EMPLOYMENT PROBLEM IN HEALTHCARE AND LEGISLATION
Master thesis, MscBA, specialization Human Resource Management University of Groningen, Faculty of Economics and Business
December, 2009
WIARDA HIDDEMA Student number: 1519069 e-mail: W.Hiddema@student.rug.nl
1st Supervisor University prof. mr. dr. E.M. Kneppers-Heijnert
2nd Supervisor University drs. J. Van Polen
ABSTRACT
TABLE OF CONTENTS
1 INTRODUCTION ...4
1.1. Tight situation on the Dutch labour market...4
1.2. Government interference...4
1.2.1. Older people and revised legislation...5
1.2.2. Objective of legislation...5
1.3. The scope of this study...6
1.4. Research question and sub-questions...6
1.4.1. Older workers...7
1.4.2. The SLAP-model...7
1.4.3. Research design...7
2 THEORY...8
2.1. Former versus revised legislation ...8
2.2. Reason to revising legislation ...8
2.3. The SLAP-model ...9
2.3.1. The SLAP-model...9
2.3.1.1. Legislation and the HR strategy...12
2.3.1.2. Legislation and labour demand...12
2.3.1.3. Legislation and labour supply...13
1 INTRODUCTION
1.1. Tight situation on the Dutch labour market
This research is written to fulfil the criteria of the final project for the Master’s Degree in Business Economics; specialization Human Resource Management (HRM). The starting-point of this research is the tight situation on the labour market in 2009. Labour demand, especially in certain sectors, is larger than labour supply. Ageing of the population and fewer young people that are
available for work due to a reduced birth-rate are two important causes for labour supply to decrease. A structural cause of ageing of the population is increased life expectancy. Due to this the number of older people in the population increases relative to the younger generation; a phenomenon that is described by the term ageing of the population. Another cause of ageing is the strong growth of the population caused by the large number of births just after the Second World War; a phenomenon referred to as the baby boom. Research shows (Alders, 2003) that it is plausible that ageing of the population will decrease after the year 2040, since the after war generation will have passed away by then.
Until the sixties and seventies of the last century the size of the population increased. After these years the rate of growth decreased significantly. Since that time, the number of young people has decreased with respect to the number of older people. The size of the working population is amongst others influenced by these two developments.
1.2. Government interference
The Government intends to decrease the shortage on the labour market by increasing the number of available workers within the working population. In collaboration with the Social and Economic Council of the Netherlands (SER) the Governments’ aim is to increase the number of workers within the available working population in 2016 to 80 %. The Netherlands Bureau for Economic Policy Analysis (CPB, 2009) calculated how this objective can be reached (Figure 1).
The working population is divided into six categories. It should be noted that in the category 20 to 54 years, a distinction is made between men and women. The largest discrepancy between current participation and targeted participation exists within two categories, namely the category ‘women’ and the category ‘older people’. This research is restricted to promoting labour participation in the category ‘older people’ and focuses on a larger age category, namely 50 to 64 years1. This is explained further on in this research. This research does not distinguish between labour participation of men and women. The objective of the Government is to increase the participation level of people between the ages of 55 to 64 that are active on the labour market from 47 % in 2008 to 58 % in 2016.
1
FIGURE 1
Gross labour participation 2008 and calculation by the Netherlands Bureau for Economic Policy Analysis (CPB) with regard to the 80%-objective of the SER-advice
Realisation 2008 in % Target figure 2016 in %
Total 20 – 64 years 74. 8 80. 0
Men 20 – 54 years 83. 6 85. 0
Men 20 – 64 years 90. 0 92. 0
Women 20 – 64 years 65. 9 74. 0
Women 20 – 54 years 74. 1 79. 5
Older people 55 – 64 years 47. 0 58. 0
Source: CPB, 2009
1.2.1. Older people and revised legislation
Based on research of amongst others the CPB (2009), the Government concluded that the number of working older people can still increase. In the past few years the Government has already taken measures with the intention to making older people work longer. Examples are the abolition of early retirement (VUT) and adapted pension systems. The rules of unemployment benefit have also changed e.g. the follow-up unemployment benefit for unemployed people past the age of 57. 5 cannot longer be used to bridge the period until one’s pension. Another piece of legislation introduced in 2004 obliges unemployed people past the age of 57. 5 to look for work.
In 2004 a piece of legislation was introduced with the objective to motivating the employer to employ and retain older people by means of providing a premium dispensation. This research also focuses on this legislation and the revised legislation. In January 2009 the legislation was revised with the objective to making the regulation of the premium dispensation for older workers more effective. The premium dispensation changed into a premium discount. The financial size of the discount is made more visible and the premium discount is more specific by focusing on a specific group, namely the group of unemployed older people.
1.2.2. Objective of legislation
With the revised legislation the Government focuses on increasing the outflow of older people from the Unemployment Insurance Act (WW), the Act on Work and Income based on Work Capacity (WIA) and the Act on Work and Social Security (WWB) to regular work. The Government also aims at encouraging employers to employ older workers until the formal retirement age of 65.
be willing to work. This research also focuses on the effect of legislation from the perspective of the employer.
In addition this research finds whether the employer was informed about the former as well as the revised legislation. The research also addresses the question whether the legislation encourages the employer to employ older unemployed and/or retain older employees.
1.3. The scope of this study
The research area in this study is restricted to healthcare institutions. In this sector, not only does the labour supply decrease, but there is also an increased need for employees. Increase of labour demand is related to the ageing of the population; there is an increased need for elderly care. Healthcare institutions in this research are restricted to homes for the aged, nursing homes, hospitals and home care organisations since the interviewed healthcare institutions consist of these establishments. The case study method is used to find whether the healthcare institutions were informed about legislation that encourages the employer to employ and/or retain older workers and whether the legislation encouraged them to do so. An interview was constructed based on literature research. Four healthcare institutions participated in an interview. Chapter three elaborates on the research method and data analysis.
