40% of workers currently aged between 50 and 64 would like to continue working beyond retirement age, according to a survey conducted by Deloitte.
Switzerland’s growing demographic imbalance is not only putting pressure on Switzerland’s social security system but also reducing its pool of labour. According to UBS, by 2030, the Swiss labour market will face a shortfall of between 230,000 and 500,000 workers.
Labour market participation decreases significantly starting at 60. Many older workers are leaving the labour market before statutory retirement age, even if a majority are doing so voluntarily. The 65-69 year-old age group have a relatively low participation in Switzerland (23%) compared to the OECD average (27%).
Deloitte Switzerland surveyed of 1,000 individuals aged between 50 and 70. 40% of people between 50 and 64 years old working said they are willing to work beyond the age of retirement. 35% would like to continue working part-time and 5% full-time. This would translate into an additional 578,000 people in the workforce.
Mobilising this group could fill a significant part of gap forecast by UBS for 2030,” says Michael Grampp, Chief Economist at Deloitte Switzerland and co-author of the study.
However, comparing the relatively high willingness to work beyond retirement age with the actual labour market participation of those already over retirement age reveals a significant mismatch. In 2018, just 23% of 65-69 year-olds were still actively employed, a much lower figure than the 40% above.
Some of the difference might be explained by mindset, suggests the report. The existence of a statutory retirement age might lead some to automatically retire at that age.
Lack of opportunity could be a reason too. According to the survey, 66% of respondents who are already retired were unable to continue working. Of this group, 46% would have actually liked to do so – equivalent to almost one third (30%) of all people already receiving their pension.
According to the report, there are a number of reasons why companies do not employ workers beyond retirement age, including cost, skills mismatch and prejudices. Yet some companies may simply be unaware of the potential that older workers represent, not least because Switzerland has a fixed retirement age and companies expect their employees to retire automatically at that age.
Lastly, the mismatch between willingness to work beyond retirement age and reality may also be explained by the fact that incentives are lacking. If it is not financially advantageous to continue working beyond pension age, many employees will not do so, even if they would actually like to do so.
“It is key that not only employees, but also employers change their approach to the ageing workforce if we want to ensure an improved inclusion of older people in the labour market. Companies must create opportunities to dissuade employees from taking early retirement or to continue working beyond retirement age. And we’ve seen that that’s something that a lot of workers actually want, not only companies looking to make better use of the potential pool of labour represented by older workers,” says Adam Stanford, Managing Partner Consulting at Deloitte Switzerland.
He adds, “To fundamentally change the corporate culture and managers’ mindsets, it is imperative that we break down prejudices against older employees. Companies also have to establish a culture of dialogue between managers and older employees. Our study shows that almost 50% of those who are already retired would have been willing to work longer if their employer had discussed concrete opportunities with them way before they retire. This is ultimately a missed opportunity for both employers and employees.”
Specific measures that could help to keep those employees who are willing in the workforce beyond retirement: Boosting the opportunity and attractiveness of part-time work and institutionalising rainbow career models. 40% of those already retired state that they may have continued working if they could have reduced their hours. Adapting working conditions such as more freelance models, or shifting
Also, companies can make better use of the potential of older workers by ensuring that their workforce regularly undergoes training and adapts its skills to the future requirements of the world of work. Of course, maintaining employability also requires effort on the part of the employee – the concept of lifelong learning has to be embraced by both sides.
Deloitte survey (in English)