Improving how the older labor market is managed: a new era of social partnership

Earlier this year, European organizations representing employers and labor unions signed a framework agreement to promote social dialogue at the national, industrial, and organizational levels on measures to address workplace ageism and make it easier for older workers to stay in the labor market until they reach pension age. At the same time, the agreement called for employers and unions to work together to address youth unemployment, which in some countries is as high as more than half of those under 25. These “social partners” recognized the impact that demographic change was having both on employers and workers, and the agreement represented a commitment to work together to tailor European labor markets to aging societies.

What common interests would lead employers and unions to look for ways to support older workers who want to keep working?   First, both sides want older workers to be in jobs that they value and that won’t lead to early retirement because of poor health. Getting older workers into sustainable work is a challenge; many people in their sixties are stuck in work that they could do easily in their forties but that is now too physically demanding or stressful. Making late-career job transitions easier is a goal that both employers and unions want. Second, promoting intergenerational knowledge sharing can benefit younger and older workers, because the former gain skills that enhance their employability and the latter can share their knowledge and experience while reflecting on the contributions they have made throughout their careers. Knowledge sharing also benefits the employer, because it keeps in-house and tacit knowledge within the business even after the older worker retires. Third, and finally, both employers and workers can benefit from late-career work flexibility. As employees wind down toward retirement, they may want to reduce their workloads and pass on some work to younger colleagues. Phased retirement programs in British companies such as BAE Systems and British Telecom have been successful, because they help everyone manage career transitions better, including the eventual transition into retirement.

What Europe’s experience suggests for the United States

Employers and unions see improving how multigenerational workplaces are managed as a win-win, so it makes sense why they agreed to try to solve that together. An American audience might think that the framework agreement is a product of post-World War II industrial relations and wouldn’t work well in economies like that of the United States, where the relationship between employers and unions could be better described as one of conflict rather than collaboration. It is true that where social partnership is strongest, like Germany or Sweden, collective agreements have been reached on managing age within workplaces across such industrial sectors as manufacturing, chemicals, and steel. However, even in European countries where social partnership is less robust, there are interesting examples of employers and unions working together. In the United Kingdom, for example, National Health Service employers and staff have been working jointly to ensure that health service professionals can sustain work as pension ages rise. In Italy, bilateral demographic funds (managed jointly by managers and union reps) are being set up to fund programs to promote health-sustaining work and tackle workplace ageism. Most significantly, social partners in these two countries as well as Spain and Poland are working together regionally to find solutions for problems that have stumped traditional industrial relation structures, such as joblessness of elders who’d rather keep working and improving intergenerational learning.

Improving how aging in the workplace is addressed is a great way for labor and management to work together to find innovative solutions. Not only are there many shared goals, but neither side has all of the solutions. The common objective—ensuing that both younger and older workers have access to good work in which they can be productive—can best be achieved if everyone is at the table.

Matt Flynn is a professor at University of Hull and is leading a European Commission project, “Active Ageing through Social Partnership and Industrial Relations Expertise,” with colleagues from the University of Granada (Spain), the University of Lodz (Poland), ADAPT (Italy), and Newcastle University (UK).

This blog post is reposted from the Sloan Center for Aging and Work.