Retirement is a relatively new phenomenon, barely 150 years old, and developed societies are coming to terms with the promises made to the working class off the past that they would be taken care off through national pension programs and a public healthcare system in their retirement years. Admittedly, when these promises were made, most people were not expected to live decades after their retirement nor were the cost of living anticipated to be as high. In the 1850s when the idea of retirement was first established by Otto Von Bismarck, most people worked till they died or till they were unable to work. The labour force participation rate in the US of Men over the age of 65 in 1850 was 76.6% while in 2000 it was 17.5%. The first age of cities, with urbanisation and industrialisation, changed that with more people moving to urban centres, taking industrial jobs and the widespread creation and acceptance of pension programmes. With rising income levels, rather than obsolescence or an inability to work, older men chose to build and finance an exit from the labour force. In addition to this the decline of agriculture as a profession, improvements in healthcare and healthcare accessibility and the introduction of leisure for the mass market made retirement popular and desirable.
Some of the fears of this rapid ageing include lower economic growth, the loss of technical or unique skill sets and finally the financial stress placed on the state to keep to its promises. For countries that have faced these challenges, traditionally they have sought to supplant the retiring workforce with either permanent immigrants or temporary or economic immigrants. In recent years a combination of external and largely non-economic forces have made this option less palatable as domestic concerns of immigrants supplanting the existing indigenous residents have led to growing political movements that have both inspired more closed immigration policies but more protectionist policies as well.
However, these fears need not come to pass if steps are taken to adapt the economic system to encourage greater inclusiveness as well as flexibility. There are a number of modifications that can be made to keep the elderly, if they so choose, in the workforce. Recent developments to have a more inclusive workforce include (1) flexible work arrangements, (2) updating labour legislation and (3) using robots and artificial intelligence.
Flexible Work Arrangements
A number of NGOs that advocate for older employees indicate that many of their members are willing to continue working as long as they could get a fewer regular working hours on a less rigid work schedule. In the American Association of Retired Persons (AARP) Work and Career Study had 72% of their survey respondents indicate that a flexible work arrangement as essential parts of an ideal job with a further 80% indicating that they expected to continue to work but only 6% want to work full time. Flexible work arrangements are not inherently new to businesses that have been introducing them into normal practice though with the intent of targeting the younger workforce rather than older generations. Considering the wide variety of flexible work arrangements, I would suggest the following as places where companies may start.
- When to work focus on flexible start or end times, but employees still end up working the full work week 35-40 hours with the possibility of ‘core’ working hours where all employees are expected to be in the office. Compressed work weeks, where the full week’s hours (or a part—timer’s hours) are compressed into 3 days instead of 5.
- Where to work includes telecommuting from satellite offices or working from home.
- How may involve job sharing, phased retirement plans, ad-hoc or contract work or even per-diem depending on the organisation’s need.
- What they receive will mean that companies looking to re-hire or continue to rely on aging staff may have to re-consider the benefits or perks they offer as workers get older. It is important that companies look beyond remuneration to consider the emotion, social and physical needs of older employees. This may include more paid leave, flexible arrangements for medical appointments or care-giving for ill spouses.
Once considered the bastion of the working mother, flexible work arrangements have to be integral parts of keeping an ageing workforce engaged in meaningful for which they are trained and interested in doing. In Singapore, where we have a tendency to be a bit slower in updating our HR practices and adopting new practices, companies have shown a willingness to adopt flexible work arrangements.
The largest impact can be seen in jobs that traditionally have been done on shifts, with shift schedules being changed and adapted to accommodate older employees that want to continue to work. A few public hospitals in Singapore have already included such flexible arrangements for their nurses allowing many of our older nurses who have no desire to go quietly into the night to do half shifts, or to team them up with more but less experienced nurses who can therefore learn by doing, or even giving them priority to work the hours they want and organising the schedules around them.
Updating Labour Legislation
Many companies and institutions around the world have mandatory retirement ages for a lot of job groups both for white collar jobs and technical professions. In the past this was necessary as a way of creating space in companies for younger people to move up, progress and learn new job functions and also to guarantee that a person could happily retire and receive a pension or other retirement incomes either from his employer or the government. As the demographic pyramid has shifted in recent years where there are fewer new employers entering the workforce to replace and expand the employment in anticipation of business expansion, companies have attempted to re-hire retired staff.
