Older Australians could be the beneficiaries of a plan to address a shortage of workers.
Federal opposition leader Peter Dutton has called on the government to double the amount that age pensioners can earn before their pension payments are affected.
Speaking with reporters, Mr Dutton said that lifting the Work Bonus amount at which pensioners begin to lose benefits from $300 to $600 could help alleviate the labour shortage facing businesses.
Currently, those receiving the Age Pension can earn up to $180 per fortnight for singles, and up to $320 per fortnight for couples, on top of the Work Bonus amount, before their pension payments are reduced.
“This is about those who want to work and do an extra day or two … and for it not to affect their pension,” Mr Dutton said.
“I really think it’s a policy that the Albanese government should pick up because the economy demands it now.”
Read: Retail body pressures government on Age Pension work rules
Mr Dutton said Treasury had costed the plan at around $112 million annually, and it would be reviewed each year if implemented.
In a rare show of potential bipartisanship, new Treasurer Jim Chalmers told the ABC’s Insiders program that his government was open to the idea of easing the rules, but he had concerns about the cost of the program.
“When it comes to this issue, I’ve had good, productive conversations with National Seniors and others about whether or not we can do something here,” he said.
“The truth is, in a budget which has got that trillion dollars in debt, we’ve got to weigh up all of these ideas and work out where we can get the best bang for buck.
“Because even an idea like this, which appears to be relatively modest, it still comes with a relatively hefty price tag.”
Mr Chalmers said the idea would be on the agenda at Labor’s ‘jobs summit’, set to be held sometime before the October Budget.
Business groups applaud the plan. Innes Willox, chief executive of national employer association the Ai Group, says encouraging older Australians back to work will bring decades of experience back to the economy.
“Tens of thousands of Australians now receiving a pension can potentially make a huge contribution to the workforce with their skills, experience and mentoring,” he says.
“Our policy settings need to move with the times and allowing older Australians to work more is one way of easing the labour pressures on business.”
Employers may say they support older workers returning to work, but are businesses willing to hire them?
EveryAGE Counts campaign director Dr Marlene Krasovitsky welcomes initiatives to break down structural barriers to older people working, but says we also need to break down attitudinal barriers given the prevalence of ageism among employers.
“Recent research by the Australian HR Institute revealed 47 per cent of Australian businesses say they are reluctant to recruit workers ‘over a certain age’,” says Dr Krasovitsky.
“For more than two-thirds of the group admitting to ageism, that ‘certain age’ was over 50. So the chances of an over-65 getting a fair go in a job interview is extremely slight.
“If we want to harness the unquestionable value of over-65s in the workforce, we need to look ageism squarely in the face, admit that it’s a problem, and work hard to break it down.
Are older workers getting a ‘fair go’? No, and that must change, study finds.
New research into the treatment of older workers shows that many mature-age employees report experiencing discrimination in the workforce due to their age, and believe they are not receiving the same opportunities provided to other workers.
The research found there are more instances of older employees being laid off compared to their younger colleagues, while a stigma remains around their competency with technology and openness to change. Older women in non-managerial roles, working part-time or on a casual basis are more likely to report experiences of aged-based discrimination.
The research is part of a joint initiative by the Council on the Ageing (COTA) NSW and Challenger and is aimed at addressing the underemployment of people over 50. Importantly, the research considers the issue from the perspective of both Australian employers and employees.
“Australia’s mature-aged workforce is skilled and able – and older people are healthier than at any other time in history,” said Meagan Lawson, chief executive officer of COTA NSW. “But due to stigma and discrimination, there are fewer employment opportunities for people aged over 50.”
Key takeaways from the research include:
Many employers are unaware of age discrimination in the workforce but are willing to do something about it once it has been identified.
Businesses need support to understand how they are tracking, and the steps they can take to improve employment of mature workers.
Older workers believe a change in attitude by employers would help them financially and emotionally.
There’s a great diversity within mature-aged workers.
Ageing of the workforce is a critical challenge for the economy. In 1976, there were seven working people for every non-working person. In 2016, that had fallen to four to one, and according to the NSW Intergenerational Report, it will be two to one by 2056.
The benefits to individuals and the community go well beyond finance. Workforce participation is linked to better health outcomes and other positive well being indicators. But the research shows many mature age workers feel they don’t get a fair go, with excuses ranging from over-qualification and younger managers feeling threatened, to poor cultural fit and being bad for the corporate image.