1.4. Research question and sub-questions
Based on the foregoing, the following research question can be formulated: Is the employer in
healthcare informed about the legislation introduced in 2004 and the revised legislation in 2009 with respect to encouraging the employer to employ and/or retain older workers and did the legislation encourage the employer to employ and/or retain older people?
The following sub-questions can be formulated:
- Is the employer informed about the former and the revised legislation? - How was the employer informed?
- Does the employer know the differences between the former and the revised legislation? - How does the employer look upon the revised legislation?
- Did the employer consciously use the premium dispensation in 2004 and/or the premium discount in 2009?
- How many older people are employed or retained based on the former and revised legislation? - Which of the two premium regulations encouraged the employer most in employing and/or retaining older employees?
1.4.1. Older workers
Older people are often positioned in the age between 55 and 65 (Kite, Smith & Wagner, 2004). In this research people between the ages of 50 to 64 are defined as older people since the age limits of 50 to 64 years are set by the legislature in the examined legislation.
1.4.2. The SLAP-model
With regard to this research the Strategic Labour Allocation Process model (SLAP-model) of Bax (2003) is used to get insight into the labour problem. The SLAP-model is developed as an instrument to map the balance between labour demand and labour supply. The model takes influences from the external environment, such as changes in legislation, into account. Not all the relations that are set in the model of Bax are involved in this research. This research focuses on the effect of introduced legislation on the HR strategy, labour supply and labour demand.
1.4.3. Research design
2 THEORY
The content of the former and the revised legislation follows in the paragraph below.
2.1. Former versus revised legislation
Under the conditions of the former legislation that dates from 2004, the employer received a premium dispensation with an average of € 1,500 for employing people past the age of 50 and retaining employees past the age of 54. 5. The amount of € 1,500 was a percentage of income and had a generic character. The regulation concerned all employees from a certain age, without a restriction to length.
In the revised legislation the employer receives a premium discount for employing an older unemployed person past the age of 50 and for retaining people past the age of 62. The age limit of 62 is related to the average age that people quit working which lies at 61.7 years in 2006 (Parliamentary paper 31 707, no 7). An age limit below 62 years will lead to dead weight loss: the money will be spend on older workers that would have kept working too without financial support. The height of the premium discount is € 6,500. This is a set amount. The period that the employer receives the premium discount is three years. The legislature takes for granted that the employer may fire the employee after the three year period of premium discount is over and employs another older unemployed person. In appendix A an overview of the differences between the former and the revised legislation is provided.
2.2. Reason to revising legislation
The decision to revising the legislation in 2009 is taken without an evaluation of the effects of the piece of legislation that dates from 2004. The motive to revising legislation was an underpinned assumption of the Second Chamber that the incentive of legislation from 2004 was insufficient. The decision to revising the legislation was taken based on an advice of the Commission Labour Participation that was called into life in January 2008 by the Ministry of Social Affairs. The Commission concluded that fundamental changes were about to come, like the earlier mentioned ageing of the population. The Commission concludes that the labour market for older people seems to be locked. The Commission noticed that the existing premium dispensation was not effective and expensive, since it did not just focus on employing, but also on retaining employees. The Commission recommended to making the premium dispensation for older workers more effective by providing a premium discount only to those employers that employ older unemployed people. The Government hereby supported the argumentation of the Commission Labour Participation.
2.3. The SLAP-model
For the purpose of this research the SLAP-model of Bax (2003) is used to assess the labour situation in healthcare institutions. This research is restricted to examining the relation between the external environment with the HR strategy, labour supply, and labour demand. The construction of the SLAP-model shows that these three variables are directly affected when changes in the external environment are carried through. Besides, these variables are directly related to the core of the SLAP-model in that they help balancing labour supply and labour demand. The relation between the external environment with the distinctive competences is thus not examined. With available literature the theory behind the SLAP-model and its application to the labour situation in healthcare institutions is described.
2.3.1. The SLAP-model
Aspects on various levels in the organization influence the organization of work (Bax, 2003). The idea of the model is that labour demand and labour supply are in balance. They are subject to changes in the external environment.
The SLAP-model consists of three levels: the strategic, the tactical and the operational level. On the strategic level decisions with regard to the HR strategy, the Business strategy and changes in the environment are taken. The HR strategy is developed on this level. The HR policy and the labour allocation process are developed on the tactical level. It is up to the HR manager to balance labour demand and labour supply. Difficulty is that organizations operate in an open system; organizations depend on what happens in the environment. It is important that the HR strategy takes developments in the environment into consideration. Besides, one needs to use the HR strategy to finding what developments from the external environment are useful for the labour allocation process in the long term. HR activities are developed on the operational level. These are developed within existing frameworks and policy. Figure 2 shows the SLAP-model.
FIGURE 2
The Strategic Labour Allocation Process-model (SLAP-model)
Source: Bax, 2003
The external environment The external environment can influence labour demand, labour supply
or both sides of the labour allocation process. How the external environment affects the labour allocation process does not only depend on the nature of the external factors, it also depends on production targets of an organization. A tight situation on the external labour market is for example more relevant for labour intensive production processes and less relevant for organizations that mainly work with machines (Bax, 2003).
