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Tess Vigeland: This week Spain's government raised the retirement age from 65 to 67. It's part of an effort to get that country back on solid financial footing in the wake of enormous budget deficits. A couple of months ago, the U.S. Deficit Commission recommended raising our retirement age here to 68 for similar budget reasons.
Germany's already done it -- raised their age by two years to 67. But companies and employees are finding that working later in life has some unexpected consequences. Caitlan Carroll reports from Berlin.
Caitlan Carroll: Most mornings it's still dark outside when workers drive through Berlin to pick up the city's trash. It's a tough job. They have to push heavy bins from apartment buildings and homes out to the garbage trucks. Every stop, workers jump off the truck, and then jump back on again. The job is especially rough on aging joints.
Andreas Scholz-Fleishmann: If you are 55 and already a bit tired and things begin to ache your back and everything. If you are 30 years in waste collection, you are not really in very good shape anymore.
Andreas Scholz-Fleischmann is on the board of the waste management company BSR. About five years ago, the firm analyzed its workforce and found that the average age of its 5,000 employees was 46 and rising.
Scholz-Fleishmann: Most of the people are between 40 and 55, and there are almost no people below 30 and no people above 60.
It's a similar case for many companies in Western Europe. Birth rates have fallen. There aren't enough young people to replace those who retire in specialized fields like engineering. That's why the German government is raising the retirement age.
But adding a few years to a workforce can change the dynamic of a company. Older workers often have different priorities than their younger colleagues. They need more training to keep up with the latest technology. A lot of them want flexible schedules so they can take time off for health issues or just relaxation.
Juergen Deller teaches human resource management at Germany's Leuphana University.
Juergen Deller: They have no experience how you manage these people. They have never supported them usually, health-wise for instance.
HR managers sometimes meet resistance from higher up when they push for long-term plans to deal with their aging workforces. A recent study showed around 80 percent of executives don't see demographic issues as a big deal, but Deller says they can't ignore the topic much longer.
Deller: In five years' time, we will have a shortage of more than 3 million qualified employees in Germany. And that is a big number for a country of 80 million.
Some businesses now provide better working conditions for their older employees. They realize it often costs more to find and train a new employee than to hold on to the ones they have.
Auto companies like Audi and BMW are gaining ground on competitors with their innovative programs. BMW made about 70 small changes. Workers get special shoes, places to sit near the assembly line, and computers screens with bigger type. Productivity's gone up 7 percent.
BSR, the waste management company in Berlin, is trying some changes of its own.
Klaus-Dieter Klette is a 62-year-old employee. He started at BSR 35 years ago. Klette can no longer handle the daily grind of garbage pick-up, so he's participating in a new project. It's called "lid to lid." Older workers install new lids on broken trash cans. The work is less physically grueling. He's able to work with friends he's known for decades. And because of this, Klette feels good about staying around.
Klaus-Dieter Klette: Well actually I'm not thinking about retirement at the moment. I still have a few years to go and I will work until I will finish and go into retirement then we'll see what happens.
Klette's plans may be up in the air, but companies need to start thinking about what comes next. About a fifth of the German population will turn 65 in the next decade. That's a lot of jobs to fill.
In Berlin, I'm Caitlan Carroll for Marketplace Money.