“There is significant value to individuals, the community and the economy in supporting older people to work as long as they wish,” said Challenger chief executive officer Richard Howes. “Increasing workforce participation for older Australians will not only help improve overall well being but also contributes to financial security for a better retirement.”
Half the employers surveyed for the research believed they were doing enough to support older workers. While most employers have general workplace bullying, discrimination and equal opportunities polices in place, only a minority had specific policies that covered age discrimination in detail.
“Older workers should be more valued for the expertise, skills and experience they bring to the workplace, and building awareness around the issue of age discrimination with employers and employees of all ages is a key opportunity,” Ms Lawson said.
COTA NSW and Challenger are developing a toolkit to help employers implement age-friendly practices. It includes improved education for managers to address unconscious bias and improve hiring practices, as well as programs to help promote flexible working arrangements and anti-age discrimination policies. The toolkit will be available later in the year and will include initiatives to forge stronger connections between workers of all ages within an organisation and how to better train mature-age jobseekers.
“While not all older workers are the same, some uniform initial steps should be taken to address the issue of age bias,” Ms Lawson said. “There needs to be better education and training, more rigorous internal policies and structures, greater cross pollination among workers, and better access to job opportunities for older workers.”
The share of the workforce aged 55 or over may be increasing, but that doesn’t mean older Australians are not facing significant barriers and discrimination.
A new national survey has revealed that ageism is on the rise in Australia, with 37 per cent of over-50s now reporting having experienced ageism, which was up from 33 per cent in 2018.
The Council on the Ageing’s (COTA) State of the Older Nation report also revealed 26 per cent of respondents had experienced employment-related discrimination since turning 50 – up from 22 per cent in 2018 when the last survey was conducted.
However, older Australian advocacy group EveryAGE Counts believes the figures from the COTA study show that ageism is becoming a “national crisis”.
EveryAGE Counts campaign director Marlene Krasovitsky said these worrying trends show that ageism is no longer an issue that can be ignored.
“Too many are accustomed to laughing off incidents of ageism as relatively trivial, but we know it’s doing real damage to millions of Australian lives,” Ms Krasovitsky said.
“The fact that 37 per cent of Australians over 50 have been discriminated against should be considered a national crisis. And to see ageism on the rise since 2018 is particularly alarming.
“Most Australians are living longer, healthier lives. Yet ageist attitudes and practices continue to exclude, diminish and marginalise older people. Workforce discrimination, for example, hurts not just older Australians, but the entire community and our economy.”
Ms Krasovitsky said until people started recognising the problem, ageism would continue to rise and that could have a serious impact on people’s health.
“Changing social norms is never easy, but it starts with acknowledging the problem as serious,” Ms Krasovitsky said. “We need to stop shrugging off incidents of ageism and start calling them out.
“The World Health Organization recently found older people who hold negative views about their own ageing will live 7.5 years less, on average, than those with positive attitudes.
“How can you not develop negative attitudes when over a third of Australians over 50 are being discriminated against, and the rest of us are forced to see and hear ageist views on a daily basis?”
While the State of the Older Nation report had some alarming figures on age-based discrimination, it also showed that only 49 per cent of those aged 65 had retired, which was down significantly from 2018 when 60 per cent had retired.
Also, the proportion of people aged 65 to 69 who said they wanted more paid work has doubled from 2018 (15 per cent to 31 per cent)
Those figures may reflect that the Age Pension eligibility age has also changed in that time, but does also demonstrate that older Australians are staying in the workforce longer, but are not getting as much work as they want or need.
According to the survey, 25 per cent of those who are still working do not think that they will ever retire, which was up slightly from 24 per cent in 2018.
It is hard to know exactly how many older Australians plan on returning to work.
As Australia’s vaccination rate heads towards meeting important targets, economists are no clearer on how the shockwaves caused by the COVID-19 pandemic will play out in the months to come.
There are fears that as business slowly starts to pick up around the country, growth will be slowed by a significant labour shortage, with many older workers, who may have lost work, choosing not to return to the workforce.
A CommSec Economic Insight analysing detailed labour force data has found that lockdowns in NSW and Victoria have scrambled the figures, but appear to point to many older Australians not returning to the workforce.
The report explains that prior to the pandemic, one of the major reasons that Aussies were not employed or looking for jobs was that they had retired and were out of the job market.
In April 2018, a record 38.7 per cent of people aged 65 and over said that they were ‘permanently not intending to work’, which was a significant increase from the 33 per cent that answered that way in September 2014.
