To retire or not to retire - employer flexibility is the answer.
By Sumit Agarwal, Published The Straits Times, 18 Apr 2019
I am turning 50 next year. This means I have only 12 more years to work, given that Singapore's minimum retirement age is 62. In my middle age, I start questioning why retirement is even necessary. I love what I do and going to work gives me a greater sense of purpose every day.
While the Tripartite Workgroup on Older Workers is contemplating raising the statutory retirement age, I believe the policy should be scrapped altogether because of Singapore's ageing population.
THE CASE AGAINST A MINIMUM RETIREMENT AGE
There are four main reasons why we should not have a retirement age.
Historically, a retirement age helps an economy manage and align its workforce with population growth. In a country where there are more young people than an elderly population, not having a retirement age means the young working-age population may not be able to get jobs and as a result, unemployment will rise.
Furthermore, higher unemployment can make or break an election and as a result, is a major point of contention in a democracy. Take India, for example, where 30 to 40 per cent of the population is under 25 years of age. There, a statutory retirement age would make sense. Without it, many of these young working-age adults would be unemployed. However, in ageing economies with low population growth such as Japan, South Korea and Singapore, one questions how a retirement age is still relevant since older workers are not a threat to unemployment.
Second, life expectancy today is longer. Traditionally, retirement is viewed as a rite of passage where employees stop working in order to enjoy the fruits of their labour. Back then, life expectancy was shorter. However, today, the average life expectancy is relatively higher due to advancements in technology, healthcare and lifestyle.
In Singapore, for example, the health-adjusted life expectancy is projected to be 76.7 by 2030. As people live longer, their retirement savings in their Central Provident Fund (CPF) need to sustain them until death. Therefore, they need to continue working.
Research also suggests that retirees are more likely to die sooner than expected due to idleness. The research by the National Bureau of Economic Research in the United States found a robust 2 per cent increase in male mortality after the age of 62, which is when Americans can claim their social security payments. The increase in male mortality is related to being retired from the labour force and associated changes in lifestyle.
A MISSED OPPORTUNITY
While Singaporeans can work beyond the retirement age of 62, some employers are using the minimum retirement age as a mechanism to push out older workers. The common perception is that older workers cost more to retain and are less productive. Many employers would rather bring in younger staff who cost less and can be trained. As a result, older workers who do find re-employment are working in sub-optimal jobs.
In the US, where there is no retirement age, the economy has very low unemployment, high wages and high productivity. It is a process of natural selection among older workers, where some choose to continue working, some opt to retire, while others are laid off because they are not as productive.
To avoid a missed opportunity, employers should develop and adopt new strategies on how to use older and more experienced staff to increase productivity, enhance organisational culture and bring additional value to the organisation at the salary paid to them.
In addition, keeping the older and more experienced workers in the workforce would also not jeopardise opportunities for younger workers, given Singapore's low population growth. Eliminating retirement age would also likely result in Singapore importing fewer foreign talent.
EMPLOYER FLEXIBILITY
Employers also need to be empowered. They should have the flexibility to retain high performers and let go of underperformers. To address the high costs of retaining experienced staff, employers can adapt by offering part-time options, agreeing with the staff member to maintain current salary levels, or even re-scoping his job description to that of a consultant, adviser or strategic planner. They need to identify and play on the more experienced staff member's strengths.
For example, in an academic context, a university may offer a faculty member who is passionate about teaching the option to teach more and do less research. The institution may offer a reduced workload at a corresponding salary. The faculty member stays active as a contributor, while the students get to learn from a great scholar.
With this flexibility, employers are more likely to keep senior employees and not let go of talent.
CHANGING THE SOCIETAL MINDSET
An official retirement age is no longer a policy relevant to present-day Singapore. Such a policy might be necessary when a country is experiencing rapid population growth. However, in Singapore, we have transitioned from having a large migrant population to one that is more residential and ageing.
We need to recognise that many senior workers bring a wealth of experience and that this experience simply does not just disappear once they turn 62.
Singapore needs to adopt a new mindset and view age as positively correlated with valuable experience and proven talent, rather than ineptitude.
Only when this happens will we see the benefits - increased productivity, better skills continuity through mentorship and training, and less pressure on our CPF system as more older workers will continue to work and contribute to, rather than draw down on, CPF balances. This can be a win-win for both employers and employees, as well as the Singapore economy.
Sumit Agarwal is the Low Tuck Kwong Distinguished Professor of Finance, Economics and Real Estate at the National University of Singapore Business School.
By Sumit Agarwal, Published The Straits Times, 18 Apr 2019
While the Tripartite Workgroup on Older Workers is contemplating raising the statutory retirement age, I believe the policy should be scrapped altogether because of Singapore's ageing population.
