The challenge and opportunity of an ageing workforce

For the first time in history, we have four generations working together. We need to make the most of it.

By Professor Peter Gahan and Dr Joshua Healy, University of Melbourne

Professor Peter Gahan

Published 6 March 2017

The UN estimates that by 2050, one in three people living in the developed world will be over 60. In Australia, one in four people is older than 55 and over the next decade this will increase to approximately one in three. As our demography continues to shift, a key imperative will be to prolong paid workforce participation and reduce the dependence of the non-working population on the working population to a manageable level.

Ageing workforce rhetoric has widely discussed policy implications – the cost of healthcare, and impacts on the social welfare system, retirement savings and the broader economy – but important aspects of the ageing workforce have as yet been largely omitted.

Providing opportunities for different generations to work together will be vital to reduce negative perceptions of older employees. Picture: Shutterstock

As our working population gets older, government, industry, families and individuals will feel the pressure. But if we can deal with the issue constructively the pay offs will be big – reduced social welfare obligation, higher organisational productivity through the retention of skilled workers and greater personal fulfilment for older workers. The onus is on organisations, business leaders, colleagues and older individuals facing a longer stint in the labour market.

Human roles and functions are changing with the advancement of new technology, so experienced employees of any age will be required to re-skill or up-skill. Older employees face the added challenge of social bias and stereotyping, as well as potentially deteriorating health and family expectations.

Contending with bias

As part of the University of Melbourne’s Hallmark Ageing Research Initiative, the Centre for Workplace Leadership is in the early stages of investigating perceptions of older people in society and in the workplace. The sample includes people aged from 18 to 70, providing unique insight into not only how younger people feel about the older generation, but also how older people feel about their place in society.

Different experiences and outlooks could give rise to increased interpersonal conflicts at work. Our research looks at how we manage this. The first step is understanding attitudes towards older workers and the second is investigating how we shape these attitudes.

International research shows that attitudes are based on stereotypes – older workers are less motivated, harder to train, more resistant and less adaptable to change. These, like many stereotypes, are inaccurate. In fact, even the definition of what constitutes an older worker is unclear, with definitions ranging from over 40 to over 60.

Older workers often also hold these stereotypes themselves, compounding to negatively impact workplace participation and creating a culture of division.

People who think of themselves as old are more likely to leave the workforce. Picture: www.aag.com/Flickr

This bias exists in the selection and recruitment process, resulting in barriers to entry for older people. According to the Australian Human Rights Commission, over one quarter of Australians over 50 experienced some form of age discrimination in the previous two years and four in 10 organisations admit they wouldn’t employ someone over 65. People who think of themselves as old are more likely to leave the workforce.

Age is more complicated than chronological years. Organisations need to be transparent and ensure their recruitment and performance systems are fair and bias-free. Quality contact between generations has been shown to reduce negative perceptions and reduce intent to quit among older workers so providing opportunities for generations to work together is also vital.

Redefining career and life goals

The dream of retiring and living out the remaining days by the beach will become just that for many. In reality, most won’t be able to afford to retire until eligible for the age pension – receipt of which will likely continue to be delayed over the coming years. We need to face the reality that working life, for most of us, will be a lot longer than we expected.

It’s becoming harder for many older people to live out their retirement dreams. Picture: Unsplash

As automation and new technology change the way we work and even the places in which we work, we need to reframe how we think about our careers and our role within a company. We may need to combine study and work or move sideways in our careers. This brings with it the potential for a more varied career but that requires adapting to a new vision of success. With more disruptive change imminent, more flexible work practices – full-time and part-time options, flexible hours and operating conditions – are required.

Another consideration which is often overlooked is the fact that early retirement may not be a dream scenario for everyone. There are significant health and wellbeing benefits to staying actively involved in the workforce so we need to enable those who can and want to continue working to do so.

Adaptation and productivity

According to the Intergenerational Report, Australians are living longer lives but they are also healthier for longer. However, the majority of Australians have a less than 50 per cent chance of still working between the ages of 60 and 74.

A homogenous approach to health and wellbeing practices just doesn’t cut it. The effects of ageing differ greatly from person to person; we can’t make assumptions about physical capability based on age.

If a worker can no longer fulfil the requirements of their job, the role should be tailored to ensure the knowledge and expertise of the older worker is retained. Organisations need to evolve if they want to retain older workers in productive employment without demanding too much of those who are either unable to work into their later years or are trained to perform roles involving daily tasks that compromise their own wellbeing, or may put others at risk.

On the other hand poor health may mean retirement is the only option for some. We need to be financially prepared for this by consciously managing our super and other savings from a younger age. Policymakers may need to consider variable age pension options.

There are also social implications to remaining in the workforce longer and families will need to adapt. According to the Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) Survey, as the cost of childcare increases, families are relying more heavily on grandparents as carers. Nearly one-quarter of couples with children under 13 have grandparents care for their children for approximately 15 hours per week.

There are significant policy considerations, but organisations and employees also need to take responsibility and play their role in the transition to an intergenerational workforce.

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