Academic journal article Nordic Journal of Working Life Studies

Does Age Matter in HR Decision Making? Four Types of Age Policies in Finnish Work Organizations

Academic journal article Nordic Journal of Working Life Studies

Does Age Matter in HR Decision Making? Four Types of Age Policies in Finnish Work Organizations

Article excerpt


one of the central aims of the EU's and Finland's national employment and pension policies is to prolong work careers, to postpone the average age of retirement, and to raise the employment rate of older workers. The demographic development in EU countries and the ageing of the workforce are factors that have brought these questions onto the political agenda. The ageing of the population is creating new economic and socio-political problems that need solutions. There are fears of labor shortages, nomic and the unsustainable growth of pension expenditures, and raising the effective retirement age is seen as a solution to these issues. If people worked longer, it it would both improve the dependency ratio and decrease pension expenditures (Andersen et al. 2007; Myles 2002).

The important factor behind the interest shown in older workers is the phenomenon of early exit from the labor market - that is, leaving work before the statutory retirement age - which has been a common labor market phenomenon since the 1970s in most EU countries (Kohli and Rein 1991). However, since the beginning of this century, there has been a positive turn in the employment rates of people aged between 55 and 64 in the EU25 countries, although the differences between EU countries are still significant (Pärnänen 2011).

In Finland, long-term developments have been similar to other EU countries: at its lowest, in 1994, the employment rate of the age group in question was as low as 34%, although Finland has, however, managed to achieve significant positive development in this field. Besides its strong economic upswing followed by increased labor demand, this success story is also a result of the various tools developed to tackle the problem, such as introducing economic incentives for employers to discourage their using early exit routes and organizing campaigns against age discrimination (Ilmakunnas and Rantala 2005; The Many Faces... 2002). The most important tool is, however, the pension reform of 2005, which includes a new flexible retirement age and heavy economic incentives for older workers to remain in employment. The changes made in employment and pension policies are so profound that it can be said that there has occurred a clear turn to new age policies. Earlier, during the time of old age policies, the labor supply was regulated through pension policies, using mechanisms such as early pensions, which, especially the unemployment pension, functioned as tools used to alleviate the effects of structural change and the problem of unemployment (Ilmakunnas and Rantala 2005).

Despite the improved employment situation of older workers, however, the question of early exit from the labor market is still very relevant today. The aim to postpone the average age of withdrawal from the labor market is still on the political agenda both at the national level in Finland (Government Programme 2011) and at the EU level (Europe 2020 targets).

research question

Policies can be changed, but can also the behavior of employers and employees be changed? New age policies have targeted two groups: first, employers, who are expected to implement personnel programs that would support their employees staying at work until retirement age and also promote the selection of older unemployed candidates when hiring new staff; and, second, the older age cohorts themselves, who are encouraged to avoid using early exit routes, meanwhile being supported in caring for their work competence and health.

However, choices about the length of working life are not made independently by either group; rather, it is the work organization itself that creates the micro-context wherein the decisions of both parties are made. In this article, I will examine how this objective of extended work life is received at the workplace level. What motivates employers to endorse long working careers and hire experienced rather than youthful staff, for example? …

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