THE CASE AGAINST A MINIMUM RETIREMENT AGE
There are four main reasons why we should not have a retirement age.
Historically, a retirement age helps an economy manage and align its workforce with population growth. In a country where there are more young people than an elderly population, not having a retirement age means the young working-age population may not be able to get jobs and as a result, unemployment will rise.
Furthermore, higher unemployment can make or break an election and as a result, is a major point of contention in a democracy. Take India, for example, where 30 to 40 per cent of the population is under 25 years of age. There, a statutory retirement age would make sense. Without it, many of these young working-age adults would be unemployed. However, in ageing economies with low population growth such as Japan, South Korea and Singapore, one questions how a retirement age is still relevant since older workers are not a threat to unemployment.
Second, life expectancy today is longer. Traditionally, retirement is viewed as a rite of passage where employees stop working in order to enjoy the fruits of their labour. Back then, life expectancy was shorter. However, today, the average life expectancy is relatively higher due to advancements in technology, healthcare and lifestyle.
In Singapore, for example, the health-adjusted life expectancy is projected to be 76.7 by 2030. As people live longer, their retirement savings in their Central Provident Fund (CPF) need to sustain them until death. Therefore, they need to continue working.
Research also suggests that retirees are more likely to die sooner than expected due to idleness. The research by the National Bureau of Economic Research in the United States found a robust 2 per cent increase in male mortality after the age of 62, which is when Americans can claim their social security payments. The increase in male mortality is related to being retired from the labour force and associated changes in lifestyle.
A MISSED OPPORTUNITY
While Singaporeans can work beyond the retirement age of 62, some employers are using the minimum retirement age as a mechanism to push out older workers. The common perception is that older workers cost more to retain and are less productive. Many employers would rather bring in younger staff who cost less and can be trained. As a result, older workers who do find re-employment are working in sub-optimal jobs.
In the US, where there is no retirement age, the economy has very low unemployment, high wages and high productivity. It is a process of natural selection among older workers, where some choose to continue working, some opt to retire, while others are laid off because they are not as productive.
To avoid a missed opportunity, employers should develop and adopt new strategies on how to use older and more experienced staff to increase productivity, enhance organisational culture and bring additional value to the organisation at the salary paid to them.
In addition, keeping the older and more experienced workers in the workforce would also not jeopardise opportunities for younger workers, given Singapore's low population growth. Eliminating retirement age would also likely result in Singapore importing fewer foreign talent.
EMPLOYER FLEXIBILITY
Employers also need to be empowered. They should have the flexibility to retain high performers and let go of underperformers. To address the high costs of retaining experienced staff, employers can adapt by offering part-time options, agreeing with the staff member to maintain current salary levels, or even re-scoping his job description to that of a consultant, adviser or strategic planner. They need to identify and play on the more experienced staff member's strengths.
For example, in an academic context, a university may offer a faculty member who is passionate about teaching the option to teach more and do less research. The institution may offer a reduced workload at a corresponding salary. The faculty member stays active as a contributor, while the students get to learn from a great scholar.
With this flexibility, employers are more likely to keep senior employees and not let go of talent.
CHANGING THE SOCIETAL MINDSET
An official retirement age is no longer a policy relevant to present-day Singapore. Such a policy might be necessary when a country is experiencing rapid population growth. However, in Singapore, we have transitioned from having a large migrant population to one that is more residential and ageing.
We need to recognise that many senior workers bring a wealth of experience and that this experience simply does not just disappear once they turn 62.
Singapore needs to adopt a new mindset and view age as positively correlated with valuable experience and proven talent, rather than ineptitude.
Only when this happens will we see the benefits - increased productivity, better skills continuity through mentorship and training, and less pressure on our CPF system as more older workers will continue to work and contribute to, rather than draw down on, CPF balances. This can be a win-win for both employers and employees, as well as the Singapore economy.
Sumit Agarwal is the Low Tuck Kwong Distinguished Professor of Finance, Economics and Real Estate at the National University of Singapore Business School.
The two competing ideologies on ageing
Ageing workers bring more experience, but potentially more health problems as well. Managing this tension in the workforce is critical.
By Jeff Hwang Yi-Fu, Published The Straits Times, 18 Apr 2019
Modern culture holds two competing ideologies on ageing.
One sees ageing as a decline into decrepitude and irrelevance. The other considers ageing as entering a richer phase of personhood and identity, which brings with it greater liberty to pursue fulfilment.
Mr Thomas Cole, director of the McGovern Centre for Humanities and Ethics at Cornell University in the United States, was quoted as saying: "The culture's problem is that we split ageing into good and bad. We're unable to sustain images of growing older that handle the tension between spiritual growth, the good, and physical decline, the bad."
