Industrialised nations must convince old workers to stay on job to avoid skills gap

FE Team | Published: September 26, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

WASHINGTON, Sept 25 (AFP): Industrialised nations must convince older workers to stay on the job beyond retirement age or face a skills shortage and higher labour costs, a study released today warned.
The study conducted earlier this year for the American Association of Retired People (AARP) by global consultancy Towers Perrin projects that, by 2016, 39 per cent of the population in the Group of Seven (G7) industrialised nations will be aged 50 or more compared with 30 per cent in 1996.
At the same time, the percentage of the labour force that falls in the traditional working age -- 15-49 years-will have fallen from 51 per cent in 1996 to 45 per cent in 2016, the study predicted.
"Many analysts are predicting growing labor shortages in tomorrow's workforce," the study warned.
"Some companies face the near-term risk of losing many qualified, experienced and knowledgeable workers to retirement," it said.
The grey-drain, coupled with the danger of insufficient talent to replace older workers going into retirement, could drive up labour costs as employers compete to take on skilled labour.
Another issue encouraging employers to woo older workers is the increased longevity in developed nations.
Workers who live longer are also likely to have longer retirements, and that raises the question of whether individual, company and government pension funds have the assets to cope.
"The average male, age 65, who retired in 2001 will spend 16 to 18 years in retirement, versus 13 to 15 years on average for those who retired in 1980," the study found.
"This trend raises significant questions with regard to... whether individuals, employers and governments have sufficient assets to fund such extended retirements," it said.
Employers could sidestep the looming crisis by "encouraging today's 50-plus workers to remain in the workforce longer," the study advised.
Indeed, older workers in the G7 countries want to work, on average, an additional five years beyond the traditional retirement age, according to a survey of 8,200 workers in the grouping of countries-Britain, Canada, France, Germany, Italy, Japan and the United States-conducted for the study.
But 60 per cent of workers over the age of 50 said they came up against age discrimination in the work place, and 40 per cent perceived their employer as being reticent to take on older workers, the study showed. Governments and workers also have to take part in the process of encouraging older talent to remain in the workforce.
France, and to a lesser extent Germany, have social models "in which the government plays a fairly large role in the management of workforce issues", which will make changing workers' perceptions of retirement difficult.
But Japan is likely to be the hardest hit by the global greying of the workforce, the study showed.
Not only is its workforce shrinking, but 72 per cent of Japanese workers are aged between 50 and 64, and the Japanese people are the most long-lived on the planet.
Britain, Canada, Germany and the United States also have high percentages of workers in the older age category-more than 60 per cent in all four countries-but, contrary to Japan, their workforces are growing.