The effects of Australia's ageing workforce are expected to be so pronounced that the government has budgeted for retraining, but what can human resources do?
Between the tax cuts and promises to return to surplus, one of the centrepieces of the 2018 Budget was increased funding to assist Australia's so-called 'greying' population. The measures include budgeting:
- A$17.4 million over four years to establish the Skills Checkpoint for Older Workers Programme; and
- A$189.7 million over five years to support mature-age workers adapting to the transitioning economy.(1)
This update explores the implications of an ageing workforce for employers.
According to the 2016 Census, nearly one in six Australians (16%) were aged 65 or over. Australia's ageing population has significantly increased over the past century and is expected to continue, with estimates showing that by the end of the next decade, one in three Australians will be over 55.
The retirement age in Australia is also changing. Although the traditional and informal retirement age has been 65, the proportion of people in the labour force aged 65 or over has been steadily increasing. From 2006 to 2016, the proportion of people in the labour force aged 55 or over increased by 13%.
These trends – together with the high cost of living and inevitable increases in the eligible age for receipt of the age pension – indicate that the number of older Australians participating in the labour force will likely continue to rise. At the same time, as Australia's demographics change, businesses will need to engage and retain mature-age workers in order to reduce the effect of a large non-working population on the economy and welfare system.
Multi-generational workforce For the first time in history, four or five generations of people may now be working together. The differing work values and expectations between each generation can create all kinds of management and intergenerational conflict for organisations. For example, are young employees optimistic or naïve? Further, are experienced employees wise or merely set in their ways?
A range of differing workplace needs An ageing workforce means that employers must now deal with the issue of how to manage and cater to the needs of older employees. While Australians are living and working longer, and are healthier than ever, even the healthiest workers will be affected as they experience age-related declines in:
- physical strength; and
- cognitive ability.
Additionally, mature-aged workers are likely to have a greater desire for flexible working arrangements in order, for example, to care for ageing parents (a reality for many in their 50s and 60s) or to transition into retirement.
Acknowledging the needs of mature-aged workers and implementing suitable initiatives to accommodate these needs will benefit not only the employees, but also their employers. Take BMW for example. When the luxury German automobile company realised that many of its workers who were the most experienced at developing new production lines were becoming too old to cope physically with the demands of the job, it introduced simple modifications such as brighter lighting and seats to ensure that workers did not have to stand all day. This significantly improved productivity.
Increase in age-based discrimination and unconscious bias Finally, the increased proportion of mature-aged workers also increases the risk of age-based discrimination and unconscious bias towards older workers, particularly in recruitment practices and policies.(2)
According to the Australian Human Rights Commission, more than one-quarter of Australians aged over 50 have experienced some kind of age discrimination in the past two years, and four in 10 organisations admitted that they would not employ persons aged over 65.
While discrimination based on gender or race is often at the forefront of workplace strategies dealing with inclusion and diversity, age discrimination has until recently received little attention. This is likely to change, given the participation levels of older workers in the workplace.
To manage the changes to Australia's demographics, employers should start to prepare for an ageing workforce and develop strategies to manage and retain older workers, including:
- undertaking an age audit and succession planning – by monitoring, among other things, the age of workers in particular areas and the age of people leaving, employers can plan for future resourcing needs and the transfer of skills and knowledge;
- conducting training for managers and recruitment panels on unconscious age-related bias and stereotypes of older workers in order to tackle unlawful discriminatory practices and unconscious bias towards older people in the organisation;
- developing mentoring or coaching programmes to promote skill transfer between younger and older workers, as well as training on managing and working in intergenerational teams;
- developing flexible employment opportunities and conditions for older workers to accommodate their needs, including:
- redesigning jobs to accommodate physical restraints;
- offering job-share arrangements; and
- implementing phased retirement options;
- assisting workers to transition into retirement by running 'preparing for retirement' awareness sessions and sessions on financial counselling; and
- re-skilling older workers and investing in education programmes that help them to be more efficient and to harness new ways of working (eg, using technology and social media).(3)
For further information on this topic please contact Aaron Goonrey or Jenni Mandel at Lander & Rogers by telephone (+61 2 8020 7700) or email (email@example.com or firstname.lastname@example.org). The Lander & Rogers website can be accessed at www.landers.com.au.
(1) For a thorough breakdown, please see the Business Insider website.
(2) See Sally Evans' ideas about how to tackle ageism.
(3) An earlier version of this article was first published in HRM Online on May 10 2018.
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