Contrary to current opinion, the unemployment rate in Switzerland for people aged 55 or over is lower than for younger workers. It stands at 3.3%, compared with 4.9% for 25-39 year olds. Put another way, 97% of the age range remain in labour, according to end 2014 figures from the International Labour Office (ILO), which also take account of those long term unemployed no longer receiving jobless benefits. – Even if long term unemployment for the elderly is more marked, 41% of jobseekers aged 55 and above find a new job within a year. Such statistics demonstrate Switzerland’s liberal labour market is working – something to be noted and protected.
The pressure of the Babyboomers
Despite the statistics, media interest tends to focus on the tragic fates of some long term older unemployed – raising anxieties among those aged 55 or more. There are real fears about losing one’s job in one’s later years. The arrival of the babyboom generation in this age bracket could increase pressures on employers, unions and politicians to introduce extra job protection rules for older workers. Contracts that prohibit redundancy after 58, generous compensation for forced retirement, and so on, would certainly help those older workers already in labour. But they would rigidify the market for seniors and make finding new jobs for the older unemployed that much harder.
Double edged age privileges
Regulations increasing the wage costs of older staff should also be avoided, because they could promote exclusion from the workforce. Hence the idea of automatic age-related pay rises has become increasingly outdated – even if 26% of companies still operate this system. The displacement effect is reinforced by pension costs, which tend to rise with age. The same can be said of the additional holiday entitlements for older workers, offered by two thirds of firms. The accumulation of higher age-related wages, social security payments and holidays can quickly increase a 60 year old’s wage cost by 10% and more
Service years rather than calendar years
Such additional costs cannot always be compensated through higher productivity. That means companies should favour HR policies that benefit all workers, independent of age. Experience and loyalty should certainly be respected. So rules linked to years in service should be prioritised over those based just on age. Anniversary gifts recognise the contribution of long serving staff and help reduce fluctuation, they also put candidates for vacancies with similar experience on an equal footing, irrespective of their age. Such candidates will – by definition – have no accrued years of service – meaning none will suffer discrimination because of their age.
Practical examples of “age neutral” personnel policies
An “age neutral” HR policy does not just increase older employees’ ability to retain their jobs, but also to find new ones.
The SBB (Swiss Federal Railways) no longer uses pictures of young people in its job ads. The reason is to prevent any age group feeling excluded.
ABB links pay systematically to job function, not service age. Occupational pension contributions are evened out and not levied via age bands along the lines of the minimum requirements of the BVG occupational pensions rules.
The St Gallen Kantonalbank offers older workers reaching important anniversaries extra holidays, or training vouchers. The vouchers are worth SFr20,000 for 20 years service and SFr30,000 for 30 years.
The GLB Genossenschaft fur Leistungsorientiertes Bauen (a housing co-operative) lets staff work beyond statutory retirement age, either on an hourly basis or part time. In the latter case, it uses innovative models, such as working five full days on a project, followed by 10 days off.
Sources: Allianz 2012, Mainiera 2013, Merz 2006, SAV 2006, Avenir Suisse