Compared to other developed nations, Iceland has an extremely high rate of older people in the workforce.
Some 84% of the 55–64 age range are employed in Iceland, according to the latest PwC Golden Age Index. The Index assesses the impact of hiring older workers on different aspects of a country’s labor market, including employment, earnings, the gender gap and participation in training.
For comparison, the OECD average is just 60%.
If you’re wondering whether the Icelandic pension structure is providing incentives to stay in the workforce, well, it isn’t. Most Icelanders can draw their full salary-funded private pension from age 60 and their state pension from age 67 — yet almost 20% are choosing to stay in the workforce past the age of 70. So, what is motivating older Icelanders to stay in work and employers to value and retain them?
While it’s challenging to compare one culture to another, here are some things that set Iceland apart. The question is, how much of this could be replicated in other countries?
#1: Create a culture of life-long learning and development
Iceland has a strong focus on life-long, in-service training. Almost 22% of the working-age population took part in lifelong learning in 2019, and a large majority did so while employed. These are among the highest participation rates in Europe.
While not specifically aimed at the over 50s, the country has several publicly funded training centers which provide a diverse offering of courses and seminars for life-long learners. The aim is to keep people engaged in work and developing, regardless of age.
The takeaway: Older employees do not necessarily want to be set aside and coast until retirement. They need stimulating opportunities at every stage in their careers to keep them engaged and motivated in the workplace, and they want support to access the relevant skills needed for their re-employment with different employers so they can remain relevant and valuable to the ever-changing labor market. Employers that offer upskilling opportunities and tuition reimbursement can help meet this need and reap the benefits in terms of employee satisfaction, loyalty and productivity.
#2: Focus on work-life balance
Flexibility has been a buzzword for decades now but Iceland’s government and employers have gone to great lengths to put it into action for workers. Between 2015 and 2019, the country conducted the world’s largest four-day working week trial, which saw 1% of the workforce reducing their hours from 40 to 35 a week, with no reduction in pay.
Hailed a triumph by both unions and employer groups, the trial was shown to improve the wellbeing of workers with no drop in productivity. In fact, analysis suggests that productivity may actually have increased despite the reduction in hours.
Many employers were so pleased with the experience that they took action before the official trial results. Today, 86% of Iceland’s working population have permanently trimmed their hours or have been granted the option to do so.
The takeaway: Work Flexibility is one of the focus areas in the Inclusive Leadership Compass (a data driven assessment to develop inclusive behaviors). One of the biggest reasons why workers (older and younger) drop out of the workforce is that some need more flexibility at different times in their careers. This could be due to health reasons or care-taker responsibilities. Or wanting to off-ramp gradually instead of jumping into retirement with both feet.
If every worker above, say, 55 is invited to discuss how their working conditions can be individually adapted to them, imagine the impact it could have. The pandemic allowed almost everyone to work — flexibly and remotely — employers learned the value of considering any reasonable adjustments to retain their employees or risk losing out on the years of experience, strengths and skills.
Read the full article on Medium.