Prior to COVID-19, the figures showed a reassessment, with the proportion of those not in the workforce because they were retired falling from 38.7 per cent to a three-year low of 35.3 per cent in July 2019.
The effect of COVID hitting shortly after this change has made it impossible to determine if this was the start of a trend, the CommSec economists explain.
That is because more people left the job market over lockdown periods because they were not employed but were not looking for work because they were likely to return to their employer when businesses reopened.
That meant that the proportion of those not in the workforce because they were retired hit a record 39.9 per cent of the total in June 2021 and this has since fallen to a low of 36.4 per cent in September 2021.
CommSec’s chief economist, Craig James, explains that working out why people are not in the job market will be important in the coming months.
“If more people are electing to retire, then there are fewer potential workers to fill positions,” Mr James said. “That may mean the job market tightens more than generally expected, putting upward pressure on wages and prices. And that is especially the case if foreign borders stay closed.
“Older Aussies may see greater health risks in being in the job market in the COVID era. And still others may elect to live large given the experience of the past 18 months.
“At this stage data still shows that older Aussies are active in the job market with record participation levels. However, peak levels may not be far away.”
Mr Elliott explained that ANZ had found older workers more effective in customer service roles and better able to empathise with customers in difficulty due to more life experience than younger workers.
In November last year, a research discussion paper commissioned by Sustainable Population Australia (SPA) said that the proportion of workers over 65 would settle at around 28 to 33 per cent and that over-65s would never outnumber younger adults.
New research of Australia’s older workers has found that experiences of age discrimination in the workplace have almost doubled in the last five years.
According to the Australian Seniors Series: Ageing in the Workforce 2021 report, one in five workers (20.7%) aged over 50 has encountered age discrimination in the workplace – twice as many compared to 2016 (9.6%). Just over 40% say they have felt patronised in the workplace because of their age.
Despite the prevalence of ageism, more than three quarters of Australians aged over 50 want to keep working indefinitely and almost 90% of retirees plan to re-enter the workforce. Finance was identified as the biggest reason, followed by missing their job, boredom and a lack of social connection.
Speaking at a recent virtual roundtable, attended by HRD, industry experts discussed the new findings, sharing common misconceptions and ways to address ageism in the workplace. Tai Mavins, social research expert and consulting partner at Mymavins, said the events of the past 18 months have made things even more difficult for older workers.
“Over one in two seniors feel that Covid has made it harder to get work, and close to one in five feel that recent events have impacted their retirement plans, so it’s bringing a lot of uncertainty into their working life,” Mavins said. “In response to this, we actually see that one in four seniors admit to trying to make themselves look younger in the workplace or when they’re applying for jobs. That includes things from dying their hair, wearing the latest fashion, getting the latest haircut and makeup styles.”
Older workers are also becoming increasingly proactive at upskilling to keep up with advancing industry trends, with many branching out into new career paths.
“We found that close to three in five seniors plan to or already have reskilled or sought further training to improve their prospects since turning 50,” Mavins said. “What’s probably most interesting about that is as many as half of those people who are looking to reskill have done that in new areas, so they’re really expanding their horizons and moving beyond past roles.”
The research shows that the appetite to work and to continue learning is there. Like many nations, Australia has an ageing population, and the rising cost of living means people are working till later in life. So how do HR leaders address the causes of age discrimination and foster a truly inclusive workplace?
Humphrey Armstrong, an organisational psychologist at Lifelong Learning, said much of the problem stems back to commonly held misconceptions, like older employees costing more, being more difficult to train, or being resistant to change.
“I think one of the fascinating things is that emotional intelligence, or emotional capabilities actually increase with age well into a person’s 70s,” he said. “In terms of resistance to change, I think if older people know why change is needed and how to change they are prepared to jump on board.”
Armstrong pointed out that twice as many start-ups are initiated by over 50s than people in their twenties. Clearly, there is a huge amount of value in the learned knowledge, intuition and life experience of an older worker. But for a workforce to be inclusive of all ages, ageism needs to be more widely talked about, Armstrong said.
“We hear a lot about gender diversity, especially over the last few months, but in fact, age diversity is often ignored. We’ve got to actually bring that in and really reinforce the issue,” Armstrong said. “Research studies show that diversity is an incredible advantage in organisational life, it increases profitability, creativity, enhances governance, and it also enables better problem solving.
“And as mentioned, emotional intelligence can increase with age so there’s this huge resource where older people are, in fact, very valuable and very skilled at handling tricky interpersonal problems and generally they are better able to cope with ambiguity.”
