Welcome to the UK Secretary of State for Work and Pensions Mel Stride,
The AARP Executive Vice-President [Debra] Whitman,
Distinguished guests,
Colleagues, Friends all,
A very warm welcome to you all to this launch of the OECD report “Promoting Better Career Choices for Longer Working Lives: Stepping up not Stepping out”.
As we live longer healthier, this report provides insights into how businesses and policy makers can help promote and facilitate longer working lives.
How businesses and policy makers can help support positive and inclusive career transitions that can give more experienced workers to continue to develop their skills and their contribution.
Achieving longer working lives will be important for our economies given the impact of population ageing on employment participation rates.
The combination of declining fertility rates and rising life expectancies is shifting the composition of the workforce towards older workers:
- Back in the year 2000, across the OECD there were 23 adults aged 65 and over for every 100 people of working age.
- Today that number has grown to 34, and by 2050 it is expected to reach 53 – that is more than half the working-age population is expected to be 65 years or older.
Population ageing compounds the skills shortages that we are already seeing with tight labour markets, with the OECD unemployment rate at a low of 4.8%.
And it will create significant fiscal pressures:
- Public pension expenditure is projected to rise by 1.5% of GDP cumulatively by 2060 in the median OECD country.
- Public health and long-term care expenditure is projected to increase by 2.1% of GDP in the median OECD country.
Supporting better evolving career choices and improved career mobility across people’s working lives will help address these pressures and promote productivity and growth.
The diverse work experiences that well supported career mobility enables, will also help workers to participate in and benefit from the opportunities that the green and digital transformations are bringing with them, including the accelerating impact of AI.
Evidence in this report shows that greater career mobility is associated with longer working lives, higher wages, and better working conditions.
Workers who changed jobs mid-career are significantly more likely to be employed at age 60 than workers who did not change jobs.
And older workers who change jobs voluntarily tend to benefit from wage increases: during 2010 to 2020, workers aged 55-64 who voluntarily changed jobs experienced average annual wage growth of 3.5%, compared with a wage decline of 4.8% for those who did not change their job.
Work flexibility and mental health of older workers also often improve following a job change.
The challenge is that career mobility declines over the working life.
Only 6% of workers aged 55-64 change their job in a given year on average in OECD countries, compared with 11% of workers aged 25-44.
Career mobility is especially difficult for low-skilled workers whose next job often is another low-skilled job.
Businesses and policy makers need to provide workers with better opportunities for career mobility – to improve their employability, pay and working conditions.
To highlight five measures that businesses and policy makers can use to support career mobility.
First, firms could make more use of initiatives such as job rotation schemes, mid-career reviews or flexible working arrangements.
This would give mid-career and older workers better access to jobs that match their skills, aspirations and needs.
By contrast, pay policies that reward length of service, such as seniority-based wages, reduce workers’ incentives for career mobility.
Second, to tackle discrimination against older workers in the workplace, companies can, for example, use age-blind hiring or age-friendly job advertisements.
Such measures help to overcome stereotypes that hinder the recruitment and professional development of older workers.
Third, governments could do more to offer career advice and guidance services.
For example, in the Netherlands, employers can apply to the Sustainable Employability and Early Retirement programme to fund career counselling and coaching of older workers.
The programme can also be used to help to predict workers’ age-related career risks.
Fourth, governments could offer targeted employment and social support to older individuals who have lost their job.
A good example are the Job Security Councils in Sweden which offer specific re-employment assistance for displaced workers.
And fifth, governments could consider adapting structural policies, including employment regulation and occupational licensing, to better promote career mobility.
Italy, Lithuania and Portugal, for example, recently reduced severance pay to incentivise job transitions.
Before closing,
Thank you to AARP for working with us to support and engage firms, governments and social partners for promoting better opportunities for career mobility – to help older workers step up in their careers, rather than out of the labour force.
And thank you to all of you for your participation and contributions – we very much appreciate you sharing your expertise at today’s event.
I wish you positive and inspiring conversations.