The same tension runs in the workplace safety and health (WSH) arena. The new wave of older workers wants to remain engaged and productive beyond the traditional retirement age, but they are also the ones among whom we see a higher prevalence of chronic diseases than previous generations.
This tension can be overcome by cultivating a culture where people pursue high levels of well-being from their youth to their older years, and providing the environment for that to happen.
Singapore's new generation of older workers comprises the baby boomers, those born between 1947 and 1964, who are now aged between 55 and 72. By 2030, all our baby boomers will be over the age of 65. One in six Singapore residents will be above 65 years old; in 2005, it was one in 12.
This generation of older Singaporeans lives longer, is better educated and richer than previous ones. They expect to continue living independently and view old age as an opportunity to spend more time with family and pursue activities of interest.
Their top reasons for wishing to remain employed include receiving an income, staying mentally and physically active, and engaging in something meaningful. They do not associate ageing with checking out of living life, but see it as a phase in life that is full of potential for development and self-actualisation.
This is good news for Singapore and businesses. Singapore's resident workforce is ageing and shrinking. Close to one in four, or 23.8 per cent, of our workforce last year was aged 55 or older, a significant increase from 14.6 per cent in 2008.
In 2013, the Government projected that by 2030, every person exiting the working age of 65 years old would be replaced by only 0.7 person entering working age, or 20 years old. Our old-age support ratio is projected to fall to 2.1 by 2030, which means a ratio of two working-age persons for every person aged 65 years and over; it was 4.8 last year.
An ageing workforce can slow economic growth and national productivity. Singapore's workforce is a key factor in attracting foreign companies to continue doing business here. Enabling older workers to remain in the workforce for as long as they desire is necessary to counter the potential adverse economic impact of an ageing society.
At the same time, older workers are reservoirs of accumulated skills, experience and tacit knowledge, which are invaluable assets to productivity and performance.
The more an organisation can transmit these assets to younger workers as part of its knowledge retention, the more edge it will gain over its competitors. Organisations with a multi-generational employee profile can benefit from mentorship to attract young talent. Inter-generational cross-pollination of ideas and perspectives can yield a dynamic and rich environment for innovative thinking. A company's ability to tap into the potential of workers advancing in age will prove to be a competitive advantage.
In Singapore, half of the top 10 causes of loss in healthy years due to disability are chronic illnesses - cancers, diabetes and diseases of the heart, lung and kidney. To help older workers enjoy more productive years, early detection and good management of chronic diseases are important.
While personal health is an individual responsibility, poor employee health compromises safety, productivity and bottom lines. Therefore, both employers and employees must play their part in managing health.
Companies like SBS Transit and Keppel Offshore & Marine have tapped the Total Workplace Safety and Health (Total WSH) initiative to proactively cultivate a culture of safety, health and well-being among their employees.
Both SBS and Keppel provide free health screenings and follow-up support for its staff. SBS also supports bus captains with chronic conditions like diabetes through modified work schedules. For example, assigning them to shorter feeder services allows them to have timely intake of their medication and food to better manage their sugar levels.
High levels of employee well-being translate to greater employee engagement and productivity. Providing employees with safe and healthy work environments, while supporting their pursuit of well-being, makes good business sense.
A trans-generational perspective has served Singapore well in its planning and policymaking. In the Ministry of Manpower's latest WSH 2028 strategy, the same perspective is demonstrated in its commitment to prepare for the future of work and promote technology-enabled WSH.
We should approach the issue of an ageing workforce in the same way. We must not only look at the current wave of ageing workers, but also begin considering future generations of older workers, starting from those aged 15 to 30.
The convergence of various trends - an ageing population, intensified digitisation, rise of the gig economy and the Fourth Industrial Revolution innovations - is altering the face of work.
The current 15-30 age group will be the first batch to experience this convergence in full swing. The Government and employers need to begin empowering young Singaporeans to navigate future work, health and safety issues.
A focus on cultivating this age group to value well-being as much as wealth, and developing their individual health literacy, will yield great dividends. By focusing on helping this group pursue well-being early, even as they build wealth, we will push back the onset of chronic diseases in the nation.
As they, in turn, impart to their children the value of well-being and health literacy, our society will truly be well positioned for the future.
Dr Jeff Hwang Yi-Fu is a lecturer at the Saw Swee Hock School of Public Health of the National University of Singapore, and an occupational health consultant with the university's Office of Safety, Health and Environment.
Ageing workers bring more experience, but potentially more health problems as well. Managing this tension in the workforce is critical.
By Jeff Hwang Yi-Fu, Published The Straits Times, 18 Apr 2019
Modern culture holds two competing ideologies on ageing.
One sees ageing as a decline into decrepitude and irrelevance. The other considers ageing as entering a richer phase of personhood and identity, which brings with it greater liberty to pursue fulfilment.
