Sustainable employment and the ageing workforce: lessons learned from the Dutch

Sustainable employment initiatives in the Netherlands have proven effective in accommodating an ageing workforce. shutterstock

As populations in OECD countries continue rapidly to age, the increasing imbalance between those young enough to work and those old enough to receive the pension is sounding alarm bells. By 2050, the “old age support ratio” is expected to halve; in Australia there will be only 2.3 people of working age to support each person of retirement age.

Understandably, governments facing the fiscal nightmare of increasing pensions and decreasing revenue are trying to keep people in the workforce for longer. Policies that actively discourage early retirement by, for example, raising the pension age are common.

While there is little question that such policies are necessary from the economic standpoint, it is less certain that older people will stand to benefit from working longer, even if they are able to.

A key argument against keeping people in the workforce longer is that certain types of activities – involuntary work, unskilled work, and manual labour – can have an adverse effect on well-being. Raising the retirement age runs the risk of creating a new – “grey” – working class.

On the other hand, when a person’s work aligns with their skills, experience and interests, such “quality” work is likely to benefit their health and social connectedness as well as their income. For older people, working longer could actually improve health and well-being, provided the work is not demeaning, demoralising or physically arduous.

In practice, however, many older people cannot work due to caregiving responsibilities, a lack of up-to-date skills and experience, or poor health. And employers may discriminate against older people — consciously or otherwise — or may not provide the flexible employment arrangements that many older workers need or want.

In this mix of pros, cons, and feasibility issues, certain interconnections are apparent. If working conditions were more conducive to good health and well-being in the first place, there is every likelihood people could continue working into later life quite comfortably and happily. Caregiving responsibilities for unwell partners might diminish too. And if throughout their working lives people were continually upskilling, there would be no outdated skills problem, which in turn would nullify at least one reason for age discrimination.

This promising virtuous circle is encapsulated in the concept and practice of “sustainable employability”.

Broadly, sustainable employability refers to a person’s ability to gain or maintain quality work throughout their working lives, whilst maintaining good health and wellbeing and having the opportunity and the right work context to be able to transfer skills, knowledge and competencies to another job, company or other future roles. Government, employers, employees and society have an important role to play in promoting, debating and developing sustainable employability. Governments, employers and employees must also implement policies and programs to put it into practice. Employees need to become entrepreneurs of their own life and career development.

Steps towards sustainable employability are being taken in Australia. For example, “Ageing well, ageing productively” is a national research priority. Funding is also available to help organisations support employees to undertake further qualifications, thereby increasing their skill levels and prospects for future mobility. But we could learn a great deal from the Netherlands, where the sustainable employability mantra is being embraced by a growing number of organisations and businesses, thanks largely to the efforts and foresight of the government.

As the Dutch realised, government must act as a catalyst to overcome potential resistance from employers about implementing sustainable employability practices, and to demonstrate it pays financial dividends.

This is exactly what the Dutch Ministry for Social Affairs and Employment has done. The Ministry brought together from different industries 100 small and large employers – all early adopters of sustainable employability – and asked them what they do, what works well, and what the return on investment is.

The findings, presented to the Dutch Parliament in October 2012 in the report Manifesto of 100 employers and sustainable employability, demonstrate a strong business case for sustainable employability. Some organisations recouped their investment in sustainable employability programs within one or two years. Organisations found that investing in programs to improve staff’s physical and mental health, for example, reduced sick leave, increased productivity, and secured them a reputation as an employer of choice.

The Manifesto also provides a framework for implementing sustainable employability practices, and identifies five key success factors to invest in: staff engagement, organisation of work, health, development (education and mobility), and periodically measuring the sustainable employability of current staff.

Recognising that the best advocates are businesses that have implemented sustainable employability practices themselves, the Dutch government is running a series of activities to help them share their knowledge and experiences in health, education and mobility programs with other businesses. Many of these activities could easily be replicated in Australia.

Monthly employer meetings in collaboration with industry and regional organisations could implement actions that improve sustainable employability. The majority of small and medium enterprises (SMEs) have not been introduced to the concept and importance of sustainable employability because often the day-to-day to running of the business has priority.

SME representatives could promote the benefits of sustainable employability by holding local masterclasses, presenting at regular employer conferences or instituting awards for businesses that excel in sustainable employability.

Innovation centres could assist SMEs and their employees to develop action plans to implement sustainable employability practices by joining learning networks, or through in-depth workshops or individually tailored business advice.

A central funding resource for employers could be established (similar to what the European Social Fund has done) to stimulate investment in sustainable employability.

Australia could develop its own Manifesto of 100 employers and sustainable employability.

Companies that participate in developing such a Manifesto could give one-on-one advice to at least two other employers. Those employers in turn would be obliged to assist two other employers. And so on.

Sustainable employability has the potential to transform an impending crisis into a promising opportunity in which both individual well-being and the national economy stand to benefit. Learning from other countries like the Netherlands, and putting sustainable employability firmly on the map of public debate, can help us develop further initiatives and accelerate the process in Australia.