Age-Inclusive Workplaces: 3 Lessons from Iceland.

Jane Horan
5 min readMay 29, 2023

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Being active in the workplace is highly valued among older Icelanders with the result that Icelandic employers hire more older people than anywhere else in the world. What can other countries learn from this?

Compared to other developed nations, Iceland has an extremely high rate of older people in the workforce.

Some 84% of the 55–64 age range are employed in Iceland, according to the latest PwC Golden Age Index. The Index assesses the impact of hiring older workers on different aspects of a country’s labor market, including employment, earnings, the gender gap and participation in training.

For comparison, the OECD average is just 60%.

If you’re wondering whether the Icelandic pension structure is providing incentives to stay in the workforce, well, it isn’t. Most Icelanders can draw their full salary-funded private pension from age 60 and their state pension from age 67 — yet almost 20% are choosing to stay in the workforce past the age of 70. So, what is motivating older Icelanders to stay in work and employers to value and retain them?

While it’s challenging to compare one culture to another, here are some things that set Iceland apart. The question is, how much of this could be replicated in other countries?

#1: Create a culture of life-long learning and development

Iceland has a strong focus on life-long, in-service training. Almost 22% of the working-age population took part in lifelong learning in 2019, and a large majority did so while employed. These are among the highest participation rates in Europe.

While not specifically aimed at the over 50s, the country has several publicly funded training centers which provide a diverse offering of courses and seminars for life-long learners. The aim is to keep people engaged in work and developing, regardless of age.

The takeaway: Older employees do not necessarily want to be set aside and coast until retirement. They need stimulating opportunities at every stage in their careers to keep them engaged and motivated in the workplace, and they want support to access the relevant skills needed for their re-employment with different employers so they can remain relevant and valuable to the ever-changing labor market. Employers that offer upskilling opportunities and tuition reimbursement can help meet this need and reap the benefits in terms of employee satisfaction, loyalty and productivity.

#2: Focus on work-life balance

Flexibility has been a buzzword for decades now but Iceland’s government and employers have gone to great lengths to put it into action for workers. Between 2015 and 2019, the country conducted the world’s largest four-day working week trial, which saw 1% of the workforce reducing their hours from 40 to 35 a week, with no reduction in pay.

Hailed a triumph by both unions and employer groups, the trial was shown to improve the wellbeing of workers with no drop in productivity. In fact, analysis suggests that productivity may actually have increased despite the reduction in hours.

Many employers were so pleased with the experience that they took action before the official trial results. Today, 86% of Iceland’s working population have permanently trimmed their hours or have been granted the option to do so.

The takeaway: Work Flexibility is one of the focus areas in the Inclusive Leadership Compass (a data driven assessment to develop inclusive behaviors). One of the biggest reasons why workers (older and younger) drop out of the workforce is that some need more flexibility at different times in their careers. This could be due to health reasons or care-taker responsibilities. Or wanting to off-ramp gradually instead of jumping into retirement with both feet.

If every worker above, say, 55 is invited to discuss how their working conditions can be individually adapted to them, imagine the impact it could have. The pandemic allowed almost everyone to work — flexibly and remotely — employers learned the value of considering any reasonable adjustments to retain their employees or risk losing out on the years of experience, strengths and skills.

#3: Redefine what it means to be “old”

How old do you have to be to be considered old? Interestingly, it is not the same from one country to the next. For the average Icelander, people are thought to be old when they reach 65. For Americans, you’re officially old aged 57. That’s a big difference!

Our perceptions of age may sound trivial, but they influence people’s views on what the retirement age should be or whether older people should be employed at all.

Whereas we’ve seen some European countries go into demonstrations over relatively small increases in retirement ages, in Iceland — as in Asia — we see a remarkable degree of support. According to a survey reported in the Nordic Labour Journal, 83% of Icelanders said there should be no age limit to workforce participation at all. And in 2012, the then Director General of the Confederation of Icelandic Employers, Vilhjálmur Egilsson, said the Confederation actively encouraged employers to retain their workers for as long as possible, no matter their age. Egilsson believed that older workers are needed and valued by Icelandic employers and their competence is in demand.

The takeaway: Icelanders believe that people should be allowed to work as long as they are able and willing, not until a particular arbitrary age is reached. This may prove a great lesson for the rest of us when it comes to rethinking our definitions of age and embracing an older workforce. Clearly, you’re not going to change a country’s (or organizations) culture overnight — but it is possible to begin to shift attitudes at an organizational and societal levels. Tackling definitions and stereotypes head-on is the first step to creating an age-equal workplace culture that sees age as simply a number, nothing more.

Final Words

It’s clear that Iceland has different views of aging than many other cultures. This mindset is shared by the government and employers, who are well aware that age is not an indicator of ability or capability, and that older workers can bring real value to the workforce.

The Icelandic experience provides valuable guidance for organizations. Employers should consider both the needs and perception of older workers and open conversations around what it means to be “old” in their corporate culture.

Does your organization need to reframe the way you talk about age?

Do you need to adjust your recruitment processes, learning and development programs and work schedules to be more flexible and inclusive?

Do you need to have better conversations and ask people what they need and how they feel?

By asking the right questions, businesses can ensure they are not missing out on the wide range of valuable skills and experience older workers have to offer.

For employers, the question should not be “Should I employ older workers?” but rather “How can I make sure my workplace is age-inclusive?”

The answer to this question could be the key to unlocking greater longevity in your workforce and improved organizational outcomes.

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Jane Horan

Author. Helping people find meaningful work. I write monthly on inclusion, political savvy and careers and how these interconnect. jane@thehorangroup.com