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Coming of age
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Australian companies are going to have to learn how to manage older workers, because there will be a lot more of them in the future. 
 
Story Melissa Wilkinson 
 
Since the beginning of the decade, the threat of a wide scale skills shortage in the future has pulsed slowly in the background for many Australian policy makers and leaders. Unfortunately, the pressing nature of other issues like the current skills shortage, the drought, labour reforms, political campaigns and, if you live in Sydney, house prices, have crowded out a problem which is just a little bit too far away for it to be a top priority. 
 
The reality is that a large part of the Australian workforce will retire between 2011 and 2030. The baby boomers, who were born between 1946 and 1964 and will be aged 65 years and over, will leave the workforce and take their skills and earnings capacity with them. This is going to put some real pressure on those companies who are already struggling to find good people and overstretching the capacity of their existing workforce. 
 
The data shows that the supply of older Australian workers is set to outstrip the supply of younger workers in the future. With fewer people having children, the ratio of workers to non workers will fall. Access Economics estimates that our working age population will only grow by 125,000 people for the entire decade of the 2020s. This compares with the current growth rate of 170,000 new workers every year. 
 
This research suggests that the longer term implications for the economy are grim. While there is certainly a lovely warm and fuzzy element associated with greater numbers of older people in the workforce– happy and usefully employed – the reality is that governments around the world are more concerned with the sustainability of their public pension systems. 
 
A fall in the number of people working has potentially serious implications for national savings, investment levels, economic growth and competitiveness. The pressure then on the welfare system from more people drawing on its resources is one of the policy issues voted most likely to keep a political leader awake at night. 
 
As a result, we’ve seen various government-funded campaigns launched to raise awareness about the ageing population and educate leaders about the benefits of employing mature aged workers. The spin doctors tell us that over 65s bring: 

  • greater experience and wisdom 
  • lower absenteeism 
  • lower job turnover rates 
  • greater loyalty 
  • strong work ethic 
  • good, old-fashioned, quality service 
  • potential for greater engagement with older customers.
Business leaders have been sold the diversity is the key to success line for some time, with women in the workforce the most recent issue on the agenda. 
 
Slow Reaction 
With any major demographic shift, the wheel of change turns slowly. The culture of early retirement which grew up in the 1980s and 1990s is a trend proving difficult to reverse in corporate Australia. 
 
While there is certainly greater recognition that there’s an ageing workforce issue out there, talk is still the norm. It seems it’s still easier to throw money at feel-good initiatives than it is to invest in changing theway that people think over the longer term. 
 
There are still lots of misconceptions about older workers and stereotypes remain rife, particularly among recruitment firms and HR managers. 
 
Nicole Isaacs, regional director for Hays Human Resources, says that companies are basically worried about the ability of older workers to keep up. 
 
“They’re concerned about a mature age worker’s ability to adopt new work practices, learn new skills and stay up to date with the latest changes, particularly in information technology. However, from the research I’ve seen, over 45s actually have the highest take-up of technology. Part of the issue is that recruiters need more education around mature age attraction and retention strategies,” she says. 
 
Human resource people also tend to be younger, which means they can find it harder to bond with older candidates. Plus, they can be more transactionally focused and are less likely to take a strategic viewpoint on how an older candidate could fit into a workforce. 
 
Keeping Older Workers 
According to research from globalrecruitment firm Hudson, employers wishing to improve their engagement with mature age workers should focus on flexibility, remuneration, meaning and culture. 
 
Richard Blaney, practice leader in Hudson’s Accounting & Finance Division, suggests the following tips:
  • check that your HR policies speak out against age preference in recruitment, training, promotion and career development 
  • ensure any team building and bonding activities take into account the various life stages of team members 
  • be proactive in positioning and designing flexible employment options that address the particular needs of your workforce and the individual needs of mature-aged workers 
  • allow for a new way of structuring work that can incorporate different role design within teams. Co-leadership roles and mentoring positions can be utilized effectively in this way 
  • ensure your workplace culture embraces and understands the need for flexible work options. These can include contract work, part-time work, job sharing, working from home, extra unpaid leave, extra annual leave at a reduced salary and transition to retirement through reduced work hour 
  • create a pool of experienced people who have retired but are willing to work during peak periods or on special projects.
It's Not One Size Fits All 
There is a tendency when developing strategies to address older workers to group all over 65s in the same swathe of cardigans and grey hair. The reality is that there are a number of different drivers that influence mature-aged workers’ desire to stay in the workforce. 
 
Research from Hudson in 2006 found that some of the key drivers included minimal commuting time, remuneration, friendly work environment, new challenges, recognition, flexible hours and the ability to work from home. 
 
These trends are not unique to Australia. An online work and age survey of nearly 6500 baby boomers conducted by the New Zealand Equal Employment Opportunities Trust in 2006 revealed a number of similar findings. The survey explored what people want from work as they get older and what workplace conditions are important. 
 
