SMEs value the expertise and reliability of older employees

• More than one in five of the workforce is aged over 54
• Demographic change will make older workers even more important
• Working conditions have to be adapted

Demographic change is also leaving its mark on the world of work in Germany, with over a fifth of people employed by SMEs now over the age of 54. The strengths, weaknesses and needs of employees change as they grow older. As part of a special analysis of the representative KfW SME Panel, KfW Research has been investigating how small and medium-sized enterprises assess these changes and what value they attach to so-called "silver workers" in their companies. The conclusion: They are highly valued.

SMEs rely primarily on the dependability and know-how of their older employees: with regard to the former, 62% see their older workforce as having an advantage over their younger colleagues, while the figure is 56% when it comes to expertise. The majority of SMEs think it is simply not true that older employees are less able to work under pressure, with only 17% of SMEs expressing that opinion, while more than half do not believe them to be any less resilient. Things become less clear when it comes to the question of whether an older workforce gives rise to higher personnel costs as a result of larger salaries and more days of work due to ill health. 42% of SMEs deny there is any such link, but a not insignificant 25% agree.

Demographic change and a shortfall in the potential labour force will shift the focus more towards older employees. If companies are to secure skilled specialists, they will increasingly need to adopt a strategy of retaining older workers for longer and in productive roles. Work processes and working conditions will have to be adapted, for example by designing workplaces that are age-appropriate and ergonomically suitable, offering in-house further training and promoting health. SMEs have a long way to go in this area. Only 17% of small and medium-sized enterprises have thus far adopted measures to keep older employees on for longer, another 28% have plans to do so and are on the starting blocks.

"SMEs do not perceive their older workforce as a liability but as a golden asset", was how Dr Jörg Zeuner, Chief Economist of KfW Group, commented on the study's findings. "However, if we are to make the most of the strengths of older employees, we must drive forward a transformation in the world of work. The combination of older colleagues with valuable knowledge derived from experience and younger ones with easier access to new developments can generate synergies and boost productivity. That is why SMEs would do well to pave the way for a multigenerational work environment and continuous further training".

The current edition of Focus on Economics with the title "Older workers in SMEs – a golden asset or a liabilty? " is available at

www.kfw.de/fokus(PDF, 1 MB, non-accessible)