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Gudrun Biffl Age management – a coping strategy for employers: The case of the automotive industry Impact of Ageing: A common challenge for Europe and.

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Presentation on theme: "Gudrun Biffl Age management – a coping strategy for employers: The case of the automotive industry Impact of Ageing: A common challenge for Europe and."— Presentation transcript:

1 Gudrun Biffl Age management – a coping strategy for employers: The case of the automotive industry Impact of Ageing: A common challenge for Europe and Asia, Panel: Ageing – a challenge for economic and social organisation Conference at the Universities of Vienna June

2 Globalisation and Ageing: The case of the automotive industry Globalisation: cars are among the most highly globalised consumer goods and so is their production Multinationalisation of production is to lower production costs and to access markets/consumers and in so doing it exerts pressure on production costs Ageing: tends to raise production costs as the productivity of manufacturing workers tends to decline beyond a certain age

3 The automotive industry Europe is the largest automotive production region of the world: 34% of world production In EU15 direct employment effect: 2 million employees, i.e., 1% of total employment – similar weight in Austria Productivity in Europe is lower than in USA and Japan – labour costs are a particular concern: 1 hour of labour costs : US$ 12.9 in South Korea US$ 29 in Japan US$ 33.8 in USA and US$ 32.7 in EU15 (Germany tops the list with US$ 36.8)

4 Why the preservation of car manufacturing plants in Europe is important Enterprises respond to increased competition by raising efficiency in production, improving technology. Consequence in 1990s: intensified restructuring through acquisitions/mergers to raise scale of production and to access intangible assets (Knowledge/skills of human resources - management, system engineers, etc. ) Our case study plant was taken-over by a leading global supplier of technologically advanced automotive systems in National interests may not correspond with enterprise goals: Key role in advancing technology (R&D) – importance for longterm economic development Restructuring/relocation has adverse effects on workers and communities

5 The characteristics of the work force in the plant: ,200 employees, of whom 70% blue collar workers – the great majority are highly skilled metal workers and other tradesmen White collar workers largely engineers and computer specialists 88% of the workforce are men - 90% of the blue collar workers Average age below the Austrian average and the average of the industry

6 Why age management: a new human resource strategy Austria has one of the lowest employment rates of mature workers in the OECD – a result of generous pension system and an early exit culture (disability benefits) Reform of the retirement system in the 1990s and 2003 due to unsustainablity of public budget expenditures due to ageing (retirement pay, expenditure on health & care) Turns the burden of change/adaptation away from public budgets towards the individual and employers

7 Stepwise approach to the implementation of age management 1. Survey among the employees – their work ability and the challenges/characteristics of the various tasks/jobs 2. Examination of health and safety: accident rate is below the metal industry average (5.2 accidents per 100 employees vs 6.2); it rises with age 3. Morbidity rate corresponds to Austrian average: 4% of working hours lost due to sickness, but large differnce between blue collar workers and white collar workers (4.7% vs 2.3%) – morbidity rates rise with age (slightly u-shaped) 4.examination of the role of wages

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11 Steep age-earnings profile in Austria in international comparison Pronounced age-earnings profiles are incentive for firms to early retirement Age earnings profiles in Austria continue to rise with age for men and women alike, thus effectively forcing the less productive out of employment.

12 Age-earnings profiles in selected OECD countries, 2000 MenWomen

13 Education and training raises the adaptive capacity of the workforce 30% of 15-22year olds are apprentices Enterprise has a tradition of providing/financing further education and training Neither management nor mature workers see much sense in further education and training for older workers as the company has invested until they have reached their personal peak, given the jobs available

14 Increasing numerical flexibility through temporary work Large internal mobility of labour In addition increasing numeriacl flexibility through cooperating with a cluster of labour leasing companies Core workers are increasingly substituted for temporary workers (agency workers)

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16 Public policy to promote employment and income security Public policy has to be cognizant of the economic environment of manufacturing Support employers to retain and to hire older workers Policy mix needed which promotes flexible work arrangements while at the same time drawing a safety net for the workers

17 Age earnings profiles in international comparison: Men Q: Österreich: Mikrozensus und Lohnsteuerstatistik 2001, Frankreich: DADS, Deutschland: Sozio-ökonomisches Panel, Niederlande: Statistics Netherlands, Schweden: Statistics Sweden, Vereinigtes Königreich: Labour Force Survey. Geringe Lohnsteigerung der Männer in Ö in jungen und mittleren Jahren und hohe in reiferem Alter – wegen starkem Beschäftigungsabbau von Personen mit einfacher und mittlerer Qualifikation.

18 Age earnings profiles in international comparison: women Q: Österreich: Mikrozensus und Lohnsteuerstatistik 2001, Frankreich: DADS, Deutschland: Sozio-ökonomisches Panel, Niederlande: Statistics Netherlands, Schweden: Statistics Sweden, Vereinigtes Königreich: Labour Force Survey. Geringe Lohnsteigerung der Frauen in Ö zwischen 30 und 40, in reiferem Alter Verbleib von besser verdienenden Frauen in der Beschäftigung.

19 Average effective age of retirement versus the official age, OECD, Men a) The average effective age of retirement is derived from the observed decline in participation rates over a 5-year period for successive cohorts of workers (by 5-year age groups) aged 40 and over. S.: OECD estimates derived from the European and national labour force surveys. OECD Average

20 Average effective age of retirement versus the official age, OECD, Women a) The average effective age of retirement is derived from the observed decline in participation rates over a 5-year period for successive cohorts of workers (by 5-year age groups) aged 40 and over. S.: OECD estimates derived from the European and national labour force surveys. OECD Average


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