Promoting Better Career Mobility for Longer Working Lives in Austria

Executive summary

Structural transformations such as the green transition and digitalisation, including advances in artificial intelligence, are changing career trajectories. Simultaneously, a significant demographic transition is underway. To harness the benefits of the digital and green transitions as well as increased longevity while responding to their challenges, enhancing the labour market prospects of mid-to-late career workers is critical. Offering workers at all ages opportunities to transition into different and better jobs can prolong labour market participation and address labour shortages.

The employment situation of older workers in Austria has improved significantly, but employment rates remain low in the age group 60‑64, with significant differences between men and women (48.1% and 20% in 2023, respectively). Career mobility could enhance job quality, allow workers to adapt to structural labour market changes and extend working lives. However, mobility declines with age and older workers are less likely to make upward, voluntary job transitions. The probability of job-to-job transitions in Austria is 18.8% for men and 17.5% for women at age 26, but less than half that at age 45 (8.5% for men, 7% for women).

Austrian labour market and social policy institutions and structures display significant strengths, including a well-functioning Public Employment Service (PES), a comprehensive social benefit and healthcare system, significant public support for participation in education and training and a strong tradition of social partnership. Nevertheless, there are structural barriers that hinder mobility as workers age, such as the fragmented policy landscape in the field of health at work, limited participation of older workers in training, a strong focus on lifetime occupations, and substantial gender inequalities in the labour market.

Enhancing company practices for age‑appropriate workplaces and health at work

Workplace practices play a key role in supporting good working conditions that are suitable for workers of all ages and thus engaging talent even as workers age. In Austria, there are several programmes, partially implemented through the PES, which offer free support to companies in developing age management practices including age‑inclusive hiring, job and workplace redesign and working time policies. These programmes have noticeable effects on company practices, but their reach remains limited. Employers could also facilitate mobility through specific tools, such as mid-career reviews. Company-level practices to support mobility should, however, be complemented by publicly provided career guidance outside the company targeted specifically at mid-career workers, which currently does not exist in Austria.

Health at work is a priority area for age management in the workplace. There have been several policy initiatives to increase co‑ordination on workplace health management recently, but the landscape remains fragmented and difficult to parse. In the future, specific focus needs to be placed on management of psychosocial risks in the workplace, which are not addressed sufficiently. In addition, Austria has taken several steps forward to improve case management for return to work after sickness absence, notably by introducing the fit2work service. However, workers on sick leave should be reached much earlier, and the return-to-work process should also include clearly defined obligations for employees and employers.

Enabling mobility by investing in skills and removing structural barriers

Skills are essential for career progression throughout the life course. Participation of workers aged 45‑54 and 35‑44 in education and training is almost equal (59.6% and 61.8%), but participation drops sharply in the group aged 55‑64 (43.3%). Many instruments support training participation, notably also training of long duration, but participation of mid-to-late career workers is often limited. In particular, access of these workers to the skilled worker and nursing scholarships, which support training in shortage occupations for up to four years, should be strengthened. The educational leave programme could also enable job mobility, but reform is needed to improve targeting and strengthen requirements on the type of training.

More broadly, the adult education landscape is exceedingly complex, while federal funding for adult education is limited, constituting less than 1% of the overall education budget. The PES plays a key role in training provision and there is a case for expanding its responsibilities to include training for employees.

Other structural barriers also disincentivise mobility. In Austria, there is a strong focus on the idea of a “lifetime occupation” and on formal qualifications rather than skills. The system for recognition of prior learning is underdeveloped, and own-occupation assessment after illness limits incentives for mobility. Moreover, age‑wage profiles have historically been very steep, and while they have flattened considerably, seniority-based wage increases remain a feature of many collective bargaining agreements.

Addressing the high prevalence of part-time work in the mid and late career

Austria has one of the highest rates of part-time work in the OECD, with the share of part-time work significantly higher for women than men (50.6% compared to 13.4% in 2023). Female part-time work often persists throughout the life course and is associated with occupational downgrading and wage losses. The lack of care infrastructure and flexible work are barriers to transitions out of female part-time work.

Part-time work can enable labour market participation in the late career or for workers with health issues. However, subsidising old age part-time, which is common in Austria, has limited employment effects and mostly benefits well-integrated labour market participants. The option for a time‑limited part-time return to work from a sick leave is a positive development but helps workers with chronic health conditions only to a limited extent.

Key recommendations

• Further strengthen the promotion of age management in companies, also with involvement of the social partners. Promote company practices that enable mobility, such as mid-career reviews.

• Promote workplace health promotion through increased public funding and support. Assist return to work from sick leave through case management with clearly defined timelines and obligations.

• Further strengthen the lifelong learning system by reforming educational leave, anchoring federal funding for adult education in a modernised legal framework and assigning the PES responsibility and funding for training of employees. Encourage participation of mid-to-late career workers in career guidance and training.

• Increase job and labour market mobility by moving away from the idea of a lifetime occupation and further flattening seniority wage profiles for white‑collar employees.

• Enable mobility out of female part-time work by investing in care services and normalising diverse working-time schedules. Abolish subsidies for old age part-time while introducing a right to retire gradually. Consider introducing subsidised part-time work for workers with chronic health issues.