Lisa Sinclair, editor-in-chief at DARE Magazine, said she’d like to see more organisations introducing policies to support women going through menopause and acknowledge the pressures on the “sandwich generation” who may be supporting both elderly parents and older children. There are also simple measures to improve inclusivity during the recruitment process.
“I would love it if companies in general stopped advertising for unicorns, which are these mythical creatures that have 15 different boxes to tick,” she said. “I mean that’s hard enough for any age but I think it could be particularly confronting for the over 50s who might be put off for applying for jobs just because there’s one element they don’t meet.”
It’s a question Tracey Ward has been asking herself a lot lately.
The 56-year-old is a self-employed life coach for women, but has seen her income dry up due to the pandemic.
She’s surviving off JobKeeper payments, but when the subsidy is scrapped in March, Ms Ward is afraid she will “really struggle”.
She knows she could get some sort of work – “there are organisations like Bunnings who hire people of all ages”, she said – but she wants something different for herself and fears the lack of attention from the federal government on her age group could signal the end of her career.
While the government has focused on the high levels of youth unemployment borne out of the pandemic, middle-aged, mid-career workers say they have been forgotten.
The unemployment rate for Australians aged over 40 was 3.8 per cent in January 2020 and grew to 5.2 per cent in July before recovering slightly to 4.7 per cent by October.
Some of those stuck unemployed say they are dumbing down their resumes to appear less threatening to potential new employers; others, like Ms Ward, wish funding could be funnelled into upskilling rather than hiring incentives based on age.
‘If you’re 40-plus and a woman you just don’t get a new job’
Sheena Gulati was told many times in 2020 that she was “overqualified” for a role.
The 43-year-old lives in Sydney with her husband and two children.
Before the pandemic hit, she was working as a part-time contractor in accounting and finance.
Of all the reasons to be rejected from a job, being “too experienced” wasn’t something she expected to hear.
“They want someone who is young because I think they think overqualified people will ask more questions and tell them how to do things better,” Ms Gulati said.
She suspects her qualifications have little to do with it.
“It’s your age they’re talking about,” she said.
Ms Gulati felt the competition within the jobs market ramp up, and said she is surrounded by friends and family in their 40s who are struggling to secure work.
It’s become so tough she’s considering a career change.
“I have been thinking about it, but it would be a fresh start. It’s scary. I have been in this line of work for a really long time, my qualifications are in this so it will be hard starting afresh,” she said.
“If you’re 40-plus and a woman you just don’t get a new job.”
Her mortgage, other household bills and the expense of raising two children is beginning to bite and Ms Gulati says she’s frustrated the government appeared to forget about middle-aged Australians.
“Why does the government want to give more benefits to elderly people over 65 but not us? What do you do between 35 and 50? Where do you go? What do you want us to do?
“I think it’s unjust – your partiality is based on age. Why? I have no idea.”
Need a job? Learn to ask
Career practitioner Lois Keay-Smith has been coaching people looking for a new job for years, and primarily helps people aged 30 to 60.
She said, surprisingly, the pandemic appeared to be the last straw for people looking for a career change.
“It’s highlighted aspects of their work they don’t like. It’s given people some freedom to say, ‘I wasn’t happy anyway and with all these changes I want to go and do what I want to do’,” she said.
Ms Keay-Smith said older workers “definitely” faced challenges, like adapting to a new work environment where competition for jobs was high.
“I find some mature work-seekers fall back on what worked for them last time, but it doesn’t work because there are so many more eyeballs on job ads,” she said.
“But an advantage they have is they have good networks; they’ve been in the workforce and often the work I do is help them activate that network.”
Ms Keay-Smith says one of the best pieces of advice she has is: learn to ask.
“I call it the rise of the returnee – going back to a company you used to work for by tapping into those colleagues you used to work with before,” she said.
“There used to be a stigma around that – you never go back – but that’s changed and both of these things around people are more accepting that things change in organisations quite rapidly.”
Ms Keay-Smith also says she’s heard the ‘overqualified’ response quite a lot when it comes to mature workers.
“[The company’s] main concern is that you are using the job as an entry point,” she said.
“They feel you are not going to stay because it’s not fulfilling and you might get bored.”
Her advice for people who do want to scale down their role is to be honest.
“If you know you are going to get the overqualified response, you do have to address the elephant in the room and say why you are attracted to this role.
