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“The need to improve the labour market participation of older people has gained heightened attention in recent years, especially in view of the significant demographic changes the European Union (EU) will undergo due to population ageing. Indeed, population ageing is one of the most important challenges facing the EU, posing a threat to its macro-economic performance and competitiveness. In this context, increases in participation and employment rates for older workers are essential to help sustain economic growth, reinforce social cohesion and the adequacy of pensions, and manage the rising financial burden on social protection systems”. European Commission (2007: 6).
EURELECTRIC, EPSU and EMCEF have been promoting equality and diversity as a priority through the European Social Dialogue in Electricity. They have produced a previous Toolkit on Equality and Diversity, with a particular focus on gender equality. In this Toolkit on Demographic Change in the Electricity Sector we examine the specific issues that arise from demographic change in the electricity sector and show how age management strategies designed to promote age diversity are central to giving companies the competitive edge in their business operations. While age management is a relatively new area of development, this Toolkit shows that electricity companies are already developing strategies and policies on age management.
The management of demographic change and measures to promote age diversity are underpinned by European anti-discrimination legislation, which makes it illegal to discriminate against older workers. This is particularly important because many older workers experience age discrimination in areas such as recruitment, promotion and career development. Preventing age discrimination and recognising the positive benefits of equality and diversity on the grounds of age can have enduring business benefits for companies seeking to retain and develop older workers.
By virtue of the EU Employment Framework Directive (2000/78/EC) discrimination is outlawed on the grounds of age in employment, self-employment and occupation, vocational training and guidance, and in the membership of organisations. The social partners are encouraged to work in partnership to remove age barriers in job recruitment, training and promotion, and in removing negative stereotypes about older workers. Transposition of the Directive was set for 2003, although some member states were given an additional three years, and the new member states were given until 2007 to transpose the Directive into their national legislation. The Directive provides an important framework for removing age barriers and discrimination in employment and to promoting a work environment based on principles of equality.
Age diversity is an integral element of company strategies and age management needs to be seen within the broader context of equality and combating age discrimination in the workplace. For this reason employers need to ensure that they comply with anti-discrimination legislation so that their policies, practices and procedures do not directly or indirectly discriminate against older workers.
“A growing number of European companies are adopting diversity and equality strategies not only for ethical and legal reasons but also for the business benefits they are expected to deliver. Among the most important of these benefits are enhanced employee recruitment and retention from a wider pool of high quality workers, improving corporate image and reputation, greater innovation and enhanced marketing opportunities”. European Commission (2006)
This Toolkit has been prepared by the social partners in the European Social Dialogue in Electricity, represented by EURELECTRIC, EPSU and EMCEF, who have identified demographic change as a major challenge facing the electricity industry. A survey of electricity companies was carried out to inform the contents of the Toolkit, from which more detailed case studies were drawn up.
The survey of 22 companies, from which more detailed case studies were drawn up, has helped to inform the Toolkit. (The case studies include: Vattenfall, Sweden ; EON-Energie, Germany; Axpo, Switzerland; Agder Energi, Norway; RWE, Germany; Statkraft, Norway; Endesa, Spain; CEZ, Czech Republic; and Suez, France).
In summary the results of the survey are as follows:
1.The extent to which companies are affected by demographic change
Twenty out of 22
companies responding to the survey stated that demographic change resulting from
the ageing of the population was affecting their company. While some companies
do not currently face major problems, all companies identified future
challenges arising from demographic change, particularly in the next ten years.
Sixty-eight per cent of Norwegian companies were affected in some way by
demographic change. The Austrian electricity provider, Salzburg AG for Energie,
Verkehr und Telekommunikation, stated that by 2015 more than 50 per cent of
employees will be over 50 years, and 75 per cent will be over 45 years. Fortum
Ouj in
2. The main challenges facing electricity companies in relation to demographic change
A number of challenges were identified by companies. The principal concerns were related to how companies can retain and hold onto the knowledge and experience of older workers, attract and recruit younger people, and develop the skills and competences of the workforce.
In summary the main challenges include:
3. Specific initiatives taken by companies in addressing demographic change
Eighteen out of the 22 companies responding to the survey had carried out specific initiatives relating to demographic change. These ranged from specific age management policies being integrated into corporate and human resources policies, knowledge transfer programmes, talent management and skills development programmes for all workers, building age diverse workforce teams, specific programmes to recruit younger workers, health and well-being programmes, and flexible working initiatives for older workers.
Examples of initiatives include:
As restructuring, deregulation and
technological advance in the electricity industry continue to gain momentum
across
Managing an ageing workforce to ensure competitiveness and sustainability
Demographic change has become a major challenge for all European countries. Electricity companies increasingly need to accommodate a more age diverse workforce, including an ageing workforce in the future. The management of age diversity presents new challenges for companies who will need to adapt to demographic change if productivity, competitiveness and innovation, are not to be effected. A key challenge for employers is to find ways to retain the capability and competence of older workers for as long as possible. In particular this means ensuring effective intergenerational transfers of experience and skill so that competencies and knowledge can be retained and passed onto younger workers. In the past many companies relied on early retirement to manage changes. Today this is not an option for many companies. Successful strategies for age management recognise the importance of investing in the long-term in the training and health of the workforce.