HR strategy and Distinctive competences The HR strategy and the Distinctive competences
Labour demand and labour supply Labour demand is the demand for workers from the organization. Each type of work asks for a variety of tasks that need to be accomplished. The height of labour demand is a direct consequence of production targets that are set. Demand for work is quantitative and/or qualitative and it exists of replacement demand (replacement of personnel that leaves) and expansion demand (changes in the size of employment).
Labour supply may be described as the labour that workers offer to an organization. There is a distinction between the external and internal labour market. The external labour market exists of those persons who are not employed within the company. The internal labour market represents those people that are employed within the organization and that are available to switching jobs within the organization. There is also a distinction between quantitative and qualitative labour supply. The number of man hours that is necessary for production is defined as quantitative. Qualitative labour demand represents the type of man hours that is necessary (Bax, 2003).
It is up to the HR manager to matching labour supply and labour demand. There are three ways in which this match or balance can be found. Changes on part of labour supply can be carried through using HR instruments; changes on part of labour demand can be carried through by changing the construction of tasks, functions and roles; and changes on part of both labour demand and labour supply can be carried through.
HR instruments Characteristics of labour supply can be influenced with the HR
instruments recruiting, selection, training, rewarding and appraisal (Kluytmans in Bax, 2003). The candidate with the right skills, knowledge and experience can be selected using the right HR instruments. There should be coherence between these instruments.
Tasks, functions and roles Tasks, functions and roles are related to HR instruments. Together
with the HR instruments they help balance labour supply with labour demand. Intervention in tasks, functions and roles means intervening in the balance of power of an organization.
Quality of working life and working conditions The way in which work is organised
produces the working conditions. One may think of physical and social factors like work pressure, independence and team work (Smulders & Op de Weegh, 1995). Working conditions affect behaviour on the level of the individual employee, of which absenteeism is an example. It is a challenge for the organization to assigning the right tasks to employees and to keeping the employee satisfied.
Commitment, turnover and absenteeism Working conditions and the quality of
All the variables of the SLAP-model are dealt with in the previous paragraph. Legislation with the objective to encouraging the employer to employing and/or retaining older people is considered as the external environment in this research. This research is restricted to the effect of legislation on three variables of the SLAP-model; the HR strategy, labour supply and labour demand. The expected effect of legislation on these three variables is described below.
2.3.1.1. Legislation and the HR strategy
The HR department within an organization is amongst others responsible to detect changes in the environment of the organization and needs to assess the direct and long term consequences of these changes for the HR strategy and the HR policy. With respect to this research, one may expect an organization is reacting to introduction of legislation and the implications that introduction of legislation has on the HR strategy and policy. The organization needs to be informed about legislation in order to determine the importance and impact of legislation on the conduct of business. Information about this legislation is provided via the website of the Ministry of Social Affairs. Besides, the Government works together and provides information via trade organizations, Social Security Agency Employee Insurances (UWV)/Centre for Work and Income (CWI), Municipalities, and the tax department.
HR management also includes the development of policy. The healthcare organization needs to determine whether to make (conscious use) of the premium dispensation/discount. The HR strategy and HR policy may need to change in order to play into revised legislation.
2.3.1.2. Legislation and labour demand
Labour demand in healthcare is high. Increased need for employment within this sector is determined by external factors, like the ageing of the population and increased life expectancy. More people will need care and the period that care is needed is longer. Labour demand will increase with 480,000 fulltime employees until the year 2020 when the developments of the past few years continue (Van der Windt Arnold & Keulen, 2007). The introduced legislation that focuses on increasing labour participation of older workers will not decrease the size for the demand of labour, since the need for care and related employment will not decrease. A challenge of the healthcare sector is that the number of working older people is traditionally high (Van Der Windt et al, 2007). Older employees leave the labour market and the effect of outflow of older people is thus big. In the short term this means that labour demand will increase due to a relatively high number of older people that leave the healthcare institution. Introduced legislation does encourage the employer to retaining older personnel. In this respect it is possible that the employer thinks of changing related tasks, functions and roles to enlighten the work.
2.3.1.3. Legislation and labour supply
Growing labour supply keeps behind with growing labour demand in healthcare institutions. The increase of labour supply until the year 2020 is stuck at 250,000 fulltime employees whereas the increase in labour demand lies at 480,000 employees. Research of Regiomarge (Van Der Windt et al, 2007) identified a few developments that affect labour supply in healthcare:
- Fewer students choose for an education in care (VMBO-tI);
- In the previous period of economic boom a substantial number of returnees got to work. This source is almost exhausted;
- The number of older workers in healthcare is traditionally high; the effect of older workers that leave the labour market is thus big;
- The Government, social partners, employees and the healthcare institutions invested in decreasing the physical and mental intensity of working in healthcare. Fewer people quit working because of illness or disability. Further decrease will be hard to realize;
- A person that works in healthcare is dedicated to his/her work. Research shows that it is often the physical and mental intensity of the work that makes people decide to quit working early. Biennial research of the General Association of nurses and attendants (AVVV), the National Expertise Centre for Nursing and Care (LEVV), and the National institute for research of healthcare (NIVEL) amongst nurses and attendants shows that their profession can be made more attractive when the appreciation of their work increases (De Veer, Poortvliet, Vogel & Francke, 2007). Ways to making the work more attractive are refresher courses, extra training, and decreased work pressure.