“It’s about positioning yourself as a stayer or someone who can contribute a lot in a short space of time.”
Ms Keay-Smith’s top career advice is:
Use your networks.
Get comfortable being on camera. Practise interviews on Zoom with a friend.
Don’t be afraid to go back to a company you used to work for.
Get up to speed with the latest interview techniques.
Older workers want to upskill
While Ms Ward believes an incentive to hire young people is great, she says helping people who are mid-career would have a greater benefit overall.
“Younger people have time to try things and fail and learn from it, but it becomes more scary when you’re older and have a mortgage to pay and have no back-up plan,” she said.
“You’re very conscious of your superannuation for retirement.
“I am very proud to be a woman in my 50s, but I know women who don’t let their hair go grey because if their company finds out how old they are they go in the redundancy pile.”
Just like Ms Gulati, Ms Ward has heard employers say they don’t want to hire qualified, older workers because they are afraid they will “make waves”.
She has friends who have pared back their resumes after being told they are “too experienced” for a role.
“It’s desperate and very real for many especially women; grey-haired men are classed as distinguished and experienced whereas grey-haired women aren’t. We are not revered for our wisdom.”
Ms Ward doesn’t just want to be hired, she wants to upskill to remain relevant in the ever-digitising workplace.
“Everything is going online and into a digital space so fast and some older people are being left behind because there’s no time or money to reskill,” she said.
“I have just spent the past hour trying to work out how I record myself whilst I’m recording a presentation on the Mac, so there’s endless [challenges].”
Sometimes she laughs it off. Other times it’s overwhelming.
Ms Ward said an upskilling program where companies provide pro-bono work for older people to learn digital skills would go a long way, and be much more helpful than just being hired by a company because there’s a monetary incentive.
“I’m not talking about someone from Centrelink showing me how to do it for half an hour on video. I’m talking about someone who is at the head of their game getting a tax incentive to help me step up my business,” she said.
“And then I could employ people so it could be a win if other companies were encouraged to help people like me because I don’t have the funds to do it myself.
“I don’t want a free handbag. I want my business to be really successful. I’d happily be the pilot for it.”
Have you been rejected for a job because you are ‘too qualified’? Does the system discriminate against older Australians?
In the space of five years, Liz Clifford has lost her husband to cancer, her office job and now her home.
At the age of 60 she finds herself struggling to get by on Newstart unemployment benefits.
“Very disappointed with life,” she told 7.30.
“It wasn’t his fault that he got sick and died, but after losing my job I don’t have the income now to support living here — rates to pay and bills to pay.
“I don’t like to say it’s destroyed my life, but it’s certainly torn it apart.”
Ms Clifford is part of a worrying trend. The number of people aged 55-64 on Newstart has risen by more than 55,000 in less than five years.
“It’s been very difficult. It makes you feel quite worthless actually, like you’ve got no purpose in life,” she said.
“I feel a little bit insulted and I feel like I’ve been punished for being unemployed.”
She lives on about $50 a day and has been forced to sell her and her late husband’s dream home because she can no longer keep up with repayments.
‘I’ve got a lot to offer’
Newstart has not increased in real terms for more than two decades, and the Federal Government is resisting calls to lift the payment.
“Electricity’s not cheap, water rates and house rates aren’t cheap,” Ms Clifford said.
“I get my Centrelink payment every fortnight and that just goes straight onto my credit card.
“Because I’ve used the redraw facility on [the mortgage], it’s gone up but I’ve tried to be very careful with that.”
Ms Clifford currently works part-time at a Gold Coast boarding kennel but is planning a move to Ipswich to find a cheaper home and full-time office work.
“I think people probably want someone who’s 35, 40 or something like that or maybe even younger.
“I know I’ve got a lot to offer, I’ve got a lot of skills and I’ve worked for a long time and I’m quite computer literate, but I think people just think, ‘She’ll be wanting to retire in a couple of years’ time, so it’s not worth taking her on’.”
More programs needed for mature age workers
Labour market analyst Professor John Spoehr said the sharp rise in the number of over-55s on Newstart was due to a downturn in traditional industries and a crackdown on eligibility for disability support payments.
“Despite the Australian unemployment rate being relatively low, that masks some other problems in the labour market,” he told 7.30.
“In particular, the difficult circumstances that mature-age workers face, particularly because of the decline in mining and manufacturing.
“People who were skilled in those sectors had to find jobs in very, very different areas of the labour market, predominantly in the services sector where they weren’t well skilled.”