Although the phenomenon is fairly new to Asia, with only Japan and Singapore really impacted by ageing workforces, companies have essentially created a separate labour market to take advantage of these workers. Currently in Singapore under the Retirement and Re-Employment Act, last revised in 2012, employers are not allowed to dismiss any employee below the age of 62 because of their age, and require that they must offer re-employment to eligible employees over 62 up to the age of 65. This allows companies to forcibly retire or “dismiss” an employee after they hit 62 on the basis of age. While allowing people to exit the workforce through retirement is good policy as not everybody would like to work into their 80s, allowing people who are not interested in retiring to be dismissed because of their age rather than their performance is an unacceptable outcome and can lead to situations where companies and organisations begin to take advantage of the situation.
Labour legislation needs to change to include further protections for an aging workforce as well as for employees that have to double up as caretakers to parents that may need additional care such as frequent hospital visits or at home medical assistance that needs to be administered by another person. Protections should be in place to provide both a minimum retirement age as well as prevent companies from firing or retiring their employees without cause. Additionally for labour intensive work is involved, companies should be required to either provide working aids to older workers or at least attempt to re-engineer their process to be a more inclusive workforce.Labour protections should also be included to improve flexible work environments, where possible employees should be allowed to leave to care for aging parents or for young children while compensating employers back for that time in other ways. In essence this has already been done in an informal way on the factory floor through switching of shifts or OT, but has yet to move into the professional setting where leaving the office on time or early, even when you have completed your work, is a sign of weakness.
Using robots and artificial intelligence
It is estimated that approximately 47% of all US jobs will eventually be replaced in some form or fashion over the next 20 years. Current progress in automation and industrial software coupled with a steady drop in the price of industrial robotics will lead the way in create massive job obsolescence in high value manufacturing industries. Currently there are approximately 1.4 million industrial robots in use around the world today and the global installed base for such robots has grown at a rate of 2 to 3% annually for around a decade. In an ironic turn of fate, robots have become better and more precise even as they have become measurably cheaper. However, robotic systems usage are largely limited for the moment in 4 industrial groupings, namely the computers and electronic products; electrical equipment, appliances, and components; transportation equipment; and machinery. Over the coming decades the nature and use of robotic systems is likely to change, with more industries re-tooling to adopt robots, and its ultimate spread from an item only a large multinational company (MNC) to one that small producers and industrialists could adopt.
The problem is that most industrialists globally do not have a game plan for the next phase of industrialisation. In a recent BCG survey, Germany stood out as being the most ready for the transition with as much as 19% of their industries ready for the new technology adoption; however that is still an incredibly low number especially for a country that has been on the fore-front of manufacturing automation. While the robotisation and digitalisation of the manufacturing is expected to reduce the manpower required this process will take a while and there will be a time in between where robots and humans will have to work side by side, where robots improve timeliness and precision while relying on the expertise and intuitive shortcuts of their human co-workers. This is a good transition for a lot of societies that are dealing with birth rates that do not meet the replacement rate while also seeing a greying population. With robots and robotic assistance, older workers can work past their “traditional” retirement age without increasing the risk to their health. These changes are also great for industries that are considered “dirty” or hazardous that does not see a lot of young people pursuing careers in. Not only will these changes allow older workers to be able to work longer and share their expertise, but most of the management surveyed believe that these changes would also see increases in productivity and reductions in costs.
“Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.” – Mark Twain.
Many older people are looking for ways to continuing to make a difference in the world, but finding that the world no longer wants them or considers them economically and socially useless. While changing societies biases and shortcuts can be difficult and ultimately a long-term process, there is clearly a need for Singapore to start being more accepting to older workers. As a society and economy in transition from one that was extremely young in the 1960s to one that will be old in the early 2030s, our entire economic system has to be able to adapt to a working and purchasing class that is far older than previous generations. While government interventions are necessary to prevent abuse and to educate, ultimately it will be left to individuals and individual companies to implement a more inclusive workforce. The only buffer against monoculture and stagnation is a diverse workforce. At the end of the day, economic transformation is at its core a social transformation.
I’d appreciate any comments or ideas that people might have to the thoughts that have been presented here in this essay. Thanks for reading.
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- Staying ahead of the Curve 2013: AARP Work and Career Study. http://www.aarp.org/content/dam/aarp/research/surveys_statistics/general/2014/Staying-Ahead-of-the-Curve-2013-The-Work-and-Career-Study-AARP-res-gen.pdf
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