The introduction of legislation that should encourage the employer to employing and/or retaining older workers does not affect the size of labour supply. This piece of legislation does not focus on balancing labour supply and labour demand as initiated by Bax in the SLAP-model. It primarily focuses on labour demand via retaining older personnel and employing older people. Other legislation outside the scope of this research can affect the size of labour supply. One may think of a bonus that an employee receives when he/she works past the age of 62. This encourages the employee to working longer and thus increases the size of labour supply. Another example is the intention of the Government to increasing the age to retire to 67 years in the year 2025. This also increases the size of labour supply. With reference to this research labour supply can be seen as the independent variable. It is, presuming that the examined legislation is looked upon as the external environment, not affected by one of the variables in the model. This research will not elaborate on this finding. The external environment may thus be divided into ‘legislation’ that may affect the size and composition of labour supply and ‘legislation that should encourage the employer to employing and/or retaining older people’ that does not affect the size and composition of labour supply.
dispensation/discount for employing that group of people. Older people on their turn gain experience by being employed.
FIGURE 3
The SLAP-model adapted to the employment situation in healthcare institutions
The Government expects that employers will use the premium discount to employing and/or retaining (more) older people. On the strategic level it is important to informing healthcare institutions about legislation and to encourage the healthcare institutions to using legislation. Legislation will ceteris paribus have its effect on the tactical level. During the selection procedure, labour demand may change; focus can be shifted towards older people. Legislation will not change the size of labour demand. On the operational level legislation does not have a direct effect. The healthcare institutions do need to bear in mind when employing (more) older people, that older people are more vulnerable for long term absenteeism for example (Nauta, Bruin & Cremer, 2004). Figure 3 shows the SLAP-model that is adapted to the situation in healthcare.
HR strategy healthcare organizations - HR policy for older employees
- Organization appeals to available subsidy schemes - Necessary adjustments within organization - Knowledge amongst those concerned with the legislation and know-how of consequences
- Inform concerned target groups
Tasks Simplification Functions Enlighten function. Physically and mentally less intensive Roles More advising, coordinating, counselling Recruiting
Focus on older employees
Selection
Preference for older people
Training
Keep up-to-date Re-schooling
Appraisal
Adjust function standards
Rewarding
Premiums or facilities, less working hours
Labour demand
Double ageing of the population
Population is ageing, life expectancy increases: demand for care is higher and longer.
Difficulties:
Older employees leave the labour market:
- Physically and mentally intensive work in healthcare.
- Number of older people working in healthcare traditionally high. Effect of outflow older people thus big.
- Labour supply young people relatively low. Interest for working in healthcare is low.
Quality working life Conditions
Adjusted work place employment
Scheduling
Commitment - Turnover - Absenteeism
Distinctive competences/ Business strategy
Labour supply and
legislation
The size of labour supply is affected by legislation like the bonus provided to the employee that works past the age of 62 and the obligation to work until the age of 67 (outside the scope of this research).
Labour supply and the
former- and revised
legislation
The size of labour supply is not affected by legislation that encourages the employer to employing and/or retaining older people. The size of the working population (potential supply of labour) keeps being the same.
Legislation
The former legislation of 2004 and revised version of 2009
3 RESEARCH METHOD
Scientific research may be carried out in various ways of which the distinction between qualitative and quantitative is the most important. This research chooses the qualitative approach. An important characteristic of qualitative research is the use of various data sources and it underlines the importance of understanding individual persons or groups and situations (Baarda, De Goede & Teunissen, 2005).
3.1. Case-study
In this research the case-study method is used. A case-study is used in situations when a ‘how’ or ‘why’ question is asked about a contemporary set of events, when an investigator has no or little control and when the research examines a real life case (Yin, 1984). The case-study approach is especially suitable when actual behaviour or products are being examined (Baarda et al, 2005). The term case-study is not only used when one case is being studied. A case study may examine a restricted number of cases; four or five cases are rarely exceeded (Swanborn, 2000). Four healthcare institutions participated in this research. The researcher needed detailed information about past actions, and changes in behaviour and attitude of the interviewees as result of introduction of a piece of legislation. The information that was needed dates back to 2004 when the former legislation was introduced. Qualitative research gets insight into social phenomena. The case-study may in this case explain causal links in real life interventions that are too complex for a survey or an experimental study. Yin (1984) names this as one of the reasons to choose for a case-study approach. Via retrospection the researcher wants to discover what changes took place within healthcare institutions as a result of introduction of legislation and how these changes were fit into the company structure.
3.1.1. Data collection
The interviews were kept with the HR manager or HR advisor of the participating healthcare institution. These people are expected to be informed about labour law and its practical implications. The HR manager of the healthcare institution was contacted via a letter in which the aim and context of the research was given. The HR manager was contacted within a week after the letter was send and asked to participate and to set an interview date. One third of the contacted healthcare institutions reacted positive and participated. Main reasons for the healthcare institutions not to participate were reorganization, holidays, and the interview taking too much time. The four interviews were kept in Dutch and were both written down as well as recorded. The hand-written notes were transcribed into the PC. The interview that was worked out was sent to the interviewee in order to check whether the answers were correctly interpreted. In each case the interview was held with one person. The interview lasted between 55 to 90 minutes. An overview of the interview questions is provided in Appendix C.
The theoretical framework was the basis for the design of the interview. The interview consisted of the following topics: the employment problem within healthcare, personnel policy, recruitment and selection procedure, turnover, culture and legislation. In this research a semi-structured interview is used to collect information. The semi- semi-structured interview deals with questions that are set up beforehand. This enables data to be compared (Bowling, 2002). This type of interview also enables to getting more into detail into some subjects and answers (Yin, 1984). The interviewer is able to change the sequence of questions in order to recess on stories and answers that the interviewee gives (Kvale, 1996). Some additional open questions were posed, mainly to ask for examples. Disadvantage of taking interviews is that the conclusions may not be generalized.
