Paper short abstract:

Drawing on field research and theoretical literature this contribution aims to assess the implications of innovative practices in some Japanese companies to support employment extension and to examine the conditions of emergence of a new employment psychological contract for old and young workers.

Paper long abstract:

Since the 1960s Japanese governments have aimed at reducing discriminatory practices against senior workers and imposed constraints in companies to prolong employment. Those initiatives have been taken concomitantly with the rise of age eligibility of public pension. They must be understood in the framework of the ageing of population and the necessity of balancing the social security budget but, more broadly, in the line of the long-term strategy of creating an inclusive society integrating everybody in a social and work environment that gives the opportunity to remain active at all ages.

Challenging in several HRM dimensions, the pressure exerted on companies could also offer the opportunity for a negotiation of a 'new deal' between employers and their older workers and, by extension, younger employees, and trigger a new dynamics in employment relationships for all segments of the workforce. The traditional system of re-hiring retired workers under mutually advantageous financial conditions (pension-work schemes and change of status) explains the relatively high number of elderly Japanese at work. However, it never pushed companies to optimize the talent of older workers. Their policies have focused on keeping older workers at work but without thinking about their development potential. The obligation to keep a larger number of old workers for a longer period force them to innovate in terms of work status and conditions, notably training and career opportunities.

In this contribution the terms of 'new deal' and psychological contract are used in the context of new policies and practices, and the perceived choices that they offer to employees and employers. The panel contribution draws on theoretical literature relevant to the topic and on the results of field surveys by the authors about innovative policies and practices that are designed to shape and allow room for negotiation towards delivering this 'new deal'. They will be presented and their implications and limitations highlighted and assessed. Overall, this panel proposes to identify the current and emerging policy trends developed by a number of progressive companies to support the continued or - as an emerging policy shift - 'prolonged' employment of older workers.

Paper short abstract:

This contribution aims to identify and discuss management practices developed by some Japanese companies to support the necessary extension in terms of age of employment of their employees.

Paper long abstract:

The ageing of the population faced by Japan since the 1970s has opened up an in-depth debate on the funding of its pay-as-you go pension system. The chosen solution, inspired by advances in life expectancy and improved individuals' health, has been the lengthening of the contribution period, which consequently extends the working life of employees. This choice is reflected in public employment policies that encourage companies to employ and retain middle-aged workers. In the 1960s, the Japanese government focused on reducing discriminatory practices in hiring senior workers and imposed quotas of older workers in companies in the 1970s. Then it began to take more radical measures aimed at raising the age of mandatory retirement to 60 in the mid 1980s and to 65 in the early 2000s. Today Japanese companies must adapt to this new environment. Extending working life, however, implies many challenges for Human Resource Management in many areas: payroll management, balance of the age structure, working time arrangements, ergonomic workplace design, management of occupational health, improvement and adaptation of training program, etc. Since 2009, we have conducted several interviews with Japanese companies considered as progressive in the employment of senior workers. In this presentation, we propose to identify the practices developed by these companies to support the continued employment of older workers. We will also discuss, on the basis of the theoretical literature, the implications and limitations of these practices.

Paper short abstract:

In the context of Japan's rapidly ageing society and shrinking population this paper identifies and examines HRM policies and practices being developed by Japanese employers to prolong the working life of employees aged 50+ in Japan and suggests implications for HRM in Japan and similar economies.

Paper long abstract:

This discussion draws on current literature and data from five case studies in order to highlight main explicative factors of the peculiarities in terms of how elderly workers continue to be employed in Japan. It assesses the direction followed by public authorities and private organisations to keep elderly people at work in acceptable social and economic conditions. Evidence suggests that Japan has been successful in social and economic terms in the management of older workers. Historically, policy-makers in Japan tend to encourage the unemployed or inactive back into jobs or urge those in employment to delay retiring in order to avoid a long disconnection from the labour market. As a result, older employees tend to stay in the labour market in larger numbers and for longer time than in most European countries. However, this discussion demonstrates how such policy outcomes come with complications, even paradoxes. For example, it could be argued that mandatory retirement age at 60 combined with de facto acceptance of age discrimination, and large differential of treatment between regular and non-regular employment have largely contributed to explain the higher labour force participation rates for older workers. Overall, this discussion concludes that traditional policies and practices of Japanese human resource management in relation to employing older workers are now unsustainable under the impact of demographics, the socio-cultural context, the regulatory environment and the subsequent need for changes in the social security system. Overall, the argument is developed that, in relation to the employment of elderly workers in Japan, there is a need for a new deal.