German Companies All Set For Demographic Chance By Applying Specific Personnel Measures

The percentage of older staff members in the total number of employees in German companies has been continually increasing for the last few years. To avoid losses in productivity, many firms already rely on personnel measures, specifically designed for older employees. There is a good reason for this. Older staff members are considerably more productive when working in teams with younger colleagues and when having an age-appropriate equipment of their work place and tasks appropriate for their strengths. These are the main findings of a study conducted by the Centre for European Economic Research (ZEW).

For the first time in Germany, the representative study analyses if personnel measures specifically designed for employees over 50 year of age improve their productivity in comparison to younger employees. The study also tackles the question if losses in productivity due to the demographic change could be prevented in the long run. Moreover, the study analyses the impact of older staff members on the overall productivity in companies applying specific personnel measures for older employees in comparison with companies without such personnel measures.

The study indicates that older employees are on average not less productive than their younger colleagues. However, there are great differences between companies. In many firms, the productivity decreases when the percentage of older staff members increases. As the average age of employees in Germany has increased by three years in the last 20 years, it is essential that firms prevent (further) losses in productivity due to the aging of their staff.

The calculations by ZEW suggest that older staff members working at work places specifically equipped for their age, i.e. better lighting or high-contrast screens, are significantly more productive than older staff members in firms which do not offer such working environments. In particular, older employees are considerably more productive when having tasks appropriate for their age, for instance, less physically straining work and instead tasks which require great professional experience. Moreover, the study indicates that productivity of older employees increases when working in teams with younger colleagues. In these firms, the younger employees are also significantly more productive. Apparently, younger staff members also directly benefit from long-term professional experience of older colleagues.

While the personnel measures mentioned above lead to considerably positive effects on productivity, there are other measures which do not influence the productivity of older staff. In particular, further training courses for older staff members as well as the partial retirement scheme. Reasons for this might be that employees continue to do the same tasks as before the further training, i.e. their tasks are not extended or changed after further training. An earlier study confirmed that further training frequently leads to an increase in productivity for younger staff members if their tasks change afterwards. In Germany, the partial retirement scheme usually means that employees retire earlier, but do not reduce their working hours before retirement. Therefore, the stress for older employees does not decrease and new energy is not released in this early retirement plan. Due to the missing implementation, both staff measures seem to have no effects for maintaining or increasing the productivity of older employees.

"Against the background of these results, firms in Germany are to reconsider their use of further training courses and the partial retirement scheme," says Thomas Zwick, Research Associate at ZEW and Professor for Human Resource Management at Ludwig-Maximilians-Universität in Munich, who is responsible for the study. "Older staff members participating in further training courses should have the opportunity to put their newly obtained knowledge into practice, e.g. by working at new projects or having new tasks," Zwick explains. "Moreover, the firms should continuously reduce the working hours of older employees within the partial retirement scheme. By this, older staff members would be able to gradually adapt to the retirement life and it would also be possible to pass on their knowledge to younger colleagues before retirement."

The ZEW study is based on data from the Institute for Employment Research (IAB) from the years 1997 to 2005. The data is representative for the German economy and contains almost seven million employees and around 8,500 firms. Information on employees includes, for example, gender, education, salary or professional experience. Information on firms includes data on the economic sector, size or net product.

For further information please contact

Prof. Dr. Thomas Zwick, E-mail: zwick@bwl.lmu.de