Silver Collar: Retaining and employing the older workforce


“There is a stereotypical view of job opportunities for the older workers, and it’s not pretty. The conventional wisdom says it’s impossible but the facts say otherwise.”- Harvard Business Review, Nov 2016

It’s a fact where Malaysian ageing population rising and Malaysia will become an ageing nation by 2030, when Malaysians aged 60 years and older will make up 15% of the population.

Age is not a bad things when come into work, because as you grow older, you are one step closer to retirement—a status where you no need to rush for work and have enough of time to enjoy your life without the pressure from work.

Most employees in Malaysia expect to retire only between the ages of 60 and 65 and according to the Statistics Department, men are expected to live until the age of 72.5 and women until the age of 77.4, considering the increases in life expectancy, would a person who retires at the age of 60, based on the provisions of the Minimum Retirement Age Act 2012, be able to finance himself/herself for the rest of his/her longer life?

The answer remains unclear, people might have enough money for their long life, what about those who do not have enough savings, are they still employable to sustain their living?


Current landscape

Datuk Shamsuddin Bardan, Executive Director of Malaysian Employers Federation cited “it’s not yet a culture in Malaysia” when asked about the employment of elderly workers in Malaysia. “There are about 200,000 employees in the formal private sector that retire every year, and most of them leave the labor market for good, only a handful of them may be offered re-employment but even that is normally on shorter fixed term contract of one year or even on month to month basis.”

There are stereotypical conceptions about recruiting and having an older workforce. According to a research findings entitled “Perception of Human Resource Personnel towards Malaysia Older Workers”, some corporations or organisations are not going to re-employ them because of the possible following reasons: providing opportunities to the younger generation, older workers are deemed less productive, maintaining an older workforce could also be seen as more costly etc……

“one of the prevailing challenges of an older workforce is due to the higher costs involved in terms of wages/salary, medical costs, more prone to illnesses, lack of skill sets irrelevant to the current needs of employers/businesses and can be seen as being less productive as well as not agile as younger employees.”

Datuk Shamsuddin Bardan goes on further to comment that employers prefer to employ younger employees premised on the fact that the younger employees are technologically savvy and in sync with the current needs for enhanced business operations and they are more trainable as compared to their older colleagues.

Datuk Shamsuddin Bardan, Executive Director of Malaysian Employers Federation
Datuk Shamsuddin Bardan, Executive Director of Malaysian Employers Federation


How can we shift the mindset?

First and foremost we must change the perception that an older workforce does not equate to ‘high costs’ and ‘low productivity’. On the contrary, they are experienced and equipped with a stock of accumulated knowledge that can be harnessed into valuable assets to the employers.

The National Human Resource Policy actually plays an important role in this issue, and government should consider introducing a national policy on the re-employment of older employees.

Datuk Shamsuddin Bardan also suggests that, tax incentive should be given both; to the employers/businesses that employ older employees and those employees who continue working beyond 60 years old.

He further reiterates that, employers/businesses who adopt the practice of employing older employees, should be given double tax deductions.

“For those older employees working beyond the age of 60 should be given tax free status. It will serve as an incentive considering they have been paying income tax for the past 35 to 40 years of their working life.”

Keeping an older workforce in the employment marketplace can be seen as’ killing two birds with one stone’. It can help address the issue of keeping the elderly to be continuously active physically, socially and mentally whilst earning income to support themselves as we are living longer. On hindsight, it also helps business reduce a high reliance on foreign workers.

“If those beyond 60 years old continue to be employed for the next 5 years we would have about 1 million elderly workers in the labor market.” He added.


Moving forward

Datuk Shamsuddin Bardan shared some best practices and policies adopted by other countries which we can look into especially when it comes to recruitment of older workforce.

“Singapore who is our neighbor and share similar cultural background has re-employment laws and policies which addresses these issues effectively. The country’s re-employment age policy was increased to 67 years old recently; the United States of America (USA) also has policies against the use of age as a factor for employment.

MEF has undertaken some initiatives to address the issue of employment of older workers and has submitted as part of its proposal for the previous and upcoming budget dialogues with the Ministry of Finance, to introduce the tax incentives for the employers and employees in Malaysia to encourage employment of older workers.

As the Executive Director of MEF, Datuk Shamsuddin Bardan strongly believes that re-employment of older workers should be a common practice and be made as a culture in Malaysian employment market.

“I advocate that employment of the older workers encouraged and become embedded as part of Malaysia’s culture where they are allowed to continuously part contribute to the growth of the national economy.”

Malaysia is still a developing country; it is not good to waste the skills and experience of older people who are still able to contribute to the growth of the nation economically and socially.

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