An ageing population creates immediate pressures for changes in both service delivery and in human resources management in government. In reviewing strategies to address these pressing issues, this research project had several strands. It entailed a general literature review, preliminary scoping research in all OECD member countries, and an analysis of data from the latest OECD Survey on Strategic Human Resources Management (HRM). Most particularly, this research also developed a snapshot of ageing policies and actions in nine OECD countries: Australia, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands and Portugal. The range of countries studied in this report suggests that its conclusions are indicative of broader OECD trends.

This chapter examines issues resulting from an ageing population and an ageing workforce. As a result of large increases in the ratio of older economically inactive persons per worker, two main challenges have emerged: the need to reallocate human resources across sectors and institutions and the need to increase productivity due to the fiscal pressures created by an ageing population. There are specific challenges within the public service, where workforces are ageing more rapidly. These present opportunities in the management of public services. Although an ageing public service increases the fiscal burden while also decreasing the public service capacity, in the long run it represents a strategic opportunity to downsize the public sector workforce where needed, to make structural changes to the conditions of employment, introducing greater flexibility, and to reallocate human resources across sectors to meet the increased needs in social and long-term care services for the elderly.

This chapter gives a snapshot of the government human resource management policies which the study has identified in the nine countries examined, as they begin to face the ageing challenge.

This chapter reviews the different strategies that can be undertaken by countries in response to the challenges defined in the previous chapters. It notes the importance of a holistic approach, with the relevant government organisations and the different levels of government working together to co-ordinate the implementation of the chosen strategies. The review of the nine case studies reveals the necessity for more proactive strategies based on: reviewing the demographic profile of the public service workforce to assess potential capacity gaps and financial difficulties; reviewing the longer term capacity challenges that may emerge as service demands change and fiscal latitude becomes more restricted; and examining the room for manoeuvre created by changes to the wider workforce.

This chapter suggests action which governments could undertake by setting out a checklist for countries seeking to develop a national ageing strategy for the public sector.

Ageing is considered one of the three main causes of global changes in the Australian Public Service’s mode of service delivery, together with technological changes and stakeholder needs.1 As a consequence, the level of political and administrative awareness on this issue has increased. The ageing strategy includes a public service-wide restructuring of workforce planning and HR practices.

Relative to other OECD member countries studied, the ageing strategy of the Danish government is quite robust, even ambitious. The strategy effectively balances two sets of measures and priorities, corresponding to the two main objectives of the ageing strategy: containment of rising public expenditures (pensions, public wages, healthcare, etc.) and maintenance of capacity. Three major dimensions of the ageing strategy can be identified: i) the human resource aspects, designed specifically for the central government; ii) the institutional and welfare aspects, which entail public sector-wide restructuring; and iii) the adaptation of management tools.

As the relative size of different age groups continues to change, Finland will soon experience a historic turning point. In only a few years, for the first time in its history, Finland will have more citizens aged over 65 than under 20 and the proportion of this population will increase more rapidly than in most OECD member countries.

Among OECD member countries, France is one of those most affected by the challenges of an ageing public sector. Large-scale retirements have already begun in some sectors and will increase dramatically between 2009 and 2015. Several policy challenges have arisen from this structural development. Between now and 2020, public expenditures devoted to pension benefits are projected to double, as roughly one-third of the current workforce retires. As the proportion of public expenditures dedicated to paying pension benefits increases in proportion to those for public service delivery, the process of budgetary “arbitration” is expected to be completely transformed.

As in many of the OECD member countries studied, Germany is experiencing a profound structural demographic shift, characterized by a growing proportion of elderly and a decreasing proportion of young people in the population, as well as certain national demographic specificities. These demographic changes are going to have a pronounced impact on the German public service as well as on private industry

The demographic situation in Ireland differs from that in many OECD member countries, with larger cohorts of younger people and smaller cohorts of older people aged 65 and above. As a result, large-scale departures have been projected over the long term, and Ireland will face similar policy challenges as other OECD member countries, but they will emerge much later. However, the public service is also ageing more rapidly than the rest of society, and Ireland will have to face a medium term challenge: more than one out of five current civil servants will exit the labor force in the coming decade, which is higher than in the past, but lower than in many other OECD member countries.

Italy faces some of the most difficult demographic challenges of all OECD member countries, with disadvantageous aging trends across the full range of indicators: increasing proportion of older workers, increasing number of pensioners, declining birth rates. Furthermore, the ageing process presents short-term challenges for Italy, which will then continue until 2050. However, political recognition of this looming demographic crisis has come only recently. As a consequence, the Italian public sector ageing strategy remains minimalist, particularly relative to the magnitude of the problem.

Although the country-wide demographics appear quite favourable in the Netherlands compared to other OECD member countries, the situation in the public sector is somewhat problematic. The Dutch government has identified three main problems resulting from ageing: i) long-term financing of social security, including healthcare costs and pension liabilities (AOW); ii) management of older public service workers; and iii) anticipated recruitment difficulties and labour market shortages.

In 2000, Portugal was among the countries with the greatest proportion of elderly people, as measured by the percentage of the total population aged 65 and over, as well as with the greatest share of public service personnel scheduled for imminent retirement. Nevertheless, Portugal has not developed an ageing policy for the public service, per se. Instead, political attention has been focused on attempting to control the growth of the public service as well as on weak economic growth and the resulting increase in public debt.