Mr Thomas Cole, director of the McGovern Centre for Humanities and Ethics at Cornell University in the United States, was quoted as saying: "The culture's problem is that we split ageing into good and bad. We're unable to sustain images of growing older that handle the tension between spiritual growth, the good, and physical decline, the bad."
The same tension runs in the workplace safety and health (WSH) arena. The new wave of older workers wants to remain engaged and productive beyond the traditional retirement age, but they are also the ones among whom we see a higher prevalence of chronic diseases than previous generations.
This tension can be overcome by cultivating a culture where people pursue high levels of well-being from their youth to their older years, and providing the environment for that to happen.
Singapore's new generation of older workers comprises the baby boomers, those born between 1947 and 1964, who are now aged between 55 and 72. By 2030, all our baby boomers will be over the age of 65. One in six Singapore residents will be above 65 years old; in 2005, it was one in 12.
This generation of older Singaporeans lives longer, is better educated and richer than previous ones. They expect to continue living independently and view old age as an opportunity to spend more time with family and pursue activities of interest.
Their top reasons for wishing to remain employed include receiving an income, staying mentally and physically active, and engaging in something meaningful. They do not associate ageing with checking out of living life, but see it as a phase in life that is full of potential for development and self-actualisation.
This is good news for Singapore and businesses. Singapore's resident workforce is ageing and shrinking. Close to one in four, or 23.8 per cent, of our workforce last year was aged 55 or older, a significant increase from 14.6 per cent in 2008.
In 2013, the Government projected that by 2030, every person exiting the working age of 65 years old would be replaced by only 0.7 person entering working age, or 20 years old. Our old-age support ratio is projected to fall to 2.1 by 2030, which means a ratio of two working-age persons for every person aged 65 years and over; it was 4.8 last year.
An ageing workforce can slow economic growth and national productivity. Singapore's workforce is a key factor in attracting foreign companies to continue doing business here. Enabling older workers to remain in the workforce for as long as they desire is necessary to counter the potential adverse economic impact of an ageing society.
At the same time, older workers are reservoirs of accumulated skills, experience and tacit knowledge, which are invaluable assets to productivity and performance.
The more an organisation can transmit these assets to younger workers as part of its knowledge retention, the more edge it will gain over its competitors. Organisations with a multi-generational employee profile can benefit from mentorship to attract young talent. Inter-generational cross-pollination of ideas and perspectives can yield a dynamic and rich environment for innovative thinking. A company's ability to tap into the potential of workers advancing in age will prove to be a competitive advantage.
In Singapore, half of the top 10 causes of loss in healthy years due to disability are chronic illnesses - cancers, diabetes and diseases of the heart, lung and kidney. To help older workers enjoy more productive years, early detection and good management of chronic diseases are important.
While personal health is an individual responsibility, poor employee health compromises safety, productivity and bottom lines. Therefore, both employers and employees must play their part in managing health.
Companies like SBS Transit and Keppel Offshore & Marine have tapped the Total Workplace Safety and Health (Total WSH) initiative to proactively cultivate a culture of safety, health and well-being among their employees.
Both SBS and Keppel provide free health screenings and follow-up support for its staff. SBS also supports bus captains with chronic conditions like diabetes through modified work schedules. For example, assigning them to shorter feeder services allows them to have timely intake of their medication and food to better manage their sugar levels.
High levels of employee well-being translate to greater employee engagement and productivity. Providing employees with safe and healthy work environments, while supporting their pursuit of well-being, makes good business sense.
A trans-generational perspective has served Singapore well in its planning and policymaking. In the Ministry of Manpower's latest WSH 2028 strategy, the same perspective is demonstrated in its commitment to prepare for the future of work and promote technology-enabled WSH.
We should approach the issue of an ageing workforce in the same way. We must not only look at the current wave of ageing workers, but also begin considering future generations of older workers, starting from those aged 15 to 30.
The convergence of various trends - an ageing population, intensified digitisation, rise of the gig economy and the Fourth Industrial Revolution innovations - is altering the face of work.
The current 15-30 age group will be the first batch to experience this convergence in full swing. The Government and employers need to begin empowering young Singaporeans to navigate future work, health and safety issues.
A focus on cultivating this age group to value well-being as much as wealth, and developing their individual health literacy, will yield great dividends. By focusing on helping this group pursue well-being early, even as they build wealth, we will push back the onset of chronic diseases in the nation.
As they, in turn, impart to their children the value of well-being and health literacy, our society will truly be well positioned for the future.
Dr Jeff Hwang Yi-Fu is a lecturer at the Saw Swee Hock School of Public Health of the National University of Singapore, and an occupational health consultant with the university's Office of Safety, Health and Environment.
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