Valuing and retaining the skills and experience of older workers
Organisations can benefit from the experience and skills of older workers in a number of ways. First, recruiting and retaining older workers can help to plug skills gaps, retain and maintain valuable skills, and provide continuity and valued knowledge as organisations embark on organisational change programmes and restructuring. Second, it can be cost-effective to hold on to older workers and develop learning and development programmes to retain and develop older workers skills and improve their health. Third, intergenerational knowledge transfers can provide an important impetus to increasing motivation at work and in providing challenges for older workers.
Age diversity: tackling age barriers and age discrimination in the workplace
Age diversity is an important element of age management. This is particularly important as some older workers face age stereotyping. For example, stereotypes include not being regarded as healthy or as competent as younger workers, not as flexible or open to change, or unable to adapt to new skills and challenges. Age discrimination can also take many forms, for example, excluding older workers from promotion and training, age limits in recruitment advertisements and refusals to hire older workers, reducing job responsibilities of older workers, encouraging older workers to retire early as a strategy for dealing with redundancy.
While some older workers may not be able to perform all of the tasks required of them, this does not mean that their skills, knowledge and competencies cannot be applied to other tasks. Breaking down age barriers does require a change in mindsets and this is as important to company culture as it is to the attitudes in the workplace to older workers. Age diversity has a number of benefits for organisations. By recognising the talents and experience of older workers, and having a balance of older and younger workers in the workplace, companies are able to respond more effectively to the competitive and restructuring challenges they face. Age diversity is closely connected to age equality, and as in the case of gender equality, there are clear benefits and a business case for equality and diversity for organisations that seek to be good practice employers that are able to recruit and retain the best and most talented workers.
A corporate culture that promotes a strategic and comprehensive approach to age management
Successful approaches to age management are those that are embedded in a corporate culture that recognises the importance of age diversity and the need to manage an ageing workforce. This requires a strategic and comprehensive approach to age management. An essential element of this is workforce planning and identifying future skills needs, and matching these to the existing workforce.
Ensuring that line managers are effectively trained to implement company policies and promote age diversity
Often the main barriers to implementing change can result from a lack of awareness amongst manages themselves. Line managers in particular play a key role in retaining and developing the skills of all workers, including older workers. Training managers so that they can respond effectively to the diversity of the workforce is crucial to the implementation of age diversity policies.
Integrating age management policies and strategies into the social dialogue between unions and employers
The social partners have a key role to play in age management and in forecasting future employment and skills needs. Many unions and employers recognise the importance of social partnership to successful age management strategies. There are a number of ways in which the social partners can contribute to these perspectives. Trade unions bring insights into worker’s preferences, needs and priorities, they are able to assess how improvements in working conditions can be made to retain older workers, and they can provide important perspectives related to health and well-being, age diversity, equality and lifelong learning. Best practice approaches include the development of joint projects and initiatives between the social partners to test and develop new initiatives, collective agreements that are age-neutral and that are also responsive to the needs of older workers, and measures to forecast change and skills needs.
“[There
is] a powerful economic imperative for age management in employment. It will no
longer be possible for employers to bank on a sufficient supply of young
workers: increasingly, they will have to confront the ageing of their existing
work forces” (Naegele and
Age management policies will be important to electricity companies in the future as companies develop new strategies for managing an ageing workforce and in attracting a young workforce in order to be competitive and productive.
In the past electricity companies put in
place strategies to reduce the workforce, rather than recruit new staff as a
response to restructuring, and in some companies in
The costs of not maintaining and enhancing the skills of the workforce could have implications for company profiles and competitiveness. Promoting age diversity by retaining older workers has become important to ensuring that workers are trained to keep ahead of technological changes, that their health, well-being and working conditions are enhanced, and the transfer of knowledge is more effective. It is also important that modern day employment practices create the conditions for meaningful employment. This applies to all workers, but particularly to older workers, as companies seek to recruit and retain the best workers.
The management of a diverse workforce is critical to effective human resources strategies. Line managers, in particular, play a key role in the decision making process of older workers as they approach retirement or in making decisions whether workers take up training or career development. Often attitudes to older workers are based on inappropriate stereotypes and discrimination. Research shows that older workers are as just as productive as and perform as well as younger workers. Older workers often use experience to offset any decline in physical or cognitive ability and they are as capable as any other age group of learning new skills. Indeed, it is a myth that older workers are not interested in their careers and self development.
Understanding the productive capacity of a worker is central to human resource management and in planning for future workforce skills. This is particularly important because there are no significant differences in job performance between older and younger workers. The capacity of workers to maintain productivity as they age is influenced by a range of factors including their occupation, working conditions and lifestyle. Because older workers have poor access to training to help them to deal with rapid changes in the electricity sector, productivity decline is often attributed to age rather than lack of training.
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