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Experience and the battle for the ages at work

They sound like the perfect employee – a wealth of experience, true loyalty and a willingness to accept lower-paying roles just to stay active in the workforce.

So why do so many workers aged 55 and over feel as though they are being left out in the cold at a time when the Australian Government wants the retirement age to stretch to 70 in 2035?

"Many workers aged 55 and over feel as though they are being left out in the cold."
Cameron Cooper, Business journalist, blogger & editor

Anecdotally, even many workers in their late 40s and early 50s - especially women returning to work - are often not on companies’ recruitment radars.

This is despite the Australian Human Rights Commission’s Willing to Work report providing a compelling case for why government, business and the community should embrace older workers.

First, it notes, employing older workers cuts Australia’s overall welfare expenditure and increases people’s self-reliance in retirement.

Second, being an employer of choice of mature workers can help attract talent and enhance customer’ views of an organisation.

Thirdly, engaging older workers often sees them stay healthier cognitively and physically for longer.

UNSUSTAINABLE

Dr Kay Patterson, the Age Discrimination Commissioner at the AHRC, believes age discrimination is still prevalent in the workforce, and she adds excluding older workers is not sustainable for the nation’s economy as the population continues to age.

In 2015, the commission released a survey of age discrimination in the workplace. The findings indicated 27 per cent of people over the age of 50 had recently experienced discrimination in the workplace.

One-third of the most recent episodes of discrimination occurred when people were applying for a job. Disturbingly, one in three of those who had experienced age discrimination gave up looking for work.

Patterson says employment is crucial for individual welfare and financial security, allowing people to provide for themselves and their families while also stimulating the economy.

“So it’s practical and sensible for the community and for individuals and businesses to embrace older workers.”

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A NUMBERS GAME

Fairness and equity aside, it seems clear for purely economic reasons government should craft policies encouraging older workers. 

For a start, there will be more of them, with the 2015 Intergenerational Report projecting the number of Australians aged 65 and over will more than double by 2055, while men can expect to live on average to 95.1 and women to 96.6 years.

Furthermore, a 2012 Grattan Institute report, Game-Changers: Economic Reform Priorities for Australia, ran the rule over reforms to the tax mix and increasing the workforce participation rates of women and older people and found such changes could contribute more than $A70 billion a year to economic growth.

Five years since the report’s release, the institute’s chief executive officer, John Daley, says some steps, but not enough, have been taken to address the issue.

“This is a reform that’s potentially worth in the order of about 2 per cent of GDP over the long run. So that’s definitely worth getting out of bed for,” he says.

Daley welcomes the Australian Government’s moves to lift the age of pension entitlement, suggesting this is a “very large economic lever” which will lead to older Australians staying in the workforce longer.

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He also thinks the age at which people can access their superannuation without tax penalties – it is currently 60 – significantly influences retirement choices and that the age should be increased.

“We haven’t yet moved as far as we can and one of the reasons for that is that some of the policy things that would make a difference are politically difficult,” Daley says.

He sees some positives on the jobs front, saying female workplace participation among older age groups is rising, while the loss of manufacturing jobs for men aged about 50 in the 1990s is turning around because of higher education levels today among that age cohort.

“I don’t want to suggest getting a job is easy,” Daley says. “Clearly, unemployment has been a little higher recently, but it’s a lot lower than it has been in the past.”

Although Patterson agrees there are pockets of hope, she is especially concerned mature-aged workers tend to have greater difficulty finding subsequent employment when they do become unemployed.

The Willing to Work study found the average duration of unemployment for mature-age people is 68 weeks, compared with 30 weeks for 15 to 24 year olds and 49 weeks for 25 to 54 year olds. It is a gap Patterson wants to see closed.

A Deloitte Access Economics report, titled Increasing Participation Among Older Workers: The Grey Army Advances, also predicts significant potential economic gains from an uptick in mature-age workforce participation.

The 2012 report indicates a 5 percentage point lift in participation of workers aged 55 and over could contribute about $48 billion in extra GDP – or 2.4 per cent of national income – ranking it with gains the nation has experienced from major economic reforms in the past.

