Desperate to keep its older workers, Finland is laying on the perks
He's trim, fit, and runs six miles after work every evening. Finnish machine operator Juha Voutilainen, 57, doesn't even think of retirement, though he's racked up more than three decades at Abloy, a $214 million maker of locks and door systems in Joensuu, Finland. An avid runner who competed in the Aug. 18 Helsinki marathon and trains along the verdant pathways circling Finland's eastern lakes, Voutilainen may be headed for a marathon-like career. And Abloy is in the vanguard of a revolutionary global shift in the management of older workers.
Abloy and many other Finnish companies are suddenly treating older employees like a precious resource. Instead of nudging them into early retirement, they're coaxing gray-hairs to work longer with better health benefits, extra weeks of paid vacation, and more. But these companies aren't just feeling charitable. Finland's workforce is aging faster than any other country's--40% of Finns will reach retirement age during the next 15 years. Nearly a quarter of Abloy's 820 workers, for instance, are already over age 55. And companies now recognize that seasoned hands are an important source of knowledge and productivity. "If all our older workers were to leave suddenly, we would lose a lot of knowhow," says Antti Piitulainen, vice-president of operations at Abloy.
The combination of an aging workforce and a shrinking labor pool will affect countries around the world. In Japan, more than 26% of workers are already over 55. And Spain is set to become the world's grayest country by 2050, with half its population older than 55, according to the World Bank. In the U.S., some 19% of workers will be 55-plus by 2012, up from 15.6% in 2005.
Finland is the farthest along in dealing with the aging-worker issue, thanks to a national program called "age ability" launched in 1998. Programs like Abloy's "Age Masters" are spreading, and they're helping companies boost the productivity of older workers and nudge up the average retirement age. At Ores--a $185 million maker of faucets and valves that offers older workers up to 25 extra days off--the average retirement age is now 63, up from 58 in the late 1990s.
Some finnish companies have done an about-face on retirement policies. Swedish-Finnish bank Nordea, which spent a decade restructuring and pushing older workers to retire early, reversed course starting in 2003. It has launched training, mentoring, and health-care initiatives and is all but begging them to stay. Before the program, "people gave up earlier and waited for their career to be over," says Minna Rautakoura, head of human resources at Nordea Finland. "Now they remain in their prime until retirement."
The Finns are lavishing perks on these experienced hands. At Abloy, Age Masters enjoy free massages, company-sponsored golf lessons, language training, and free outings to the theater. The only requirement for the program: A 55th birthday and a cardiac checkup. "They pamper us," says lock assembler Liisa Sutinen, 63, a 35-year veteran. Of course, all this coddling is expensive. Extra vacation time for Abloy's 200 Age Masters costs the company roughly $430,000 a year. But that's money well spent, management figures, since big companies in Finland must shoulder pension payments for workers who retire before age 63.
Programs such as Age Masters are sparking a broader rethink in Finland of how to manage the health of younger workers, too. Abloy, for instance, now offers free access to fitness clubs and swimming pools with an employee ID card. "If you aren't in good condition when you're 55, you can't improve a lot," says Abloy's Piitulainen. And that's key, because in Finland, at age 55, most workers have long careers ahead of them.