Does Delayed Retirement Mean Fewer Jobs for the Youth?

By Natanya Rutstein

South Africa continues to be plagued by the crisis of youth unemployment which has averaged at 51.91 percent from 2013 until 2017, reaching an all-time high of 55.90 percent in the second quarter of 2017 ( The unemployment of our youth is a complex systemic issue, the causes of which have been attributed to numerous social, educational and community issues.

The reality of increased longevity and a globally ageing population is also looming in South Africa with 8% of the total population aged 60 or older. This percentage will continue to rise as life expectancy increases. An ageing workforce going into retirement will no doubt increase the already overwhelming burden placed on the South African government to provide for these elderly citizens who are largely reliant on the government for pensions and various other social grants (Source: South Africa needs to be creative to avoid falling off the retirement cliff,

Raising the retirement age

Raising the retirement age to over 65 would undoubtedly help ease the state pension burden as well as potentially address the skills shortage which is compounded by the loss of skills when employees retire. However, keeping older employees working for longer may add to the burden of youth unemployment. Economists however argue that employment of the elderly does not deprive the youth of jobs.

They argue that there is not a finite amount of jobs in the economy (lump of labour theory) and by ensuring the continued income of the elderly, this will increase their spending power as opposed to rendering them dependant on the state. This in turn will stimulate economic growth which will ultimately create more jobs available for the youth to fill (Source: The Fallacy of the Lump of Labour: Adding to the Costs of Ageism,

Solutions to consider

The debate of increasing the retirement age is a complex issue with no quick fixes or simple solutions. So, what can your organisation do to guard against the loss of critical knowledge when your employees retire whist simultaneously freeing up jobs for the youth and creating alternative employment   opportunities for your elder workers? Two suggestions often put forward are:

  • Phased-in retirement, whereby you could keep on employees for longer but as contractors or part-time workers but without full-time benefits, and
  • Mentorship programmes – by implementing mentorship programmes you would ensure for the transfer of valuable institutional knowledge and skills to your younger employees. This could be either a career change for an older employee or a part-time work opportunity. Either way both young and old would benefit. (Source: South Africa needs to be creative to avoid falling off the retirement cliff,

Don’t forget your social responsibility

These are all complex issues which need to be considered and form part of your talent management strategy for the future. As a socially responsible company, the realities of employment in South Africa should not be ignored but neither should the future of your ageing employees.

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