Demotion and ageing: to what extent can demotion be a strategic HR-tool to avoid an early exit of older workers from the labour market?

Do HR managers use voluntary or imposed demotion as a strategic HR tool to avoid an early market exit of over-45s, and with which effect? In many European countries too little active workers can bear the cost of a fast ageing population. The participation of older workers in Europe, and more specificaly in Belgium, is very low. Therefore it is appropriate to encourage over-45s to work longer.

On one hand, there are some elements, such as social beliefs and stereotyping of employers and employees, that encourage older workers to exit the market more quickly. The relationship between salary and the length of service tends employers to push older workers into early retirment or dismissal. On the other hand, there are elements, such as lifelong learning and part-time work, that keep eldery active.Can demotion, a downward movement, be another element to prolong the presence of over-45s on the labour market?

There is very little empirical research on motives and effects of demotion, amongst others caused by a taboo surrounding demotion.Demotion is indeed seen as a failure. Qualitative expert interviews of 16 HR managers of production and service multinational profit organisations in Belgium reveal the motives and effects of demotion within HR policy. This research provides insights into the applicability of demotion as a strategic HR tool to avoid early labour market exit of older workers.