New 60-plus work visa sparks debate over UAE's retirement age

Domestic workers will be able to stay beyond 60 - but experts say raising the retirement age across the board could boost the economy

People with expired DHA health cards can still get medical treatment in Dubai. Jaime Puebla / The National
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Raising the retirement age would attract more talented professionals and reflect that people are living and working for longer, industry experts have said.

This week, the government said domestic workers would be allowed to stay beyond the age of 60.

The move - part of a wider overhaul of visa rules - brings domestic workers into line with other professions, who are able to stay beyond 60 with year-to-year extensions.

Although 60 remains the country's retirement age, there are exceptions. Visa extensions can be an issue and most residents therefore expect their time in the country to come to an end when they enter their sixties.

That's what the UAE needs, people who are older, who have the got the experience, to train their younger generation up

A wider re-examination and extension to 65 or even 70 would be welcomed by businesses and workers, workplace specialists told The National.

“With lifestyle changes, people are now working until 65 or even 70,” said Vijay Gandhi, a director in the Dubai office of HR consultants Korn Ferry.

“So it may make a positive impact if we change the age limit beyond 60, to 65. I think that would make sense.”

It is relatively straightforward to secure year-to-year extensions for workers aged over 60, particularly if they are in executive-level jobs, Mr Gandhi said. However, he said issues often emerge for workers beyond 65 for those in lower paid or non-executive jobs.

A rise in the retirement age would provide “more relief” to residents who have moved to the UAE, he said, who are now more likely to regard the country as a long-term home.

The current age, set 20 years ago, is low by international standards, with most European countries setting their threshold at 65 or older. For Emiratis, the retirement age is 49.

“We see more older people coming here and working in the region,” Mr Singh said.

“Also, residents are no longer staying for two or three years. They’re staying for 10, 15 or 20 years.

Dubai, Jan 16th, 2012 --  DIFC STOCK -  Business people on escalators at DIFC. Photo by: Sarah Dea/ The National
Companies often lose a great deal of experience when experienced employees retire at 60. Sarah Dea / The National

"The working population is ageing and staying longer, but 60 can still be a mental barrier, even if visas are still issued.

“Older workers bring experience and a skill set that can be used to train the younger population. We see more of this in the UAE, especially in banking and financial services.”

Official statistics show that in 2017, 1.3 per cent of employed people in the UAE were aged between 60 and 64 and fewer than one in 200 – 0.4 per cent – were aged over 65.

Some highly skilled overseas workers have been put off moving to the UAE because they were approaching retirement age and did not want to risk having extension requests turned down, said David Mackenzie, from recruitment company Mackenzie Jones Group.

“This issue is coming up more and more,” he said. “People tend to retire a lot later now for fiscal reasons, but also because people have a lot more energy.

"I think we should scrap the retirement age of 60 – I don't think it should be an issue any more. I think it could be up to 70. There are a lot of people who have really good skills at 60-plus years old."

Mr Mackenzie recently tried to fill a chief executive role in the transport sector. He found a suitable candidate, but because he was 58, he turned down the job offer.

"We talked to the HR people in the company and they said 'we can probably only do it for a year, maybe two, and there is no guarantee after that'," he said. "So the guy said 'I'm not coming – there's no point'.

"If you look at the oil and gas industry, a lot of the people working there are typically in their late 50s. So, you're losing a huge amount of experience just because of an age barrier.

“If you extended the retirement age to 65 or maybe beyond that, you give those people a chance to stay.

"They can train people up to develop the skill base, and that's what the UAE needs – people who are older, who have the experience, to train up the younger generation."

Globally, older workers are increasingly staying in the workforce, according to PricewaterhouseCoopers, which publishes an annual Golden Age Index.

A report on 35 OECD economies, – which did not include the UAE – suggested their collective GDP could be increased by $3.5 trillion (Dh12.85tn) in the long term if employment rates among older people matched the levels in New Zealand. In New Zealand, 78.2 per cent of people aged 55 to 64 are still employed, and among over 65s it is 42.6 per cent.

Gareth El Mettouri, associate director at recruiters Robert Half UAE, said: “With more generations in the workforce than ever before and an ageing population, we know that businesses are keen to access the right skills to drive their business forward.

“The world of work is evolving with new technology, geopolitical changes and an ongoing skills shortage affecting organisations across the globe – the UAE will need to adapt to be successful in this new working world.

“Retirement age is one factor among an array of other changes to consider in the world of work. Right now, we know that the way employees want to work is shifting and that there is a greater desire for flexibility across nearly all generations.

“This is in part due to the impact of technology which is both a significant impact for both employers and workers alike. As new technology begins to infiltrate business processes, the roles of tomorrow begin to evolve.”