According to Juliet Bourke, human capital partner at Deloitte Consulting, older workers regularly report re-entry into the labour market is challenging. She calls on Australian companies to play an active role in combatting myths and preconceptions if they want to harness this rich pool of talent.

“Mature age workers are commonly stereotyped about their interests, capabilities and capacity,” she says.

 “These stereotypes are even coded into sayings such as ‘You can’t teach an old dog new tricks’ and the pairing of mental images, such as ‘young and dynamic’. This puts mature-age workers on the back foot and can even create self-doubt that is just not true.” 

THE CASE FOR OLDER WORKERS

A review of published research by the Essex Business School in the United Kingdom points to the folly of discriminating against mature-age employees.

At car manufacturer Mercedes-Benz, for example, it was found productivity rises with age all the way up to retirement, while older workers make fewer serious mistakes and can cope better with crises than their younger counterparts.

Likewise, in the restaurant industry, the British Hospitality Association reported that McDonald’s in the UK discovered that the higher the mean age of the workforce, the higher the service quality, customer visits and sales profits.

Bourke says structural readjustments of the workforce are required to deliver the best results.

“Workplaces have been built on the assumption that workers will retire by 60, if not earlier,”  she says.

“Many business are built on an ‘up or out’ model to ensure that there is room for the next generation.

“Manual labour jobs have been designed to fit the health and physical capability profile of someone aged 20 to 35. Office workers are usually expected to work full-year and full-time, not flexibly.”

Organisations could get a “quick win”, Bourke claims, by better enabling mature-age employees to work flexibly.

“Longer-terms solutions include setting realistic goals based on age-appropriate standards, and reinforcing recruitment and internal communications language that avoids unconscious bias in the workplace,” she says.

Rather than being seen as a threat to the career progression of younger executives or workers, Patterson believes mature-age workers are well placed to supplement the skills of others and offer invaluable mentoring support.

She says some older executives are willing to step back from senior leadership roles to reduce their stress levels in the later years of their careers. They want to contribute without climbing the corporate ladder.

In other specific cases – such as law firms wanting staff members who can sensitively discuss wills with older clients – more mature workers may be the smart option.

“So you can use the strengths of the enthusiasm and energy of young people and then the strengths of the wisdom and commitment of older people,” Patterson says. “Both sets of traits have their roles in business.”

WHAT BUSINESSES CAN DO

Deloitte estimates by 2030 there will be more than five million Australians aged 55 to 70 and, based on current participation rates, just 1.73 million of them will still be in the workforce.

To tap into this this potential source of skill and productivity, forward-thinking employers need to think differently about staff engagement by seeing each employee as an individual.

“Each person is much more than a date of birth,” Bourke says. “By dropping stereotypes, employers open up their minds to discussions about career moves and development opportunities with mature-age workers, rather than assuming those questions are irrelevant.

“Plus there might be additional ways of stimulating engagement, such as encouraging mentoring programs and providing flexible work options.”

Bourke also thinks a new approach to educating for the future is required.

“Not only can continuing education programs assist mature workers to help find new employment opportunities, they can help all age groups retool,” she says.

“All of us are living longer, and in the 50 or so years of our working lives, none of us will be doing the same job, working in the same place or even in the same industry that we started with. A change in the education system will allow our workforce to adapt more readily to the job market of the future.”

Greater awareness of work opportunities is also required among older workers. A report from recruitment agency Chandler Macleod notes while employers regard older workers as productive, motivated, safe and knowledgeable, 25 per cent of respondents indicated a key barrier to hiring workers aged 50-plus comes down to a simple factor: the older workers do not apply for the roles.

The AHRC’s Willing to Work report lists a range of recommendations to ensure employers are inclusive of mature-age workers. These include:

  • ensuring leaders are committed to age inclusion;
  • implementing non-discriminatory recruitment and retention practices;
  • providing flexible work arrangements;
  • setting voluntary targets for inclusive workplaces; and
  • collecting baseline data to monitor progress and improve outcomes.

Patterson believes it will also be crucial to facilitate transitions to retirement as workers get older and potentially take on less physical roles as they age.

“One of the things that we’ve got to be talking about is how to we help people plan for their transition to retirement.”

Cameron Cooper is a business journalist, blogger and editor

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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