Professor Spoehr said a poor education was hurting some workers in the modern employment landscape.
“Typically, mature-age workers, baby boomers in particular, often require more support than a lot of other workers in the labour market that are struggling,” he said.
“I think there’s a need for an expansion of mature-age employment programs in Australia to support mature age workers through these difficult transitions.”
Living on $40 a day
Phillip Cacciola, 61, has a lifetime of experience on the factory floor.
“My first job [was] cabinet maker, then I got a job at Holden, biscuit factory, steel fabrication,” he told 7.30.
“Then I got a job at Copperpot pate and dip factory. I was there for 10 years.”
He is now unemployed and believes his reading and writing skills and age are stopping him from finding work.
“Everything is on the computer,” he said.
“When you put a job application in you’ve got to put it in the computer. I can’t do that. Simple as that, I just can’t do that.
“If they put me on a forklift and show me what to do I’d probably pick it up after a while. You’ve got to go through the paperwork and safety and stuff.
“I know the safety stuff but you still got to write it down, that’s my biggest problem.”
Mr Cacciola said he had personally sought out courses to improve his reading and writing skills but wanted the Government to help more in this area as well as increase the Newstart payment.
He lives on about $40 a day.
“Sometimes I get cranky when I hear things about the politicians,” he said.
“They’ve got no problems paying the electric bills, they’ve got no problems paying anything.
“If they want to buy something they can get money out of the bank and buy it. I can’t do that.”
“That’s quite a long way from retirement! We know diversity positively impacts innovation, culture and profits, but often age diversity has less focus.”
Eatwell said there are many advantages to employing older adults, particularly in positions where experience and leadership are needed. However, this doesn’t seem to be translating into more opportunities for older Australians.
“I think this has to do with trying to fit workers into traditional organisational structures – by exploring more agile, networked and outcome-oriented structures it can not only improve diversity but also productivity.”
Eatwell offers a few tips for HR professionals who want to boost the number of older Australians amongst their staff.
The starting point should always be a “thorough assessment of the recruitment process” to identify and mitigate where age discrimination could arise.
“One of the key traits we assess is learning agility – in a nutshell, the ability to pick new ideas up quickly,” he said.
“Research suggests that although you can make small improvements to your learning agility, it is more or less fixed and is not dependent on age.”
Consequently, choosing candidates based on learning agility can help add some objectivity to the hiring process.
From there it’s about developing a culture of lifelong learning. Mature employees have a huge amount of experience to share which can be “leveraged to increase overall productivity and morale”.
“Also I’ve seen reverse mentoring work very well, reducing knowledge gaps with both younger and more mature workers, as well as improving organisational culture.”
So what is lost by having nobody senior around?
“Often it’s the times of crisis when calm is needed, or when team morale is affected by a failed project, that age diverse workforces show critical value,” said Eatwell.
“We do a lot of ‘learning by doing’ and that includes what to do when things do not go according to plan.”
Eatwell added that leadership is a quality that is not tied to age, but the “reassurance of someone who has seen a crisis and worked through it to tell the tale” can be invaluable in making sure the right work gets done in these high-pressure moments.
Sometimes, the only senior person on a project is the boss, and employees are reluctant to confess an error that can lead to disaster if unaddressed, he added.
“Having a senior member of the workforce who can act as that neutral-confidant, and know what to do with the information, has considerable value.”
Employees from diverse ages have different experiences, perceptions and approaches when it comes to things like problem-solving, decision making and task handling, he said.
“They can also use various strategies – starting from the way they think, plan and execute tasks, which can influence operations in a more subtle, but still valuable way.”
People are living longer, and organizations are shifting their attitudes toward older workers as a result. Organizations that can turn advancing worker age into an asset could gain a competitive advantage.
Longer lives, older workforces
Rising life expectancies and an aging global workforce present organizations with unprecedented challenges and untapped opportunities. Companies that plan, design, and experiment with workforce strategies, workplace policies, and management approaches for longer working lives can reap a longevity dividend. Those that lag behind face potential liability concerns and skill gaps. Creating ways for people to have meaningful, productive multi-stage and multidimensional careers is a major opportunity to engage workers across generations.
