Maintaining Social Capital at 55 Plus

You may have heard this: working life has phases. First you are ambitious and you stay that until you are 35. The next 20 years are about exploring balance and peak performance. And then there is the final stage, starting at around 55, which is all about reaping the benefits of knowing that little problems are unimportant, of taking care of the culture of the organization, of getting on with doing a job well.

In the Netherlands, this is so old hat

Employees entering the final phase of reaping the benefits are finding themselves being phased out at their job. Reaching retirement age as an employee is a goal few will see realized.

So what happens to these phased-out 55 + people?

Since 2003, the number of self-employed people in the Netherlands has almost doubled, to one-tenth of the employed population. Their average age is 48.  The occupations range from knowledge-based to manual labour but the majority by far,  twenty percent of the men and thirteen percent of the women, are specialists in some aspect of business. A further nineteen percent of the women are in the health care industry.  The average earnings are not much different to the average earnings of employees, but the fact is that the large majority of the self-employed earn significantly less than wage labourers. The highly skilled business consultants with good businesses earn well.

In the Netherlands, there are a number of scenarios for continuing to work after being phased out. Some people are offered retraining and a severance package. They have the time and money to build an independent business. Others receive the equivalent of a few months of pay before going on to unemployment benefits. The unemployment services encourage them to develop their own business.  Others choose to retire early.

How my friends respond to being phased out

Two friends, both 60, imagined that their new life would include some business gigs related to their former employer and discovered that they were mostly on holiday. Another friend anticipated being able to carry on as a freelancer doing what he had been doing within a large organization. He discovered that the context of the organization was everything: people dealt with him not just because of who he was, but who he represented. “My life is now somewhere between a train wreck and retirement”, he told me. “I have become old, and irrelevant.”

Another friend, an internationally respected specialist in her field, with 10 years to go before retirement, learned earlier this year there was longer a position for her in the non-profit organization she has worked in all her life. She acknowledges she ‘should’, like her friends, become self-employed, but is struggling to see the marketability of her skills and experience outside her specific niche area.  

And then there is my friend who has an impressive career building culture and nurturing teams in the Dutch unemployment service industry, who recently learned there is no longer a place for her in the service. She has opted for early retirement.

Without social capital, nothing works

When I chose to become self-employed at 55, it was part of a dream I had long entertained of being able to contribute to many organizations, rather than to stay employed in a specific organization.  My dream was to bring abundance to organizations that value the dignity and respect of all people. As part of the transition, I carefully managed the process of developing new networks and maintaining relationships that I valued from previous work. I knew that one of my assets was my social capital.

Social capital is generally defined as the social relations and social networks of individuals, and can be characterized by norms of trust and reciprocity leading to outcomes of mutual benefit.[1] Like any form of capital, to retain value it must be managed. On severance from their previous employers, each of my three friends experienced an acute loss of social capital. They didn’t just leave a job: they left an infrastructure that generated business opportunities, performed key tasks relative to running a business and offered many opportunities for social interaction on a daily basis.

Given the paradox that, rather than moving into the reaping the benefits phase of their working life, 55 + people are now needing to build new social capital, what opportunities are available?

The new 55 + entrepreneur needs to retain and build social capital and has to do that purposefully. It will not happen magically. He or she can become an active member of a board and participate fully in local business associations, something which will reverse a trend. 20 years or longer ago, a pretty standard way to develop social capital was to become a member of a club or society. Current research indicates that the number of memberships that people have, is declining. One in three are members of a sport club – but if this is a gym it will not result in many conversations. Four in ten people belong to a consumer organization and one in five is a member of an environmental organization[2], neither of which contributes to a person’s social capital.

The jury is still out on whether new online spaces of social interaction contribute to the social capital of an individual. Used purposefully, they can be. Otherwise they are little more than a distraction.

Beyond what already exists, new and specific spaces that link the freshly minted 55 + entrepreneurs to people who can contribute to their business opportunities and their social well-being are needed.  These spaces should cater to a variety of individuals – gregarious and introvert, gay and straight, ethnically diverse. Creating the spaces is far more than extending a helping hand. Without these new spaces, younger generations will lose the benefit of association with 55 + mentors, culture carriers and people of experience. Older people will become increasingly more isolated. The fabric of our society, social cohesion, will deteriorate and with that the willingness to stand in someone else’s shoes.


Lin McDevitt-Pugh MBA is Chief Abundance Officer with NETSHEILA. Her book on social capital, So You Think You Can’t Network, will be published in 2016.

[1] From: “Social networks and the labour market mismatch” Kalfa, E and Piracha, M (2015) IZA DP No. 9493


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