The age guillotine is shifting: over 50s are finding jobs again

Kenan Demir is someone who gives the lie to pessimism. Instead of surrendering to the old age guillotine in the job market, the 61-year-old Swiss man went in search of a new job after being released this summer. Before that, he had worked in the tax department of a German financial institution in Zurich for ten years. He didn’t have high hopes at first, but he turned out to be wrong. He sent his first application in mid-August, and three weeks later he received an invitation for an interview. According to Demir (name changed by the editor), he was as surprised as he was pleased. The banker continued to apply while the selection process was ongoing. Finally, the regional employment agency (RAV) also requires ten attempts to find work per month. In the end, the 61-year-old had not just one but two interesting positions to choose from.

Personal contacts are crucial

According to his own assessment, personal contacts, the mental attitude and the outplacement advice that his old employer had offered him helped him with his applications. On the other hand, companies where he didn’t know anyone personally were quickly rejected. The tight labor market has also benefited him. Two years earlier he had tried to break away from his previous employer. But then Corona came. But what didn’t work at the age of 59 would have worked at the age of 61, says the son of Turkish immigrants with satisfaction.

Demir is a prime example of the fact that older workers also have a chance of finding a new job well beyond the informal threshold of 50 years. The age guillotine is shifting upwards more and more with the tight labor market. 50 years is no longer an issue, neither is 55 years, 58 and 59 would still work, over 60 is still difficult, say HR managers.

The catering industry hardly knows any borders anymore

There are big differences by industry. According to a study by the outplacement consultant Rundstedt, even 60-year-olds can find jobs again, especially in the catering trade, where the shortage of skilled workers is most pronounced. One reason for this is that the barriers to entry in this area are lower than elsewhere. Many companies also gave in the health and social services, among service providers, but also in construction and in information technology in a survey in summer 2022 indicated that they could have recruited fewer employees than they would have liked. The financial sector, on the other hand, where the shortage of skilled workers is less pronounced, tends towards early retirement instead of late recruitment.

The individual work biography plays an important role. Anyone who has kept changing jobs and kept up to date professionally is easier to place than applicants who appear immobile. In principle, compromises become more necessary the older the applicant is. Even Demir did not make the change without concessions. With his new employer, he will earn roughly the same as before. But he had already accepted a drop in wages two years ago. Even then there was a threat of dismissal. However, he was able to avert this by accepting a lower rank and a lower wage.

The dried-up labor market is forcing companies today to be more open to groups that they previously would not have considered a priori. In addition to older employees, this also includes mothers who are planning to return to work. Demir experienced this too. He didn’t notice as much that he had been discriminated against because of his age, says the late job changer. On the other hand, his Turkish name and his origins were a burden that he could and had to balance in personal contact.

Will the pendulum swing back again in the future?

In the meantime, it has been good form in most companies for years to be open to candidates of all genders and origins. However, it was often just lip service, says Pascal Scheiwiller, CEO of the Swiss outplacement specialist Rundstedt. But the dried-up labor market is creating a new climate. Within a year, the situation had changed significantly, companies had become more open and tolerant – out of necessity.

It is questionable, however, whether or when the pendulum will swing back. If the economy cools down, as is currently the case, fewer workers will be needed. Companies could be tempted to fall back into old patterns. According to a survey published in October, a quarter of companies in Germany are already considering Munich Ifo Institute the downsizing of jobs. In Switzerland, Credit Suisse, Novartis, Clariant and the industrial company Schweiter have announced job cuts. Overall, however, the situation appears to remain robust for the time being, at least in Switzerland. According to figures from the Federal Statistical Office on Monday, the unemployment rate remained at a record low of 1.9 percent at the end of October.

But even if Russia’s attack on Ukraine causes the economy to cool down, the demographic effect will have a longer-term effect. The baby boomer generation is gradually leaving the labor market and is not being adequately replaced by generations Y and Z, which have lower birth rates. The retirement wave will peak around 2030. And since the prognosis popular a few years ago that we would run out of work as a result of digitization has not yet come true, employees have a good hand.

Alarming trend towards earlier farewells

In their own interest, companies should therefore give more consideration to older applicants. This is also important from a social point of view. Finally, life expectancy is increasing. This means that more and more years of retirement have to be financed through the years of employment. This calculation only works if employees who have been out of youth for a certain time are still professionally mobile, can change jobs and do not become stuck in an unsatisfactory situation or find no new work after being laid off.

However, it is alarming that, despite the fact that the age guillotine has been pushed up, the average age at which people leave the labor market is falling again. It was 65.1 years in 2021, below the 2017 peak of 65.8 years. This means that there are always more retirees for fewer workers. While in 2011 there were 32.7 people aged 65 and over for every 100 employed persons between the ages of 20 and 64, in 2021 the figure was 36.2 people. At the same time, the proportion of people over 50 in the labor force is increasing.

However, the song of praise for the new stopgap in the labor market also has its limits. Although there are more and more employees in the 50+ age group, there are actually only a few available. Traditionally, the unemployment rate for people over 50 in Switzerland is below average. The effective pool in which the companies can fish is therefore rather small. Another catch: Older employees have higher wages on average, which means they are more expensive and therefore less competitive than younger employees. The higher pension fund contributions amplify this effect. And to make matters worse, older workers may also be sick more often.

A ray of hope for older people, on the other hand, is that a narrow majority (51 percent) of Swiss human resources managers, according to a large survey by outplacement specialist Rundstedt, is quite critical of the increasing obsession with youth when it comes to recruitment. 72 percent of the more than 9,000 HR managers surveyed believe that young people demand a lot more, but do not do more than their older colleagues.

The fact that young people exploit their bargaining power is not well received in many companies. Here a clear dissatisfaction was expressed among the HR managers, says Rundstedt CEO Pascal Scheiwiller. This resentment could well trigger a more fundamental rethinking in favor of older people, who are commonly seen as less demanding, more reliable and more loyal.