Many company closures await when elderly small business owners retire
News: Oct 27, 2011
The population of the EU is becoming older, and an ever smaller number of people have to provide for the ageing population. In Sweden, an already critical employment situation is exacerbated by the fact that 25% of managers of small and medium-sized businesses plan to retire in the next five years, and this is estimated to lead to a company closure in one in ten cases. Research from the University of Gothenburg now shows what can be done to keep elderly people in the labour market.
Under the EU-funded research project Best Agers, researchers at the University of Gothenburg have conducted demographic studies of the Västra Götaland Region and Norrbotten.
“Larger cities also cope well in the longer term. But large parts of the countryside, including in Västra Götaland Region, are affected by low birth rates and outward migration. It will be difficult to maintain community services in those areas,” says Roland Kadefors, a docent (associate professor) at the Department of Work Science of the University of Gothenburg.
The researchers have conducted demographic analyses and made projections of outward migration and future age structures.
Small and medium-sized companies – companies with fewer than 250 employees – account for a large share of employment in Sweden’s small municipalities. Sweden has one of the oldest sets of managers in that category of businesses in Europe, for historical and political reasons. 25% of these business owners will retire in the next five years, and 40% within ten years. This is equivalent to 55,000–60,000 companies, 175,000 companies if sole traders are included. These companies account for more than 700,000 jobs. The risk of closure is estimated at around ten per cent, equivalent to 70,000 jobs.
“Generational changes are critical times for small businesses. Either a family member or am employee takes over or the company is sold to an outsider, and that can either go well or go badly. The alternative is to close down the business,” says Kadefors.
Under the research project Best Agers, the researchers in the eight participating countries have identified the obstacles to labour over the age of 55 remaining in the workforce or returning to it that exist in each country. Employees, employers and representatives of authorities have been interviewed.
The result for Sweden is a 17-point programme (see below), in which a number of measures are listed, at employee level, at employer level and at society level. Kadefors highlights one of the items at the society level is particularly important: being a pioneer.
“It is important for older people to be involved in the parliamentary work and in other visible public activity. Unfortunately the trend is moving in the wrong direction in the Swedish Parliament, with fewer people over the age of 65 in the present parliament than in the previous one.”
For further information:
Roland Kadefors, Docent, Department of Work Science at the University of Gothenburg, telephone: +46 (0)31–786 3224, +46 (0)706-233 534, e-mail: roland.kadefors@av.gu.se,
website: http://www.av.gu.se/Personal/Roland_Kadefors/