3.2. Data analysis
The interview results are compressed in order to give a clear, understandable overview of the research results. The cases will be analysed by using a few predetermined variables that were determined by the researcher. A categorization method of Kvale (1996) is used to categorise the interview passages. The categories can be developed in advance of the interview or during the analysis of the interview (Kvale, 1996). The seven chosen variables are legislation, labour supply, policy to retaining personnel, outflow of personnel, personnel file, cultural aspects, and solution of the employment problem according to the healthcare institution. The chosen categories are determined via the analysis of the SLAP-model, and via the interviewers’ own idiom. The interview passages were translated into shorter statements to get a clear and structured overview of available data. Each interview question was classified per variable. The next paragraphs contain an explanation of the chosen variables.
3.2.1. Variables
like recruiting and selection may be modified to live up to the consequences of the introduction of legislation. For the purpose of this research seven variables are used to analyse the interview data. These variables are all directly and indirectly related to the introduction of legislation. Each variable will pass review in the paragraph below.
Legislation The Government commits money to encouraging the employer to employing and/or
retaining older workers and to improve the labour position of older workers. This variable shows whether the employer was informed about legislation, what the employer thinks of the changes between the former and the revised legislation and whether legislation encouraged the employer to employing and/or retaining (more) older workers. Interview questions like ‘Were you informed about
the legislation in 2004 and 2009?’, ‘Have you received a premium dispensation/premium discount for employing older people?’, ‘Can you name the differences between the former and the revised legislation?’, and ‘Did the former/revised legislation encourage you to employing and/or retaining (more) older workers?’ are dealt with.
Labour supply Earlier research findings show that labour supply in healthcare stays behind
due to the ageing of the population and fewer younger people being available to work. Potential workers in healthcare are people leaving school, returnees and people that potentially switch jobs (Van Der Windt et al, 2007). The size of labour supply will keep being the same with the introduction of the examined legislation. This variable analyses the size of the labour problem and expected future implications related to labour supply. Interview questions like ‘Do you expect the employment problem
to becoming bigger?’, ‘How many older workers have you employed since January 2009?’, and ‘Do you have an age conscious recruitment policy?’ are dealt with.
Policy to retain older personnel The physical and mental intensity of the work decreased,
because of investments of the Government and social partners. The intensity of the work amongst older workers may decrease via simplification of tasks or assigning other tasks like coordinating tasks. This variable is indirectly related to introduction of legislation. Are there general agreements that focus on working older people and what action does the organization undertake to retaining older personnel? This is important since the supposition of the Government is that older people are employed via subsidy schemes. Interview questions like ‘Is your personnel policy focused on
increasing the number of people past the age of 50?’, and ‘Which activities does your organization unfold to retaining qualified and experienced older personnel?’ are dealt with.
This variable is indirectly related to introduction of legislation. May the employment problem be tackled by focusing on diminishing voluntary leave? Interview questions like ‘Do you have exit
interviews?’ and ‘How many employees voluntarily leave your organization on a yearly basis?’ are dealt with.
Personnel file Older employees are amongst others looked upon as less productive, less
innovative, less motivated and in general as less suitable employees (El Marini & Vos, 2007; Remery Henkens, Schippers & Ekamper, 2001). In most organizations age categories are equally represented. The personnel file in healthcare faces a problem of ageing and too few available young workers and is out of balance. The objective of legislation is to motivating the employer to employing and/or retaining (more) older workers. Interview questions like ‘What is the average age that people quit
working?’ and ‘What are the (dis) advantages of older employees?’ are dealt with.
Cultural aspects – older employees Introduction of legislation affects the age profile of
healthcare institutions. Older people are expected to be employed more often. What tasks will these older workers execute when they get older and the work gets too intensive? Interview questions like
‘What role do (dis) advantages about older people play in the recruitment process?’ are dealt with.
Solution according to healthcare institution The Government looks upon the revised
legislation as part of the solution to the employment problem. What is the solution to the employment problem according to healthcare institutions? Interview questions like ‘Are you an advocate of
4 RESULTS
It needs to be said that when the number of working older people has increased since 2004 it is not necessarily caused by the introduction of the examined legislation. Since 2004 other legislation has been introduced such as the ‘law for equal treatment’ and the ‘obligation to apply for work when a person past the age of 57. 5 is unemployed’. These regulations too could have had a positive impact on the number of employed older people. The results of the four individual cases are summarized using the seven variables. These abbreviated results are shown in the paragraph below.
Legislation
Legislation 2004 Three healthcare institutions remember to be informed about the legislation in
2004. One healthcare institution does not remember whether it was informed about the legislation. The information was provided via the salary administration, Actiz (trade organization healthcare), and professional journals. All four healthcare institutions received subsidy for employing and retaining older people, but none of them knows how many times. The healthcare institutions do not have figures, because they are of the opinion that it is ‘nice to receive’ the subsidy; they are not focused on receiving the subsidy. Three healthcare institutions are of the opinion that the former legislation did not encourage them to employing and/or retaining older people. It might have worked in smaller organizations according to two healthcare institutions. The amount of money that the healthcare institutions receive is not encouraging enough. One healthcare institution cannot say whether the legislation worked effective. They made use of it, but they did not change their personnel policy. All four healthcare institutions would have employed older people when they would not have received a subsidy. The four healthcare institutions look at the vacancy, requirements, and the suitability of the person that applies in general.
Legislation 2009 Three healthcare institutions were informed about the revised legislation via a newsletter, trade organization Actiz or the salary administration. The three interviewees know the legislation broadly outlined. One healthcare institution does not know about the revised legislation since the organization does not focus on receiving subsidy for employing certain people. Three out of four healthcare institutions share the opinion that the newest legislation will not encourage them to employing older people. One healthcare institution thinks that it helps a little to employ older people. No changes had to be put through for the introduction of the legislation. None of the four healthcare institutions is afraid that an older employee gets fired when the three year period of premium discount ends.
