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Age Management as a Factor for Competitiveness and Profitability

Age Management as a Factor for Competitiveness and Profitability. The Case of PWD Technical Services of the City of Helsinki Marjukka Piiparinen Ministry of Employment and the Economy Finland. Introduction. ”Time bomb ticking” – baby-boom generation about to retire

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Age Management as a Factor for Competitiveness and Profitability

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  1. Age Management as a Factor for Competitiveness and Profitability The Case of PWD Technical Services of the City of Helsinki Marjukka PiiparinenMinistry of Employment and the Economy Finland

  2. Introduction • ”Time bomb ticking” – baby-boom generation about to retire • About one million people will leave the workforce by 2015 • Loss of both labour force and tacit knowledge • The National Programme for Ageing Workers – 1998 - 2002 • Pension reform 2005: incentives for workers to stay longer in working life • Labour shortage puts employers to a new situation – focus on work ability and job satisfaction of ageing workers

  3. The Finnish Workplace development Programme TYKES • Supports development projects which aim at improving the productivity and the quality of working life • Programme-based workplace development • An ”umbrella” for several development programmes • Part of the employment policy programme of the Government of Prime Minister Vanhanen • Set up by the Ministry of Labour for 2004-2009 • Implements about 1,000 development projects • 250,000 employees participate • Based on close cooperation between workplaces, research and development units and policy makers

  4. The Case of PWD Technical Services of the City of Helsinki

  5. PWD Technical Services • A unit of Public Works Department of the City of Helsinki • Provides construction, equipment rental and transport services • In competition with the private sector • Customers: City of Helsinki agencies and depts., neighbouring municipalities, central gvt. organizations, private companies • Permanent staff 420, fixed-term workers around 80 • 60 % of the total staff is over 45 • 25 % over 56 • Work physically demanding • Few employees continue until the statutory retirement age • High employment security – no redundancies on economic or production related reasons

  6. Background • Recession in the early 1990’s: belt-tightening, recruiting ban -> distorted personnel structure: average age of the staff about 48-> more than 10 % on part-time pensions-> high rate of sickness-related absenteeism • Economic recovery following recession: ageing workforce and increasing competition caused a struggle for survival - maintaining competitiveness and profitability had to be secured • The need for a programme covering the ageing workers was recognized at all levels in the unit • The operating culture in the unit (cooperation, employee well-being, occupational health issues) provided a sound basis for the project • Trust between the unit’s management and staff essential for achieving results

  7. The Age Programme • Programme started in 2002 - included in the Finnish Ministry of Labour’s Workplace Development Programme (TYKES) - consultant aid - planning stage 2002-2003 - practical implementation 2004-2006 • Part of the unit’s personnel programme • Based on voluntariness • Two parts: - personnel-policy principles - personnel-policy measures • Employee-specific scheme • Monitoring group provided expert information

  8. The objectives of the programme • To make it possible for individuals to work to the statutory retirement age. • To ensure that employees perform well and remain in good health for the whole duration of their careers. • To maintain and update the skills of workers and provide them with more extensive or entirely new skills. • To collect the empirical knowledge possessed by ageing workers and transferring it to new recruits. • To replace the part-time pension with more flexible arrangements. • To keep the organization profitable and competitive.

  9. Key Processes and Tools • Keeping skills up-to-date and transferring them to younger workers: • Supervisor/subordinate discussions -> Skills updating programme/personal work life cycle development plan (HEKS) for employees of 45 and over • Programme for transferring know-how and tacit knowledge of retiring staff members to young generation • Vocational training of ageing workers • Securing the work ability and performance of the employees: • eHR (”electronic Human Resource”) system for monitoring the workload and work ability of individual workers -> The Work Load Reducing Process for workers over 56

  10. eHR Information System – ’electronic Human Resource’ • Management support tool • Interactive • Improves cooperation with occupational health services • Self-service basis • Access to the system: permanent employees, management and occupational health care • Contains information on employees professional capacity and skills development, physical and psychological fitness etc. • Confidential – includes also information on personal life • Tool for monitoring and reducing the workload of ageing workers

  11. The Work Load Assessment Process Worker Worker’s own estimation of work load • Worker’s • fitness test • physical • examination(= fitness • check) Supervisor/ Subordinate discussion Estimation of worker’s work load Supervisor/ Subordinate discussions -> methods for reducing work load Supervisor Occupational Health Care Centre (nurse) Estimation of worker’s work load PWD Tech. Services Manager Decision onAge-related leave on basis of the estimation

  12. Health guarantee: annual fitness checks for workers over 56, personal fitness guidance, health-checks with feedback • Age-specific leave system as a replacement for part-time pensionsfor those over 56 • Workers 45 and over entitled to a one-week fitness break • Flexible arrangements in working hours • Personnel management training for supervisors • ”Future groups” of experienced workers and work life development experts

  13. Results • Substantial improvements in the PWD Technical Services’ business • Unit’s competitiveness and profitability increased • Improved image of the PWD T.S. as an employer • Sickness-related absenteeism halved in 2006 comapred to 2005 • Average retirement age gone up from 59 to 62 • Substantial decrease in part-time retirement • Higher employee well-being and job satisfaction • Improvement in unit’s occupational health service operations (eHR-driven)

  14. Continuing application of the best programme practises 2007 - 2009: • Annual HEKS updating • Occupational health checks • Age-specific leaves • Flexible working hours • Fitness breaks The City of Helsinki intends to apply some of the programme methods for the training of its 38,000 employees.The eHR system will soon be taken into use in Helsinki City personnel administration.

  15. Conclusions • Participatory and interactive methods important • Commitment from all involved • Common vision on the objectives • Information and communication central • Long term development plans – investments only bear fruit in the long run • Best suited to the municipal sector The Finnish companies are encouraged to learn from the lessons accumulated by the PWD T.S. in the management of an ageing workforce.

  16. Age Programme Processes CONSTRUCTION PROCESS2002 IMPLEMENTATION PROCESS 2004-2006 PWD Technical Services - age policy PREPARATION A personal work life cycle development plan 1-5 years (HEKS) • Supervisor / • subordinate • discussions • - Supervisor tools Professional capac- ity and willingness Physical and psycho- logical fitness for work • HEALTH GUARANTEE • "traffic lights" • health check-up • fitness checks • fitness breaks • age-related leave • etc. • ACHIEVING RESULTS • development of know-how • transfer of know- how • "silent knowledge" • job rotation Age policy implementation measures Age policy implementation measures TESTING THE MEASURES2003 Implementation resources/budget Personnel administration eHR information system Follow up, evaluation and improvement measures C O M M U N I C A T I O N

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