le 25 février 2020
Employing seniors – a blind spot in pension reforms

Tribune originally published in French in Le Cercle Les Echos on Feburary, 12, 2020

The issue of longer working lives is a highly controversial one. However, the maths is simple and behind their principled postures, social partners know that it is no longer possible to turn back. We’re living longer, so we need to work for longer. But we still need to be able to do so.

The debate has crystallised around the issue of the “pivot age,” which in fact is obscuring the challenge and what will make the reforms a success: employing seniors. As a priority, the efforts of reformers should focus on improving the employment rate among older people rather than on the sole gesture of raising the age of retirement. Balancing the pension systems depends on it. To keep it afloat, naturally, we need fewer recipients – this is what is intended by raising the age of retirement – but above all need more contributors, and therefore more working seniors. At the risk of stating the obvious, staying in work is the most effective weapon we have to tackle the deficit.

It is essential that we don’t repeat the mistakes of 2010. By raising the age of retirement to 62, we have essentially increased the number of people out of work (unemployment, sickness, disability etc.). We have no choice but to realise that our country doesn’t know how to integrate seniors into the labour market. Between the ages of 60 and 64, only 31% of [1] our citizens have a job, a French cultural exception, a fact that we cannot take pride in.

To ensure that pension insurance doesn’t result in an imbalance of unemployment insurance, we have to change our perceptions of seniors and make room for them in the economy. The Bellon report, dedicated to keeping seniors in employment, has understood this well and outlines the first steps to resolving this anomaly. The main barrier to employing seniors is cultural. In the professional environment, age carries its share of delusions and erroneous representations.

Three out of four managers are reluctant to consider employing candidates older than 55 when recruiting[2]. Less productive, overwhelmed by digital tools and, above all, too expensive, baby boomers are weighed down by stereotypes. Less productive? There are no statistical facts to support this. Overwhelmed by digital tools? With the correct training, nothing effectively distinguishes them from millennials, the golden generation from the digital era.

Three possibilities can be explored to reconcile seniority and employment. First, wage moderation. France is one of the only countries where salaries continue to grow linearly after 50 years of age. This “logic of honour” has to stop. This is just the antechamber to precariousness and unemployment.

Next, upskilling. Training is the key to combatting exclusion from the labour market. However, beyond 50 years of age, the number of people undergoing training drops significantly. Job seekers over 55 are nearly three times less likely to access training. On paper, the CPF (Compte Personnel de Formation, personal training account for private employees, the unemployed and jobseekers) seems to be the most effective tool for correcting this reality. It can easily be adapted to play a full part in supporting older people.

Finally, adjusting employer costs. Why not consider using this tool to discriminate positively in favour of an age category. Its impact on recruitment has been widely demonstrated. The perception of seniors would be profoundly affected. The experience would outweigh the cost and those over 55 would thereby present an opportunity for businesses. The cost to the public purse would, without doubt, be significantly offset by extending working lives.

This is particularly true given that the end of the working life of employees closest to retirement can be a transition period and an excellent opportunity for cross-fertilisation between the expertise of “digital natives” and the expertise of “baby boomers”, enriching the complementary skills of each generation.

Although raising the age of retirement seems vital when it comes to the reality of our country’s demographics, reform will only be effective if mechanisms are put in place to keep people in employment. Without these two combined approaches, our social contract will deliver neither on the promise of a balanced pension system, nor on that of employment for all French people.

François Béharel

President, Groupe Randstad France

[1] Eurostat 2018

[2] France Stratégie – Les séniors, l’emploi et la retraite [Seniors, employment and retirement] – October 2018