Comparison former and revised legislation One healthcare institution was not informed
healthcare institution about the revised legislation. Another interviewee could not name a difference between the former and revised legislation. The other two interviewees could name at least one difference with the former legislation. The premium discount is now provided to the employer when he/she retains a person past the age of 62. This was 54. 5 years. Three healthcare institutions are neutral about this change. One healthcare institution is of the opinion that this is a negative change. The employer should be encouraged to employing the entire group. The premium discount is now provided when the person past the age of 50 that is employed is unemployed beforehand. Two healthcare institutions are neutral about this change. These two healthcare institutions say that this premium discount for unemployed people past the age of 50 is interesting for the employee itself, since they have an advantage over other candidates that already have a job. Two healthcare institutions are negative since the group of potential workers gets smaller. Three healthcare institutions prefer the former legislation over the revised legislation. The former legislation is more consistent and a larger target group is reached. One healthcare institution chooses the revised legislation since the period of receiving the discount is clearer and it is easier to persuading management with the higher subsidy. All healthcare institutions react neutral to the question what legislation encourages them more in employing and/or retaining older people. Both legislations are not encouraging enough and the focus and policy of the healthcare institutions have not changed because of the legislation.
Labour supply Four healthcare institutions agree that the employment problem will become
bigger in the nearby future. The ageing of the population is seen as the main cause of the employment problem. Four healthcare institutions indicate that there are also too few people educated to working in healthcare. This finding is equal to findings in literature (Van Der Windt et al, 2007) which identifies a few trends in healthcare of which an ageing personnel file and fewer people following an education in care are examples.
None of the four healthcare institutions has an age conscious recruitment policy. During the recruitment procedure no difference is made between young and old people. One healthcare institution says that choosing an older applicant over a younger applicant because of age is in fact positive discrimination. This is not allowed. None of the healthcare institutions specifically recruits older people. Four healthcare institutions look at the most suitable candidate. None of the four healthcare institutions has specific activities to finding qualified older personnel. Two healthcare institutions are neutral about retraining people. Two healthcare institutions encourage retraining to getting people to working in healthcare. The training budget is equal for young and old employees in all healthcare institutions. The advantages and disadvantages that exist about older workers do not influence the decision to employing older workers according to all four healthcare institutions.
that are employed. One of the healthcare institutions does have a policy that focuses on the various stages in life in which it differentiates between policies related to the stage of life in which the employee is in. The other three healthcare institutions do not have specific policy on increasing the number of older workers. They do look at their personnel file and balance their age profile to equally represent each age profile and guarantee continuity for the future.
None of the four healthcare institutions undertake specific action to increasing the participation level of older workers. One healthcare institution does not agree with the idea of having different policies for different age groups and is of the opinion that the policy should be equal for both young and old. One healthcare institution executed research amongst people past the age of 50, but says that there are no specific measurements that will commit older workers to stay. All healthcare institutions introduce trainings and instructions to simplifying and enlightening the work. All four healthcare institutions take measurements to retaining people on the individual level. This may for example be done by making changes to time schedules. One of these healthcare institutions does note that the working conditions service (ARBO) first needs to assess the situation before changes are carried through. Lately some changes have been put through in the Collective agreement for nursing-homes, homes for the aged and home care organisations (CAO VVT). People past the age of 55 may not refuse to working particular shifts for example. The height of extra leave has decreased too. One healthcare institution says that young employees do not accept that older people have other, more favourable labour conditions.
Outflow of personnel Three of the healthcare institutions have a few vacancies that are hard
to fulfil. Three healthcare institutions do have exit interviews. Little information is gained via the exit interview says one healthcare institution. This healthcare institution prefers getting its information from employee satisfaction surveys. These surveys tell this healthcare institution that people leave because of work elsewhere or not being able to deal with the work. One other healthcare institution says that 80% of the people that leave the healthcare institution get work in another healthcare institution. Only 10% leaves the healthcare sector. The healthcare institution that does not have exit interviews gets its information amongst others from resignation letters. Employees leave because of early pension or work elsewhere. One healthcare institution says that it is hard to discover a trend. There is not one specific reason that makes people leave. It is thus hard to design a policy to reduce voluntary leave says one healthcare institution.
Personnel file Literature shows that the average age on which people leave the labour market
disadvantages that exist about older employees. One healthcare institution does not see disadvantages. Another healthcare institution is of the opinion that an older employee is more vulnerable. The intensity of the work may cause outflow. One healthcare institution is of the opinion that some older workers are less flexible. Besides, older workers have more free hours and it costs money to replace these older people during those hours of extra leave. One healthcare institution shares the opinion that some of its older workers are less flexible and have physical problems more easily.
Cultural aspects – older employees The image of older workers is good in all four healthcare
institutions. There is no difference made between young and old employees. The older employee may work as a mentor or may fulfil an educational task. Older employees are experienced; they have know-how and are dedicated to the work.
Solution according to healthcare institution All four healthcare institutions are positive about the
5 CONCLUSIONS
This research tried to find an answer to the question whether the employer in healthcare is informed about the piece of legislation introduced in 2004 and the revised legislation in 2009 with respect to encouraging the employer to employing and/or retaining older workers. Four healthcare institutions participated in an interview that covers this research area. The results allow the conclusion that the healthcare institutions were informed about the legislation. Neither the former nor the revised legislation worked encouraging to employing and/or retaining older employees according to the healthcare institutions. Underlying reason for the revised legislation not to be encouraging is the fact that the Government neglected to examine important aspects, such as an evaluation of the former legislation, beforehand. The Government did not find whether the former legislation worked effective in increasing the number of working older people and did not discover the underlying cause for (mal) functioning of the former legislation. As a result legislation with insufficient attention to the needs from the work field was introduced. The healthcare institutions for instance do not face labour shortages at the moment; they would have employed older people without receiving a financial incentive and are of the opinion that governmental money could have been spent more effective.
