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  4. Extension of the Retirement Age and Utilization of Older Workers

2018 Vol.3
Extension of the Retirement Age and Utilization of Older Workers

2018/08/14

Against a backdrop of serious labor shortages, firms are increasingly interested in extending the retirement age and utilizing older employees. Mitsubishi UFJ Research and Consulting conducted a survey to understand the situation surrounding the hiring and utilization of older workers in the Tokai Region. Of the firms surveyed, 25% have implemented or are considering retirement age extension. Since the labor force is expected to shrink in the medium to long run, extending the retirement age is an important option for securing human resources and enhancing the engagement of not only older employees, but also the employees as a whole. Firms are encouraged to consider the possibility of retirement age extension, to make jobs more fulfilling, and to increase the level of employees’ satisfaction regarding how the firm treats them, so that older employees can continue to work actively. To make jobs more fulfilling, it is important to improve relationships between older employees and their superiors, to create an environment where they can feel their worth and where their need for recognition is satisfied, and to clarify expected levels of performance in order to motivate older employees to achieve goals. Gaps can easily arise between older employees’ thinking and their superiors’ expectations and thinking. To bridge such gaps, both older employees and their superiors should recognize the existence of the gaps and change their mindset and actions. To increase the level of employee satisfaction, firms need to set up compensation systems in a way that eliminates imbalances between the roles and responsibilities of employees aged 60 years or older and their wage levels. To position older workers as valuable assets and consistently compensate them throughout their working life, it is necessary to return to a core principle of human resource management with respect to output per unit of labor cost.assigning ability-appropriate roles and responsibilities to each employee and providing appropriate compensation according to his or her performance.

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