Delaying retirement boost for the economy: 28 billion euros potential per year for Germany

Press release

Delaying retirement boost for the economy: 28 billion euros potential per year for Germany

• The Stepstone Group calculation: Voluntarily continuing to work beyond retirement age could result in up to 570,000 more people working every year from 2030 to 2035
• Study: Around 39 percent of 55-year-olds and older want to work beyond retirement age
• On average, they voluntarily want to stay in work four years longer and work 24 hours a week

DUESSELDORF, September 10, 2024 – Whether for the love of the job, the desire to socialize with colleagues or to top up their existing pension: if all those workers who will reach retirement age by 2035 want to continue working according past retirement, the result could see the German labor market retain around 570,000 more people every year from 2030 to 2035. The economic upshot being that Germany could generate up to as much as 28 billion euros in additional economic output per year. This is the result of a calculation by the digital recruiting platform The Stepstone Group*.

Around 39 percent of people aged 55 and over are actively considering working beyond retirement age. A further 34 percent would be open to this in principle - if their employer created the right conditions. This was the result of a representative Stepstone study of more than 6,000 respondents, including around 1,700 people aged 55 and over. The top reasons for staying in the job are therefore Enjoyment of work (75 percent), financial security (61 percent), intellectual stimulation (60 percent) and social contacts (57 percent).

‘The fact that so many people would work longer than planned out of their own interest is excellent news for the German labor market,’ says Dr Tobias Zimmermann, labor market expert at The Stepstone Group. According to official figures, more people are likely to leave the labor market in 2030 due to demographic change than will enter it**. As a result, there could be a shortage of up to seven million*** workers as early as 2035. ‘Due to the lack of workers, we are dependent on every single person in the German economy in order to remain productive and maintain prosperity,’ emphasizes Zimmermann.

Voluntary continued work in old age ignites German economic turbo

However, the conditions must be right for delaying retirement: People aged 55 and over would prefer to work an average of 24 hours per week. In addition to flexible working hours (65 percent), the majority want financial incentives such as bonuses or pension allowances (55 percent) and flexible retirement, e.g. through part-time work or job sharing (45 percent), to be able to work beyond retirement age. Recognition of performance in the form of regular feedback and appreciation (42 percent) and health support (30 percent) are also in demand among older employees. One in four people would like to receive additional training opportunities in old age in order to remain attractive for the labor market.

‘If we manage to motivate and support precisely these workers so that they find the right framework conditions in the company, this will pay off in the long term for both companies and older employees. And the economy will benefit from this,’ says Zimmermann.

About the study

The study ‘The Age Advantage: Recruiting without age limits’ sheds light on the experiences and obstacles of age discrimination across all phases of the recruitment process. Data was collected from 6,254 candidates and 725 recruiters between 25 and 31 July 2024 as part of an online survey. The data set was weighted using the microcensus and is representative of the German labor force in terms of age, gender and education. In addition, 140,000 CVs on Stepstone were analyzed to assess prejudices against older applicants.

More information about the survey here.

*About the calculation

The following gender-specific parameters from the study ‘The Age Advantage: Recruiting without age limits’ for people born between 1960 and 1968 were used for the calculation:

(a) the desire to continue working after the normal retirement age of 67,

b) the preferred working hours per week, and

c) the duration of employment (years) after the normal retirement age, whereby outliers (lowest and highest 5% percentile) were excluded.

In addition, the number of employees subject to social insurance contributions in these cohorts was taken into account based on data from the Federal Employment Agency. Based on the calculated parameters for this cohort, the employment potential for the years 2030 to 2035 could increase by an average of up to 570,000 full-time employees (measured in full-time equivalents) per year. This could lead to an additional economic potential of up to 28.3 billion euros, based on the gender-specific median salary for people with more than 25 years of work experience. This would correspond to a potential increase in German GDP of up to 0.7 per cent per year on average, based on 2023 GDP. This calculation is an extrapolation and does not take into account alternative retirement models or factors such as inflation, salary increases and other relevant influences (e.g. demand on the labour market). It should also be noted that the parameters may vary depending on the occupational group and sector.

** https://www.destatis.de/DE/Presse/Pressemitteilungen/2020/11/PD20_436_12411.html

*** https://iab.de/presseinfo/nur-mit-einer-jaehrlichen-nettozuwanderung-von-400-000-personen-bleibt-das-arbeitskraefteangebot-langfristig-konstant/

About The Stepstone Group 
The Stepstone Group is a leading global digital recruitment platform that connects companies with the right talent and helps people find the right job. AI-driven job marketplaces and programmatic-powered marketing solutions connect more than 130 million job applications with around 140,000 employers every year. In 2023, The Stepstone Group generated revenue of around €1 billion. The Stepstone Group operates in more than 30 countries - including Stepstone in Germany, Appcast in the USA and Totaljobs in the UK. The company is headquartered in Düsseldorf, Germany and employs around 4,000 people worldwide. For more information: www.thestepstonegroup.com/en/

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