sector services.

Age-tailored leadership

Getting people to work into older age means mobilising all levels. “Being employable is partly the responsibility of the individual, and people should start around the age of 25 to look at how they can develop skills and how they’ll prepare physically for a long working life. At the same time it is important not to put all blame on individuals. Not everybody has the same possibility to influence their working lives and there are gender and class perspectives to this,” says Anders Östebo.

On a national level there is a growing awareness of these issues, but older people who want to keep working sill meet many obstacles. One is the fact that people have no right to work part time after the age of 65. So far those who seem to have done the least to change things are the employers.

“They are fully focused on tomorrow’s closing of the books, but we need a more age conscious leadership. Each age demands different conditions and you need a leadership which is tailored to this. For older people this could be the opportunity to work more part time and with flexible working hours. Working environments are also very important,” says Anders Östebo.

There are still not many good examples of companies that do these things, but the state owned energy company Vattenfall is one. Their efforts to get older people to stay in work show it is possible to change attitudes. Nils Friberg has for many year headed the company’s ‘Ageing Workforce Management’. He is now retired from that job, but keeps working at the University of Växjö and at the KTH Royal Institute of Technology in Stockholm.

Support from company management 

It all started when he returned to work in Sweden in the early 2000s after being stationed in South America. Around that time a new CEO came in who wanted to do something about what he saw as people retiring far too early. The challenge was to motivate people to work for longer and to create conditions which would make them want to and manage to do it. This inspired Nils Friberg who began working with finding a way to make more people work further into old age.   

“I saw that skills in a technical company like Vattenfall were to a large extent based on experiences which are not necessarily easy to describe. If we could get older people to stay in work it would be easier to pass these skills on to younger workers. The meeting between younger and older labour is important,” says Nils Friberg.

The company management gave its support to the development of a programme called 80/90/100, and which means any Vattenfall employee who turns 58 can apply to work 80 percent at 90 percent pay and with 100 percent pension cover. When the programme was being developed it was decided that it should not have to be linked to ill health - workers were simply to be given the right to apply. The closest line manager would make the decision, and it would be reviewed every six months. Before launching the programme the company organised one-day seminars for all employees over 57 where questions on pensions, economy, lifestyle and the value of work were discussed.

“We worked with a representative from company management, which was important because in that way we could show that the project had support from the very top. It also meant many of the older workers felt the company saw the value of their work and that it mattered. The company signalled ‘it is valuable to us that you stay’,” says Nils Friberg.

Making money

He ran the 80/90/100 programme for seven years and when he stopped the company’s average retirement age was 63.5 - up from 60 when he started.“What we did shows that it is possible to create new values in a company and that it is also possible to break the expectations people have of an early retirement,” he says.

Nils Friberg has interviewed many colleagues at Vattenfall over the years, both those who have taken part in the programme and also those who have left. “In our society we tend to think of retirement as arriving at a long-promised blue lagoon. But if I painted the most beautiful of watercolours and nobody saw it, what is it worth? The value of life and work is activities and engagement which mean something to other people. The loss of work is for many the loss of colleagues. That’s why so many were grateful that we could find a solution,” says Nils Friberg.

When the programme was launched some feared it would mean a loss of revenues. But avoiding early retirements has in fact saved the company millions of kronor. “It turned out output was equally good during the time the people on the programme were at work. What’s more, we got colleagues who were happier and more interested,” says Nils Friberg.