Objectives of the Government
The revised legislation did not have the effect that the Government had in mind. First of all the legislation did not encourage healthcare institutions to enlarging the share of older workers in their personnel file. It needs to be said that this research just focused on the examined legislation and its relation to the number of older people in employment. Healthcare institutions could have had other reasons not to employ older people which are out of the scope of this research. The ambition to solving the personnel problem by encouraging the employer to employing older people in healthcare is not realized. Another ambition of the Government, namely replacing an ineffective, thus expensive legislation with a less expensive legislation is achieved. Unfortunately, this legislation again is attended with disappointing results with respect to labour participation. It is thus an interesting question how the Government was able to introduce another regulation that misses aim. This research does not fully answer this question since the construction of this research is written from the perspective of the employer and is limited to the healthcare sector.
Encouraging role of the legislation
on a moment that there is not some talk of presumable labour shortages. The Government overlooked that organizations with an aim of providing care, primarily focus on this aim. Moreover, the interviewees put forward the following:
- Money is an insufficient incentive to adapt policy to governmental aims;
- The Government comes out with a legislation that enables positive discrimination. One may suppose that the legislator does not have had the intention to do so;
- The assumption that older applicants need extra attention in order to finding work in healthcare seems false according to the interviewees. The healthcare institutions do not have a negative judgment about the performance and motivation of older workers. Healthcare institutions encourage employing older workers since older people have (life) experience and know-how. The employer in healthcare is positive about employing older people until the age of 65, at least, when older people can fulfil a mentoring or coaching role. Older workers need to be spared from heavy work.
Nevertheless, the question remains why healthcare institutions that operate in the core of society, have not discerned their social role and serve as a model and grant the request of the Government to look at the role that older workers can play in their personnel problem.
Solution to the employment problem according to healthcare institutions
The subsidy as it currently exists is not the solution to the employment problem according to the participating healthcare institutions. The employer in healthcare looks upon the employment problem from another perspective:
- The focus should not just lie on older workers, but on the total mix of young and old, in which older people and young employees fulfil a specific role;
- Keep older people in employment by enlightening their work; - Attract young people that take over tasks from older people;
- The image, the dull and the physically and mentally intensive character of working in healthcare, needs to change. This would encourage the participation of young and old employees and it enables to mixing complementary competences of young and old;
- Healthcare is positive about retraining people that come from other professional groups; - Healthcare is positive about giving extra training to people that re-enter the labour market.
6 DISCUSSION
Limitations
The limitations of this research are mentioned in the paragraphs below.
Area of interest - healthcare institutions This research finds that the researched legislation is not consciously used within healthcare institutions. This does not tell whether or not the legislation works encouraging in other professional groups. It may well be that the legislation and its related financial incentive does prove to be effective within other sectors. Labour conditions and future labour perspectives for example may differ.
Representativeness Four healthcare institutions participated in this research. Although this is a limited number of respondents, the four healthcare institutions shared the opinion that the examined legislation was not encouraging to employing and/or retaining older employees. Apart from the number of interviewed healthcare institutions and the geographic location of these institutions, the results of the interviews in general may not be generalized and the basis for scientific generalization is little (Yin, 1984). The healthcare institutions that were interviewed are located in the Northern part of the Netherlands. This means that the employment problem and the extent to which the employer was informed and encouraged to employing and/or retaining older workers in other parts of the Netherlands have not been examined. Research of Regiomarge (Van Der Windt, Arnold & Smeets, 2008) finds that the labour situation differs significantly per region. Labour supply in healthcare in the region of Zwolle will increase with 5% whereas labour supply in ‘het Gooi’ will decrease with 7% in the next ten years. Personnel shortages in 2012 are expected to be the largest in Utrecht, Amsterdam, Haaglanden, Rijnstreek and Kennemerland. Fringes face limited problems (Van Der Windt et al, 2008). The outcome of a similar research in another region could have provided other research results since the employment situation differs per region.
Research method The research method can be seen as a limitation as well. More participants would have been heard and the results would have been easier to generalize when a quantitative research method, like a questionnaire, had been used.
whereas qualitative research could for example have examined why legislation worked encouraging. The interview could have been shortened and could focus on a specific phenomenon in the research area. An advantage of using a quantitative research method is the fact that a larger group of respondents is reached; research results have more value and may be generalized. If a quantitative research method was used information was also gathered via HR managers of various healthcare institutions.
Data healthcare institutions A few interview questions related to organizational figures appeared to be hard to answer. It was difficult for the healthcare institutions to come up with data that fit the age categories that were determined by the researcher in advance of the research. Finding related figures took too much of the organization’s time. The usefulness of these questions is therefore minimal since the figures cannot be compared and related to the encouraging role of the legislation. These figures are not taken into consideration in this research.
Financial crisis and effects on labour market During the execution of this research the financial crisis hit the world’s economy. Still, on a daily basis consequences of the credit crisis are brought to light and it is unknown when the economic crisis will end. Unemployment figures rise until the year 2010 to up to 8% of the working population, which comes down to 615,000 people (CPB, 2009) and consumer confidence decreases. It is unknown to what extent the financial crisis hurt the labour market in healthcare since the need for care will logically not decrease during recession. The recession may perhaps offer opportunities; unemployed people may think of changing profession and start a new career in healthcare. One can imagine that the impact of the financial crisis and the movements on the labour market as a result are hard to predict and it is too soon to pass judgements on the impact of these developments. Numbers and forecasts change on a daily basis. Numbers that are used in this research date from July 2009 the latest.
