Further expanding the employment of older people

BDA AGENDA 02/2024 | TOPIC OF THE WEEK | January 25, 2024

The presented position paper examines the needs, ways and means as well as the necessary reforms required to expand the employment of older people from all perspectives.

Older employees are indispensable for the labor market. Their experience and expertise are crucial for successful teams. In recent years, political decisions and the commitment of employers and employees have led to more and more people remaining in employment in old age. Retirement at 67 is a success story. In 2024, people born in 1958 will reach the standard retirement age of 66. However, the actual average retirement age in 2022 was only 64.4 years - but still with a slight upward trend (previous year: 64.1 years).

However, despite these positive developments, there is an urgent need for action: demographic change will bring a wave of retirements in the coming years, while at the same time fewer people will enter the labor market. The result: a massive shortage of labor and skilled workers. This will not only put a strain on companies, but also on social security systems. More and more people are turning from contributors into beneficiaries. Demographic change is particularly visible in the pay-as-you-go pension system: today there are 53 pension recipients for every 100 contributors, but by 2035 there will probably be 69 pension recipients. However, politicians are avoiding the necessary further reforms.

Specific measures are required to ensure that older people can and want to work longer. The following fields of action are key:

  • Maintaining employability throughout working life through health promotion and further training.
  • More effective use of prevention, medical and occupational rehabilitation to maintain employability.
  • A demographically sound personnel policy through age structure analyses and targeted personnel development.
  • Abolition of early retirement incentives such as the full retirement age of 63.
  • More active use of existing labor market instruments for older employees.
  • Gradually raising the retirement age in order to distribute the costs of an ageing society more fairly.
  • Creation of legally secure and flexible employment relationships beyond retirement age.
  • Reform of social security for working pensioners and the restoration of the equivalence principle.

More on this can be found in the BDA position paper: "Further expanding the employment of older people"