Ageing Employees in Central and Eastern Europe – facts and challenges

1. Ageing Employees in Central and Eastern Europe – facts andchallenges International Conference Good practice on workforce ageing across Europe Madrid, 13 of November 2007 Vassil Kirov, Ph.D.

2. Objective • Present general trends of aging employment in CEE countries on the basis of Bulgarian example Ageing Employees in Central and Eastern Europe

3. The context of transition • The initial reforms (liberalisation, demonopolisation) had a striking effect on employment and make enterprises to adopt « survival strategies »leading to massive lay-offs where ageing workforce was often concerned • The privatisation– a long, delayed and complex process, centered on the distribution of the propertybut not on the efficency of the enterprises • FDI became important in mid 90s in Central Europe in the end of the 90s and the beginning of the new decade in South-Eastern Europe Ageing Employees in Central and Eastern Europe

4. Ageing and working in CEE – what is known? • Few research is done during the postcommunist period in Central and Eastern Europe • However there are some comprehensive and comparative reports such as “Age and employment in the new Member States” of the European Foundation • In the context of shortage of labour employers start to think how to retain people at work Ageing Employees in Central and Eastern Europe

5. Population by Age in CEECs Ageing Employees in Central and Eastern Europe

6. New Europe is becoming older… • As in Old Europe an upward trend in the population’s age can also be observed in the New Member States (NMS) • Between 1991 and 2004, the proportion of the population aged 50 years and over increased in all countries • In the Czech Republic, Slovenia, Bulgaria and Poland, by about five to six percentage points • In some countries there is a concern about the demographic crisis Ageing Employees in Central and Eastern Europe

7. Employed population in CEECs by age Ageing Employees in Central and Eastern Europe

8. Emplyment rate by country Ageing Employees in Central and Eastern Europe

9. Two trends about the employment of older people • A comparatively higher employment rate among older workers (aged 50–64 years) was found in Baltic states and the Czech Republic, Lithuania and Latvia, ranging from 55.1% to 61.7%. These are also countries with a comparatively older workforce. In contrast, in Poland and Malta, the employment rate of older people was quite low at around 38%. • In relation to the 65 years and older age group, the average European employment rate stood at 3.7% in 2004. The employment rate for this category of workers was particularly high in Romania, Estonia, Latvia and Slovenia, ranging from 7.2% to 15.8%. In general, a decline in employment rates with increasing age can be observed. Ageing Employees in Central and Eastern Europe

10. Policies towards active ageing in NMS • Very often policies towards active ageing in the NMS are declarative – e.g. in 2002, the Bulgarian NEAP included a section on the ‘Development of active ageing policy’, aimed at the development of a strategy for the vocational training of older people. • The labour legislation could contain clauses that could cause problems with the employment of ageing people. According to the Bulgarian labour law, employers are obliged to pay employees a monthly length-of-service allowance, calculated as a percentage of the basic wage and representing at least 0.6% for each year of service. Ageing Employees in Central and Eastern Europe

11. The role of the Social Partners towards active ageing • Although the social partners are generally engaged in employment policy with a view to developing the interests of their members, they rarely specifically address the problem of older workers, as many examples of the European Foundations show Ageing Employees in Central and Eastern Europe

12. Increasing Retirement Age… • Pension reforms in all the CEECs in the 90s or during the current decade aimed to diversify the system, often introducing the three pillars and to rise gradually pension age – 65 in Bulgaria and Romania, 62 in Latvia and Slovakia, etc. Ageing Employees in Central and Eastern Europe

13. Company policy examples • Good practices are rare, most of them are in public companies or subsidiaries of FDIS • Rewarding older workers for their experience • Active recruitment and employment of older workers • Training and skills development • Redeployment of workers to new positions Ageing Employees in Central and Eastern Europe

14. Company policy examples • Flexible working practices • Health and well-being • Exit policy • Comprehensive approaches to active ageing • Some of these cases could have diverse interpretations • Often companies are not aware that they are ‘good practice’ • Informal arrangements still are important in South-Eastern Europe Ageing Employees in Central and Eastern Europe

15. Conclusions • Practices developed in particular sectors of the old member states could be interesting and inspiring for the NMS, especially if real demand from companies exist • There is a need to stimulate debate among public actors and social partners about ageing • Ageing aspect should be stressed in the domain of health and safety, training, etc. Ageing Employees in Central and Eastern Europe