Theoretical implications
life experience and know-how. The starting point of older people on the labour market in the healthcare sector according to this research is good. Perhaps it is the positive image that older employees already have in healthcare institutions that makes this legislation superfluous. Literature shows that older employees are sick less often; absenteeism is longer (Nauta et al, 2004).
Future research
The size of this research is limited to four cases. This same research may be executed on a larger scale. Not just the basis for scientific generalization of the research results will be larger; the variety of participating healthcare institutions may cause the research results to be different. Mentioned earlier, the employment problem differs per region and executing research in various regions may have other implications on the motivating role of the legislation.
This research finds that the employer does not consciously use the premium discount. The unemployed person, according to at least one healthcare institution, looks upon the provided discount as an advantage and tried to persuade the employer to employing him/her by mentioning the fact that the employer receives a subsidy when employing him/her. Communication about the existence of the legislation is currently executed via the employer. One interviewee did not know about the revised legislation. The legislation might have worked more encouraging when the applicant would have told the employer about the legislation in that specific case. Future research may find whether the legislation works more motivating when it’s communicated via the (unemployed) employee.
This research finds that none of the healthcare institutions that took part in this research has an age conscious policy. Literature, mentioned earlier (Van Der Windt et al, 2008), finds that both the ageing of the population and fewer younger people due to a decreased birth-rate bring along challenges in finding enough personnel in the nearby future in healthcare. One would expect that the healthcare institutions are aware of this challenge and find ways to preventing the employment problem of becoming bigger. An age conscious policy may help them to identifying future problem areas and help them to balancing the age profile of their institution. Future research may find on what scale healthcare institutions have an age conscious policy and the reason as to why these healthcare institutions (do not) have such an age conscious policy.
EPILOGUE
The legislation aimed at increasing labour participation of older people seems to have overshot the mark in the healthcare sector. Having known just the information that derives from this research would probably have encouraged the Government to put on other, more encouraging, changes to the construction of the legislation. Question is whether legislation is the only way of diminishing the current labour problem in healthcare. This research finds that introducing legislation may be a too complicated and inflexible way to tackling the labour problem in healthcare. The healthcare institutions have concrete suggestions to diminishing labour shortages. The healthcare sector needs to be made more attractive for potential workers and the lay-out of work processes need to change. More attention needs to be given to changing schedules on specific qualities, experience, education, training and ARBO regulations. This may at least help to decreasing work pressure. If the Government decides to keep tackling the employment problem the hard way, by introducing new legislation, the advice would be to match the needs and objectives of the Government with the needs and judgment of people from the work field.
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APPENDIX A
Overview differences former versus revised legislation ‘Former’ legislation
Introduced on the 1st of January 2004
‘Revised’ legislation
Introduced on the 1st of January 2009 Generic character – for employees in employment
past the age of 50
Employing people past the age of 50 drawing benefits
Employing people past the age of 50 and retaining people past the age of 54.5
Employing employees past the age of 50 drawing benefits and retaining people past the age of 62
No restriction to length Maximum of three years
On average € 1,500 per employee per year € 6,500 per employee per year
Premium dispensation Premium discount
Height dispensation is equal to percentage of wage Height discount is a set amount Employer receives a premium dispensation when
employing a person past the age of 50 that voluntarily switched jobs
Employer does not receive a premium discount when he/she employs a person past the age of 50 that voluntarily switched jobs
Concerns a set amount based on a 36-hour working week
Height of the premium discount does not exceed the premium that the employer needs to hand over
APPENDIX B
Case study participants
Case 1 Healthcare institution A
Institution A has two holdings and six BV’s (Ltd’s). It focuses on inhabitants in North-East Friesland. Over 1600 people are in employment by institution A. Institution A has one hospital, two nursing homes, three homes for the aged and two community care centres.
Case 2 Healthcare institution B
The number of community service and care centres of institution B comes down to eight. These are located in Friesland. Institution B employs 550 people and has over 400 volunteers.
Case 3 Healthcare institution C
Institution C provides home care, community service, and exists of nursing and care. Institution C has various community care centres in North-West Friesland. Institution C employs over 1500 people and another 500 volunteers. Institution C has various apartments, sheltered accommodations, seniority houses, nursing homes, homes for the aged, and one hospice.
Case 4 Healthcare institution D
APPENDIX C Interview questions General questions
1. What is your profession?
2. For what period are you in this profession?
3. For what period are you in this profession within this organization?
4. a) How many fulltime and part-time caring/nursing personnel in the age categories as defined
below was in employment on the 31st of December 2003?
Fulltime Part-time Total Temporary
Permanent Temporary Permanent Temporary
< 25 25 – 49 50 – 54 55 – 61 62 – 64 > 65
b) What criteria were at that time decisive in your choice between permanent or temporary personnel?
5. How many fulltime and part-time caring/nursing personnel in the age categories as defined below was in employment on the 31st of December 2008?
Fulltime Part-time Total Temporary
Permanent Temporary Permanent Temporary
< 25 25 – 49 50 – 54 55 – 61 62 – 64 > 65
6. a) What criteria are at this moment decisive in your choice between permanent or temporary personnel?
b) Who would you employ when you had the choice between employing a young temporary
worker or an older person that receives a permanent contract?
Young temporary worker O Why?