One of modern science’s greatest achievements is longevity: the unprecedented length of human lives today. Average global life expectancy has rocketed from 53 years in 1960 to 72 years in 2015—and it is still climbing,1 with life expectancy projected to grow by 1.5 years per decade.2 Longevity, combined with falling birth rates, is dramatically increasing the share of older people in populations worldwide.3 Looking ahead, the number of retirees per worker globally is expected to decline from 8:1 today to 4:1 in 2050.4
These demographic facts have profound implications for individuals, organizations, and society. In this era of longevity, an individual’s career can last far longer, spanning generations of technologies and businesses. Companies can employ people into their 60s, 70s, and beyond as the pool of traditional “working-age” (20- to 54-year-old) adults shrinks. For their part, many individuals find the need—financially and/or emotionally—to stay in the workforce past “traditional” retirement age.
In our 2018 Global Human Capital Trends survey, 29 percent of the respondents rated longevity as a very important issue, and another 40 percent rated it as important. Respondents in Japan in particular, whose population is rapidly aging, were especially concerned about the issue, with 41 percent saying that it is very important.
The looming impacts of global aging
Population aging poses a workforce dilemma for both economies and organizations. Thirteen countries are expected to have “super-aged” populations—where more than one in five people is 65 or older—by 2020, up from just three in 2014.5 These include major economies such as the United States, the United Kingdom, Japan, Germany, France, and South Korea. China’s 65-and-older population is projected to more than triple from approximately 100 million in 2005 to over 329 million in 2050.6 In fact, analysts have estimated that 60 percent of the world’s population over 65 will live in Asia by 2030.7
Compounding the challenge, almost all developed economies now have birth rates below the replacement rate of 2.1.8 This means that companies in these countries must either attract workers from abroad or tap into the maturing workforce. For a view of the challenges ahead, one needs look no further than Japan—the world’s oldest country—where a shortage of roughly 1 million employees in 2015 and 2016 is estimated to cost nearly $90 billion.9
New research is being conducted to help organizations shape their talent and business strategies for an era of longevity. The MIT AgeLab, for example, works with businesses, government, and other stakeholders to develop solutions and policies aimed at engaging the elderly population. The AgeLab uses consumer-centered thinking to understand the challenges and opportunities of longevity in order to catalyze innovation across business markets.10
Older talent as a competitive advantage
As talent markets grow more competitive, organizations often find it valuable to keep older workers on the job rather than replace them with younger ones. Our research shows that older workers represent a largely untapped opportunity: Only 18 percent of this year’s respondents said that age is viewed as an advantage in their organization. But leading companies are beginning to focus on this talent pool as a competitive advantage.
The older labor pool represents a proven, committed, and diverse set of workers. More than 80 percent of US employers believe that workers aged 50 and more are “a valuable resource for training and mentoring,” “an important source of institutional knowledge,” and offer “more knowledge, wisdom, and life experience.”11 The UK government incentivizes employers to retain, retrain, and recruit older workers, and it is committed to policies that support lifetime learning and training and decrease loneliness and social isolation.12
Proactive organizations are tapping into the older talent pool by extending their career models, creating new development paths, and inventing roles to accommodate workers in their 50s, 60s, and 70s. This year, 16 percent of the respondents we surveyed for this report say their companies are creating special roles for older workers, and 20 percent are partnering with older workers to develop new career models. Organizations could find great value in older workers’ ability to serve as mentors, coaches, or experts. Taking on these kinds of roles allows older workers to “pass the baton” to younger generations, while making room for ambitious younger workers.
Many companies are also experimenting with workplace changes to help older employees remain in the workforce. For instance, BMW increased productivity on an assembly line staffed with older workers by 7 percent in just three months through simple changes such as providing cushioned floors and adjustable work benches.13 Home Depot and other organizations are engaging older workers with flexible scheduling options and part-time positions.14 Further, as many as one-third of retirees are willing to work part-time, offering opportunities to leverage this group on a contingent or gig basis.15
Reskilling also plays a role in successful strategies to utilize older talent. One global telecommunications provider encourages senior workers to reinvent themselves and invests in programs to help them acquire new technical skills.16 Software engineers who have built careers on older technologies such as COBOL or C++ can use this experience to learn mobile computing, AI, and other technologies at a very rapid rate.
An interesting and little-known fact, moreover, is that older people are among the most entrepreneurial of workers across age groups. Between 1996 and 2014, the percentage of older workers (aged 55–64) starting new ventures increased—exceeding (by 68 percent) the rate of entrepreneurship among millennial entrepreneurs (aged 20–34), which actually decreased during the same period.17
The new challenges of an aging workforce
The transition toward older talent can present challenges. Older workers may have specialized workplace needs and can attract resentment from younger workers, and they often enjoy higher salaries because of their tenure. Organizations looking to assimilate an older worker population may face the need to design new wage policies, create more flexible rewards programs, and train young leaders to manage people across generations (including team members who may be their parents’ age).