The survey found that: 
  • most retired respondents would like to be still doing some paid work quality part-time work (66 per cent) and flexible working hours (64 per cent) were the two greatest factors that would encourage people to work past their expected retirement date 
  • the ideal transition from full-time work to retirement involves part-time work or more flexible hours 
  • about one in three respondents said that they had experienced some form of age discrimination at work 
  • many of those in the workforce did not know whether their employer offered any sort of retirement planning or transition initiatives.
The most common strategies were retirement planning seminars, ability to work part-time or flexible hours and getting older workers to mentor new staff. 
 
Mature Age Champions 
There are some companies ahead of the curve and actively trying to manage the shift in demographics. Experience has always mattered in banking and ANZ has already started to implement initiatives to address this. 
 
Head of diversity at the bank, Fiona Krautil, says that the biggest shift in the bank’s policy towards older workers came when a policy that over 55s had the right to work part-time was issued. 
 
“This was a very symbolic cultural change for ANZ and was designed to start changing the mindset of the organisation. We also reviewed a lot of our HR policies, including our approach to promotions and the need for formal qualifications. As mature age workers are less likely to have tertiary qualifications, business units ca now waive the requirement for a tertiary qualification where a candidate’s experience is considered sufficient. 
 
“Mature age workers have huge amounts of experience and wisdom that is particularly valued in banking. The market can be quite tumultuous, so people with 35 years of experience in different economic cycles are incredibly valuable in the industry. We’ve also found that our customers like to speak to older people on the phone about their finances,” she says. 
 
ANZ is tackling the lack of awareness about mature age issues by promoting the value of experience and knowledge in its branding and marketing. The tag line Age is no barrier is used in all internal and external position advertisements and stories about people who work flexible hours are shared regularly through the bank’s internal magazine. 
 
Since launching these initiatives in 2004, ANZ has shifted its average retirement age from 54 years to 57 years. In 2006, it was recognised by the Department of Employment and Workplace Relations as a mature age champion employer. Its employee engagement scores are also impressive, with 72 per cent of employees over 55 years old saying they’re engaged. Real estate group Mirvac is taking a different but still successful approach to mature age workers. 
 
The company has adopted a more non-exclusionary approach to people management. According to its group general manager for human resources, John Bunting, Mirvac just cares whether you can do the job. 
 
“We’re open to any age here, so if someone has what we need, their age is irrelevant. It’s based on a philosophy which says: ‘don’t come to us and tell us the candidate is 55; come to us and say the person’s got the right skills’. 
 
“It’s a cultural thing. We embrace all employees and want everyone to feel part of the Mirvac team. The manageing director, Greg Paramor, has created a culture here so that anyone who works well is accepted and valued. We work very hard to keep people if they’re working well. We’ve had four or five people retire in the last 12 months and have allowed them to gradually reduce their working hours. We worked with them to find out what they could usefully do in three days a week.” The fact that Bunting was hired as the head of HR at Mirvac at 56 years of age is a telling sign. One of Mirvac’s more colourful star recruits has been Selwyn Blumberg, a 75-year-old retired dentist from South Africa who is now Mirvac’s records clerk. According to his manager Hala Nagy, Blumberg has his own fan club within the company. 
 
“Everyone has a lot of respect for Selwyn and we’ve never been so organised. The old fashioned work ethic is very hard to find,and to have it again is just fantastic. He’s teaching the rest of us a lot.” 
 
Even without the volumes of empirical research, it seems that mature age workers are too valuable to waste. Best practice people managers would find it hard to argue that that every worker shouldn’t be assessed on their individual merits and worth to an organisation. 
 
Competence and experience do count, but it’s going to take a lot more than flash public relations to get more companies to dump the use-by-date mentality. 
 
Professor Philip Taylor from Swinburne University of Technology, who has been researching mature age worker issues for the past 20 years, believes that the outlook for older workers is not uniformly positive. “We need to be quite cautious about the opportunities available for older workers to stay in the workforce. Employers can be particularly ageist towards older workers and many do not view them as the future. There are concerns about their health and the usefulness of training them. Stereotypes still play a huge role in the workplace and people are still quite sceptical. 
 
“There’s quite a large reluctance to take them on and there’s not really enough evidence to show that employers are changing their ways. Global competitive pressures are forcing many companies to bring in younger, more skilled, workers from overseas. This is creating a situation where many older workers can only find part-time roles even though many would prefer to work full-time. It’s not an entirely dire situation, but we need to be cautious about jumping to the conclusion that older workers are the future of the workforce. 
 
“We need to look at this issue with a cold, hard eye. Employers need to talk about ‘age free’ employment and think seriously about removing all age barriers. It is foolish to apply certain attributes to older workers. “For example, the Government has been promoting the retail sector as a good industry for older workers to find employment. However, it’s been shown that retailing is very risky for older women in terms of falls and accidents. We need to be more grown up about how we think of all of this.”