Older employees have plenty to offer Poland's booming economy

has gone abroad and the population is graying. The market needs creative solutions to face these challenges and experts suggest that older workers could be what employers are looking for. Offering experience, loyalty and flexibility, these workers would benefit the workforce, but first the significant obstacle of prejudice must be overcome

The government is currently working on a program to help make people over the age of 50 more active in the workforce, with the goal of increasing the number of working seniors by 10 percent over the next five years.

"We want at least 40 percent of people between 55 and 64 years of age to be professionally active by 2013," Secretary of State in the Chancellery of the Prime Minister, Michał Boni, told daily Polska. In contrast, the percentage of 55-64 year-olds engaged in the workforce reached 28.1 percent in 2006, according to Poland's Central Statistical Office (GUS).

The government's plan, called "Solidarność pokoleń 50+" ("Solidarity of generations 50+") consists of several stages. Reducing labor costs for the employment of older workers, increasing the flexibility of working hours and creating a system to provide professional training for senior citizens are all part of the plan. The program also calls for the abolishment of the early retirement system and the equalization of the pension age of men and women by 2025.

The cost of the program has been estimated at zł.8.5 billion, zł.6.5 billion of which would come from the Operational Programme - Human Capital (OP-HC), which is financed from the European Social Fund.

"We hope the plan will be implemented at the beginning of 2009," Agnieszka Chłoń-Domińczak, Undersecretary of State in the Ministry of Labor and Social Policy, told WBJ.

Pushing away potential

The rate of professionally active people over 50 in Poland is one of the lowest in the EU, reaching 41.5 percent among people 50-64 years of age in 2006, according to the Ministry of Labor and Social Policy. Only Malta had a lower figure.

A wide range of interrelated factors had led to this situation, labor market experts agreed. While the over-50 group is quite heterogeneous - including people in top managerial positions, the retired population and much in between - it also encompasses a large number of unemployed or those facing the threat of unemployment. That's according to the Rynek pracy a osoby bezrobotne 50+. Bariery i szanse (Labor market and the unemployed 50+. Barriers and opportunities) report which Ipsos Poland compiled on behalf of the Academy for the Development of Philanthropy in Poland (ARFwP) last autumn.

High unemployment in the 1990s and the beginning of this decade forced a large number of older people to exit the workforce in order to accommodate the younger generation, the Ipsos report stated. This trend was further increased by high labor costs, analysts claimed.

The new socio-economic reality and rapid technological progress played an important role in this process too. Many people who entered the labor market during the communist era could not cope with the new conditions, especially if they lacked computer or foreign-language skills.

To make things worse, the mentality which was fostered under communism made it even harder for people to acquire new skills, Mateusz Walewski, a labor-market expert at the Center for Social and Economic Research (CASE) said. "In the post-communist countries there was no habit of improving qualifications and learning after the completion of formal education," he noted, adding that productivity and efficiency among older people are significantly lower in Poland than in Western European countries.

According to the Ipsos report, as many as 67 percent of over-50s had a basic or vocational education and 73 percent of this age group were not considering a change of profession or acquisition of additional qualifications. More than half of the over-50s who were unemployed had been without work for at least five years, the report stated.

Early retirement also removes otherwise capable employees from the workforce, said Jacek Męcina, an advisor to the board at the Polish Confederation of Private Employers (PKPP) Lewiatan. Over a million people between the ages of 50-69 took early retirement in 2006, according to GUS data from July 2007. Meanwhile, the average age at which workers in Poland withdraw from the workforce is one of the lowest in Europe. In 2005 the average withdrawal age was 59.5, compared with EU averages of 61.0 in 2005 and 61.2 in 2006, according to Eurostat data.

Analysts interviewed by WBJ added that negative stereotypes make matters worse. Older workers are seen as less competent by employers, making it more difficult to find a job and causing seniors to feel inferior. As many as 30 percent of job agencies and labor offices interviewed in the course of Ipsos' research reported instances of discrimination against older workers. Around 63 percent of unemployed over-50s interviewed for the report declared that age was the main obstacle to finding work.

The call of the market

The arguments in favor of professionally activating older workers are numerous. They range from alleviating unnecessary pension costs borne by the state to improving the overall well-being of seniors, many of whom no longer feel useful to society. The EU's Lisbon Strategy also aims to increase the engagement of senior citizens in the economy.

Another strong argument for keeping over-50s at work is the growing demand for their services. Economic prosperity, dropping unemployment, emigration, a dropping fertility rate and a graying population - all of these factors have created a gap in the labor market which seniors have the potential to fill successfully.

"The influx of young employees is dwindling and compensating for this may be a problem soon," PKPP's Męcina told WBJ, adding that activating seniors may ensure the stability of the market, especially since their number will be growing. According to GUS data, over-60s will make up 26 percent of Polish society by 2020.

Addressing the problem

Despite its ambitious goals, the government's program is not enough to retain seniors in the workforce or lure them back, and Poland needs a wide range of coordinated initiatives, the Labor Ministry's Chłoń-Domińczak stressed. Labor market experts noted a huge potential for the development of NGOs that would specialize in issues facing older people, such as the US' AARP. "Such NGOs do exist but their voice isn't strong enough," said Joanna Tokarz, project coordinator at ARFwP.

Tokarz stressed the need for a well-designed system to provide professional training, especially for those people who are still employed. "It is much more efficient to train a worker while they are still at work than to do it when they have been unemployed for a long time," she said. CASE's Walewski confirmed that view, noting that it is easier to retain older workers than activate new ones.

Those who remain inactive but still haven't reached the retirement age should be given a chance to return too, experts stressed, pointing to wasted potential and an unnecessary burden on the state.

"While the process may be long and costly, it is urgent from the economic point of view," Tokarz concluded.

What's in it for me?

Coordinated initiatives are important, but employers also need to show more good will and flexibility in the employment of seniors, Chłoń-Domińczak noted.

Sympathy and pity are not arguments which appeal to entrepreneurs, ARFwP's Tokarz stressed. "The employer has to think in terms of the market, and they should be shown the benefits of employing over-50s in the first place," she said.

Last month the Academy for the Development of Philanthropy in Poland launched a project called "Zysk z dojrzałości" ("Profit from Maturity") in cooperation with Britain's Beth Johnson Foundation, to promote "age friendly" strategies and age-management solutions among employers. The project will last until 2010 and will include media campaigns, seminars for employers and a competition among entrepreneurs for the best age-friendly strategy.

PKPP Lewiatan's Męcina also saw huge potential in this age group. He stressed that the older generation abounded with people whose good practical skills and experience could be used in the construction industry, for example. Męcina noted that, due to their age, older workers are less prone to change their work place than the younger employees and are more loyal workers. "These people are very likely to identify themselves with the company," he added.

Progress, but a long way to go

Some companies have already seen the advantages of employing people over the age of 50. "They are experienced and show more flexibility, since many of them have already raised their children," Agnieszka Łukiewicz-Stachera, spokesperson for the Real hypermarket chain, told WBJ. Her company offers an extended package of medical service and specially tailored training to people over 50.

While seniors can still offer the labor market a lot, there are other groups whose skills and talents are heavily neglected, either due to unfriendly legal regulations or because of prejudice. "Apart from the over-50 group, initiatives to facilitate the employment are most urgently needed with regard to working mothers and the disabled," said PKPP Lewiatan's Męcina.