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Employment Strategies for Older Workers

The document discusses the challenges and opportunities for older workers in the workforce, highlighting that companies often view older employees as costly due to seniority-based pay. It presents IBM Belgium's Skill Team as an innovative solution that allows older workers to continue contributing while receiving a reduced salary. Additionally, it emphasizes the rise of 'bridge' jobs and self-employment among older individuals, suggesting a need for recognition and reward of their skills.

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23 views2 pages

Employment Strategies for Older Workers

The document discusses the challenges and opportunities for older workers in the workforce, highlighting that companies often view older employees as costly due to seniority-based pay. It presents IBM Belgium's Skill Team as an innovative solution that allows older workers to continue contributing while receiving a reduced salary. Additionally, it emphasizes the rise of 'bridge' jobs and self-employment among older individuals, suggesting a need for recognition and reward of their skills.

Uploaded by

vania.cia213
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

[Note: This is an extract from a Part 1 text about older people in the workforce.

© The Economist Newspaper Limited, London, 1999

The general assumption is that older workers are paid more in spite of, rather than
because of, their productivity. That might partly explain why, when employers are under
pressure to cut costs, they persuade a 55-year-old to take early retirement. Take away
seniority-based pay scales, and older workers may become a much more attractive
employment proposition. But most employers and many workers are uncomfortable
with the idea of reducing someone’s pay in later life – although manual workers on
piece-rates often earn less as they get older. So, retaining the services of older workers
may mean employing them in different ways.

One innovation was devised by IBM Belgium. Faced with the need to cut staff costs, and
having decided to concentrate cuts on 55- to 60-year-olds, IBM set up a separate
company called Skill Team, which re-employed any of the early retired who wanted to
go on working up to the age of 60. An employee who joined Skill Team at the age of 55 on
a five-year contract would work for 58% of his time, over the full period, for 88% of his
last IBM salary. The company offered services to IBM, thus allowing it to retain access to
some of the intellectual capital it would otherwise have lost.

The best way to tempt the old to go on working may be to build on such ‘bridge’ jobs:
part-time or temporary employment that creates a more gradual transition from full-
time work to retirement. Studies have found that, in the United States, nearly half of all
men and women who had been in full-time jobs in middle age moved into such ‘bridge’
jobs at the end of their working lives. In general, it is the best-paid and worst-paid who
carry on working. There seem to be two very different types of bridge job-holder – those
who continue working because they have to and those who continue working because
they want to, even though they could afford to retire.

If the job market grows more flexible, the old may find more jobs that suit them. Often,
they will be self-employed. Sometimes, they may start their own businesses: a study by
David Storey of Warwick University found that in Britain 70% of businesses started by
people over 55 survived, compared with an overall national average of only 19%. But
whatever pattern of employment they choose, in the coming years the skills of these
‘grey workers’ will have to be increasingly acknowledged and rewarded.
Questions 1 – 4

Choose the correct letter, A, B, C or D.

Write the correct letter in boxes 1-4 on your answer sheet.

1. In paragraph one, the writer suggests that companies could consider


A abolishing pay schemes that are based on age.
B avoiding pay that is based on piece-rates.
C increasing pay for older workers.
D equipping older workers with new skills.

2. Skill Team is an example of a company which


A offers older workers increases in salary.
B allows people to continue working for as long as they want.
C allows the expertise of older workers to be put to use.
D treats older and younger workers equally.

3. According to the writer, ‘bridge’ jobs


A tend to attract people in middle-salary ranges.
B are better paid than some full-time jobs.
C originated in the United States.
D appeal to distinct groups of older workers.

4. David Storey’s study found that


A people demand more from their work as they get older.
B older people are good at running their own businesses.
C an increasing number of old people are self-employed.
D few young people have their own businesses.

Common questions

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Factors include the need to supplement retirement income due to financial necessity, the desire to remain socially engaged or intellectually stimulated, and the availability of part-time work that aligns with personal skillsets. Economic pressures like insufficient savings or rising living costs also play a significant role .

Removing age-based pay scales could make older workers more attractive to employers by aligning pay more closely with current productivity rather than tenure. This could incentivize companies to retain older workers, benefiting from their experience without inflating costs due to seniority .

There is discomfort in reducing pay for older workers because it conflicts with societal norms regarding compensation for experience and loyalty. Reducing pay might be perceived as undervaluing the contributions of senior employees, potentially affecting morale and perception of the employer .

Self-employment or entrepreneurship suits older individuals by allowing them to leverage accumulated experience and networks while offering control over work schedules and the type of projects undertaken. This autonomy and flexibility support a balanced transition into retirement while potentially providing financial stability .

'Bridge' jobs benefit companies by retaining valuable experience and knowledge from older workers while allowing for a phased reduction in workforce size. Older workers benefit from the flexible transition to retirement, maintain social engagement, and potentially supplement their income. This shifts the workforce dynamics towards flexibility and adaptability .

David Storey's study found that in Britain, businesses started by individuals over the age of 55 had a survival rate of 70%, compared to a national average of 19% for all businesses. This indicates that older workers have strong entrepreneurial tendencies and success in business .

'Bridge' jobs are part-time or temporary positions that create a gradual transition from full-time work to retirement. They attract two distinct groups: those who work because they have to and those who work because they want to, despite being financially able to retire. The flexibility of these jobs may appeal more as the job market evolves .

IBM Belgium created a separate company called Skill Team to re-employ early-retired workers. Workers aged 55 could join Skill Team on a five-year contract, working 58% of their time for 88% of their last IBM salary. This allowed IBM to retain access to intellectual capital it would otherwise lose, offering services back to IBM .

The text suggests that the general assumption is older workers are paid more despite their productivity rather than because of it. This perception may explain why employers pressure older workers into early retirement during cost-cutting measures. Abolishing seniority-based pay scales might make older workers more attractive to employers, although there's discomfort around reducing pay for older workers .

An evolving job market with increased flexibility and alternative working arrangements, such as gig work and remote jobs, could generate more opportunities tailored to the preferences and capacities of older workers. This might lead to greater self-employment, entrepreneurship, and the ability to balance work and retirement .

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