Pensions are another area where longevity impacts organizations. The World Economic Forum estimates that a $70 trillion global retirement savings gap exists today, highlighting the sharp difference between retirement needs and actual retirement income. Moreover, this gap is projected to grow to $400 trillion by 2050.18 Helping older adults to work longer and manage their retirement savings will be a vital need for companies in order to avoid the negative productivity effects of financial stress.
Our Global Human Capital Trends research shows that many organizations are unprepared to deal with the aging of global workforces. Nearly half of the respondents we surveyed (49 percent) reported that their organizations have done nothing to help older workers find new careers as they age. Rather than seeing opportunity, 20 percent of respondents view older workers as a competitive disadvantage, and in countries such as Singapore, the Netherlands, and Russia, this percentage is far higher. In fact, 15 percent of respondents believed that older employees are “an impediment to rising talent” by getting in the way of up-and-coming younger workers.
Are older workers an advantage or a disadvantage?
Perceptions of workers over 55 years old spanned both extremes, though these perceptions varied significantly by country.
Based on these findings and our anecdotal observations, we believe there may be a significant hidden problem of age bias in the workforce today. Left unaddressed, perceptions that a company’s culture and employment practices suffer from age bias could damage its brand and social capital.
Age discrimination is already becoming a mainstream diversity issue and liability concern. More than 21,000 age discrimination complaints were filed with the US Equal Employment Opportunity Commission in 2016.19 The problem is particularly acute in Silicon Valley’s technology industry, where older software engineers are often pushed to take lower-paying jobs or look for work outside Silicon Valley because of the emphasis on the “youth culture.”20
The demographic math is undeniable: As national populations age, challenges related to engaging and managing the older workforce will intensify. Companies that ignore or resist them may not only incur reputational damage and possible liabilities, but also risk falling behind those organizations that succeed in turning longevity into a competitive advantage.
The bottom line
Staying competitive in a world of unprecedented longevity demands that organizations adopt new strategies to engage with older talent. Traditional assumptions—that learning ends in one’s 20s, career progression ends in the 40s, and work ends in the 60s—are no longer accurate or sustainable. Rethinking workforce strategies across multiple generations to account for longer lives will require open minds and fresh approaches.
What role does the C-suite play in capitalizing on
Workers and job seekers aged over 45 will be eligible for training programs to ensure they have the skills necessary to stay in the labour market for as long as they want instead of winding up on the unemployment scrapheap.
As part of the government’s baby boomers package, it will allocate $189.7 million over five years to assist mature-age workers adapt to the changing needs of the economy.
The bulk of the funding, $136.4 million over four years beginning in financial year 2019, will be available as targeted training for registered jobseekers to develop digital skills, enhance their employability and to identify job opportunities in local labour markets.
A Skills and Training Incentive, costing $19.3 million over three years, will provide as much as $2000 for workers aged 45 – 70 at risk of being made redundant through technological or economic change to undertake reskilling or upskilling. The worker or employer will have to match the funding.
A separate $15.2 million program – the Job Change Initiative – will be set up to outline career options for mature-age workers who are considering early retirement or facing redundancy.
The government will expand its Entrepreneurship Facilitators program, which promotes self-employment, to 20 additional locations at a cost of $17.7 million.
Recruiting and retraining
Incentives to hire a worker aged over 50 will be increased modestly by $1.1 million to provide additional wage subsidies for employers worth up to $10,000.
As part of the effort to keep Australians employed longer, workers will be able to undertake an online skills checkpoint when aged between 45 and 65 to provide advice to building their careers or transitioning to new industries.
As well as looking at workers’ employment history and qualifications, the checkpoint will look at their involvement in the community, such as volunteering, to see whether those skills would translate to a new career path.
By targeting workers aged in their late 40s, the hope is they will receive assistance to prolong their careers before running the risk of retrenchment, seniors advocates argue.
The government has flagged a need to drive cultural change and stop discrimination against older workers, promising to develop strategies in conjunction with business and seniors lobby groups.
“The government understands the importance of working with employers to ensure they understand the benefits of recruiting and retaining mature age people,” Jobs Minister Michaelia Cash said.
“We also need to support Australians most affected by our transitioning economy by providing opportunities for them to acquire the skills that will equip them for future opportunities and jobs.”