OECD Forum Virtual Event: Retaining Talent at All Ages, May 2023

 

Remarks by Mathias Cormann, Secretary-General, OECD

17 May 2023

 

Minister Opperman,

Distinguished guests,

Colleagues,

Welcome to this OECD Virtual Forum Event on “Tackling the Great Mismatch: Retaining Talent at All Ages”.

Labour markets not only recovered very strongly from the pandemic. In many countries job markets remain very tight, even after an extended cycle of monetary policy tightening.

In March 2023, the OECD average unemployment rate was 4.8%, compared with 5.3% in December 2019.

Globally, 75% of employers reported talent shortages in 2022.

Job mobility has increased in recent years.

The OECD report on “Retaining Talent at All Ages” finds that, from 2012 to 2019, average job tenure fell by about 8%, or nine months across OECD countries.

Dynamic labour markets and job mobility are generally positive.

For workers, who may be moving to new positions for a promotion.

And for the economy more broadly, as the flow of workers between firms and sectors promotes an efficient allocation of labour and talents and facilitates adjustment to structural changes in the economy.

But high job turnover can be disruptive.

It can increase businesses’ recruitment costs and lead to losses of human capital.

And it can affect workers, especially older ones, as they are more likely to leave the labour market altogether than to find a new job – especially if they have low levels of education.

These trends – high turnover and talent shortages – may well continue in the coming years.

The twin digital and green transitions continue to reshape job markets and skills needs.

It is essential to ensure that all workers can navigate these transitions and benefit from the opportunities that they create.

And the population is ageing, which leads to lower workforce participation.

The share of the OECD population aged 65 and over will rise from 17% in 2019 to 27% by 2050.

The effect on labour markets could be amplified as more people may need to take time away from the labour force to care for elderly family members.

The result is a labour market where a greater number of people throughout their careers will be shifting jobs, and alternating work with periods of training or care responsibilities.

In this context, governments and businesses must take steps to keep talent in the workforce, including retaining older workers, and facilitate workers’ mobility towards occupations and jobs with growing demand.

The OECD report on “Retaining Talent at All Ages” identifies several key levers to improve worker retention and adaptability.

First, good-quality jobs and working conditions are essential to retain talent.

A global survey of employees by AARP finds that the top three reasons why workers quit a job are low pay, feeling undervalued, and a lack of career advancement.

Employees of all ages also value flexibility in their working arrangements, in terms of when and where they work.

For instance, a survey in the United States finds that 60% of respondents aged 55 and over and not working would be willing to return to work with a flexible schedule.

But evidence suggests that older workers are less likely to benefit from such flexibility compared to younger workers.

This can make it more difficult for them to stay in the workforce longer.

Employers must also tackle discriminatory attitudes towards younger and older workers which can undermine productivity and talent availability.

For example, Oslo Airport introduced an ageing and life-phase human resource training programme to help managers to deal with the challenge of managing different generations.

Second, new policies and practices can help to reconcile work with health issues and care responsibilities.

In 2019, at least 21% of workers aged 50-64 quit their job because of ill-health.

Workplaces can be redesigned to prevent poor health outcomes of workers, and to retain those who have health issues.

For example, the Ford Fiesta factory in Cologne used innovative methods to re-integrate workers with disabilities into a new production process, harnessing talent that would otherwise go unutilised.

Governments can promote the return to work of partially recovered workers with modified responsibilities, to avoid workers from being excluded from the labour force.

Third, training at all ages will be key: lifelong learning is the only way for people in jobs to adapt to the structural transformations of our economies, and an effective way to boost productivity.

Older workers are often left out of skills development opportunities.

According to the OECD Survey of Adult Skills (PIAAC), only 24% of older workers participated in training in a typical year on average, while the figure is 44% for prime-age workers.

Many governments are making progress in addressing this challenge and ensuring older workers are not left behind.

For example, in Germany, the public employment agency supports training of low-skilled and older workers in SMEs. Subsidies for small firms are 100% of training costs; for medium-sized firms they are 50%.

Making changes in these three policy areas – promoting better job quality, improving employee health, and investing in training and skills – will help to create better workplaces, more adaptable and motivated workforces, and a more resilient labour market.

With a strong commitment from employers, workers, and governments, we can embrace the talent of an age-inclusive workforce and ensure that workers’ skills are used to their full potential.

I wish you a very positive, forward looking and productive discussion.

Thank you.