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News article

Trade unions emphasise that improving work places is vital for extending working careers

Working careers

(Helsinki 23.2.2010 – Juhani Artto) As in many other European countries, in Finland the government and employer organisations are pushing hard to raise the retirement age. The need to extend working careers is recognised also by the trade unions.

The reasons underlying the need for people to work longer are ultimately bound up with demographics. The age structure of Finnish people is among the oldest in the world. It means that the proportion of working age people is smaller than in most other countries. That creates a heavy economic burden not only on the pension system but on the whole national economy.

In the on-going debate the dividing line has been clear. Trade unions have emphasised soft means -carrot instead of stick- in extending working careers whereas government and employer representatives have worked for changes in the retirement regulations.

Preliminary results of the 2005 pension reform speak for the alternative, offered by the unions. The reform brings extra rewards for those who continue to work after reaching 63 years of age. The latest statistics indicate that these extra rewards have functioned as expected. In 2009, the average retirement age rose to 59.8 from 59.4 the year before. The powerful employer confederation EK is still not satisfied with this pace and wants the average retirement age to rise quicker than the present rate.

Success stories

In defending their alternative, the unions also point to experiences at work places where employers have seriously applied various soft means to attract older employees to continue in working life.

Abloy, a company producing locks and lock systems, is among the pioneers in these efforts. Its age programme covers all who are 55 or older. The programme maintains and boosts, in many ways, their health. From 59 years of age employees get extra days off. The number of these extra days off increases varies from 6 to 14 (at the age of 63). In ten years the average retirement age of Abloy’s personnel has risen from 59.5 years to over 62.

L&T, specialised in environmental management, has followed a similar path. The average retirement age has risen by three years thanks to a work ability maintenance programme. In L&T, money used for employees’ health care came to be seen as an investment, not as an expense. Since 2006, early retirement figures have been cut in half while saving the company millions of euros.

Good results from applying “best practises” can be found also in the public sector. Recently, Motiivi, the magazine of the public and welfare sector union JHL, reported on the age programme and its excellent results at the construction services unit of the City of Helsinki. In eight years the average retirement age has risen by four years and sick leave taken by employees over 56 years of age has been cut to a third. Notably, there was close cooperation between employer and employees in creating this programme.

In the municipalities, it is especially important to entice older employees to continue their working careers, as by 2020 a third of the almost half a million municipal employees will reach the retirement age.