Government and employers need to offer incentives and better employment opportunities to older workers, writes John Forde.
The core definition of economic and cultural success in the 21st century will undoubtedly be enhanced human capital. Key to achieving this will be our ability to create an educated and diverse workforce.
Ireland is undergoing a significant demographic change.
According to the 2003 National Economic and Social Forum report, Labour Market Issues for Older Workers, in 2003 Ireland had five people of working age for every person over 65. By 2025 this ratio will have dropped to three to one.
Older people offer enormous potential value to employers and the economy.
Before Ireland's recent era of unprecedented growth, older workers were especially vulnerable during company restructurings. Now, as we enjoy a period of almost full employment, policy makers and employers must implement strategies that incentivise those over 50 to remain in the workplace.
Today, Chambers Ireland will publish its Labour Force Survey 2006, which this year focuses on older workers. Published in association with Senior Select Retain and funded by the European Social Fund, the survey studies the contribution of older workers to Ireland's competitiveness, barriers to their continued participation in the labour market, and employers' perspectives on older workers' performance in comparison with their younger counterparts.
Older workers often represent an untapped resource. The OECD has identified the age of 50 as the beginning of a decline in participation rates among older workers.
Factors such as particular workplace practices and public policies often act as barriers to the continued participation of older workers in the labour market.
Yet, in our competitive labour market, businesses need to examine ways to retain their older members of staff, while seeking to encourage others to return to the workforce.
This would have a significant impact on the country's competitiveness. Earlier this year, in its analysis of ageing and employment policies in Ireland, the OECD noted that "unless participation rates increase over the coming years, Ireland is likely to experience a sharp downturn in economic growth rates compared to recent years".
Through the introduction of appropriate measures, boosted by increased skills attainment, a real commitment to life-long learning and further enhancement of female workforce participation, older worker participation can continue to play a growing role.
Research conducted by the National Council on Ageing and Older People in 2001 suggests that the introduction of flexible working arrangements could help to retain older workers in the labour force.
Companies need to consider policies such as allowing people to work beyond the age of 65 should they wish to do so, and the facilitation of flexible working hours.
Another advantage of increasing participation rates among older workers will be the downward pressure on public expenditures that are associated with ageing such as health and welfare costs.
The need to rethink the standard age for retirement is evident when one considers the change in life expectancies over the last century. When the State retirement age was established as 65 in 1925, the average remaining life expectancy for men was 11.6 years and 12.1 years for women.
According to the CSO, men who turned 65 in 2002 were expected to live for another 15.4 years while women were expected to live for another 18.7 years.
Much of Ireland's recent economic success has been accounted for by a significant increase in the labour force throughout the 1990s.
However, as Paul Tansey has written, "continued immigration and increased older worker participation rates will not be sufficient to maintain our current rate of growth. Instead, Ireland must focus on enhancing productivity through investment in human capital and upskilling our workforce".
In the context of our increasingly tight labour market, our progressively ageing population and the new-found popularity of taking early retirement, government and employers need to take active measures to offer incentives and better employment opportunities to older workers, provide training and skills enhancement and make working conditions more amenable to older workers.
In addition, all workers will need to embrace the idea of working longer and acquiring new skills continually.
In doing so, they will increase their employment options and also maintain greater control over their career and life options as they age. Employers will gain by having a flexible and highly productive workforce close to hand.
John Forde is chairman of Chambers Ireland's human resources policy council, which publishes its 2006 labour force survey today