Recharging or Retiring Older Workers? Uncovering the Age-Based Strategies of European Employers

Abstract

Purpose of the study: We offer an empirically based taxonomy of the human resource policies of European employers in relation to older workers. In particular, 3 age-based strategies are discussed and analyzed in a simultaneous fashion: a focus on exit through retirement, workplace accommodation measures, and employee development measures.

Design and methods: A sample of 3,638 organizations in 6 European countries (Denmark, Germany, Italy, The Netherlands, Poland, and Sweden) is analyzed to discover which of the 7 antecedents investigated herein are associated with the implementation of these human resource strategies. The key predictors are the proportion of older workers (aged 50 or older), organization size, seniority-based compensation, labor union involvement, training requirement, recruitment problems, and knowledge intensity. Structural equation modeling is used to assess whether these predictors are associated with the 3 latent factors.

Results: The 7 key predictors of the 3 strategies show that these strategies are used simultaneously, but that the employers clearly use exit policies more intensively than they use development measures. Organizations thus use a dual approach to managing the employment of older workers. They may sort older workers either upwards (e.g., by encouraging career development and training) or outwards (by promoting early retirement). The same division can be detected when examining the effects of labor union involvement and seniority-based wages. When recruitment problems are encountered, more effort is directed toward accommodation and investment.

Implications: Despite the warnings of policymakers about the possible consequences of an aging population, European employers are not yet formulating strategies that promote active aging, often still opting for the easy way out, via exit strategies.

Keywords: Early retirement; Employers; Human resource policy; Older workers.