aged workforce myths

It’s no secret that workplace demographics have changed. For the first time, we now have up to five generations in the workplace at the same time. We’re increasingly living, working and staying healthy for longer. This means chronological age is no longer a useful marker of work capacity — studies show that overall productivity doesn’t fall away over the normal working age range, although (as you’d expect) younger and older people do have different skills.

Some employers capitalise on these trends. People often cite hardware chain Bunnings as a standout employer of experienced workers, but it is not alone. As part of the Australian Human Rights Commission’s 2016 age discrimination report, Willing to Work, we compiled an employer resource, Good Practice Examples. The AHRC website also has numerous older worker case studies. For example:

  • Forest Coach Lines focuses on worker health initiatives to encourage drivers to remain at work for longer. These range from free fruit to pedometers and chiropractic visits.
  • Accor Hotels Australia has run a successful experienced workers program with training and work placement.
  • Westpac Group has a range of flexibility strategies to support “Prime of Life” employees aged 50-plus. NAB and the Commonwealth Bank of Australia also have targeted programs.

Driving change

Recognising that the ageing profile of its factory workforce had the potential for negative impacts from early retirements and loss of productivity, BMW in Germany developed an innovative pilot program. They staffed a production line with people of an average age of 47. Working closely with these employees and supported by technical experts, they tested changes such as health care, skills programs and improving the workplace environment.

Some were physical — softer flooring, adjustable work stations, better footwear, ergonomic tools. Others were process-driven — task rotation during shifts, and daily strength and stretching exercises. Direct project investment of roughly $50,000 delivered a seven per cent productivity increase in the first year. Sick leave fell from seven per cent to less than two (lower than for non-pilot workers) and defects dropped to zero. Similar projects have since been successfully implemented at other BMW sites.

At the other end of the spectrum, a small car yard in the New South Wales Illawarra region had a personnel problem. It sold and serviced high-end vehicles that often had to be chauffeured back to their owners. The company needed a flexible team of drivers who would show up when needed and drive safely — which meant not test-driving the cars on the freeway before they reached their destination. After a few false starts, they settled on a team of older workers who wanted flexible work. The six drivers created their own roster, guaranteeing two of them were available every day — accommodating their desire for flexibility with the ability to do valued work. And there were no more complaints about damaged cars being returned to owners or speeding tickets showing up in the post.

Two companies, but two quite different tailored solutions.

Living Longer

84.1 Average male life expectancy (3-year increase 1998–2012)

87 Average female life expectancy (2.2-year increase 1998–2012)

Living Healthier

4.4 Extra disability-free years gained by men 1998–2012

2.4 Disability-free years gained by women in the same period

Working Longer

14% of workers were aged 65+ in 2016 (compared to 9.4% in 2006)

21% of Australians aged 65–74 are still working

Source: ABS, PwC, Australian Institute of Health and Welfare.

Better for Business

However, not all employers appreciate the value of experienced workers. In April 2015, the AHRC released the first national prevalence survey of age discrimination in the Australian workplace. The report indicated that 27 per cent of people over the age of 50 had recently experienced workplace discrimination (data replicated in a 2017 South Australian study). And several recommendations of the Willing to Work report covered companies exposing ageist practices and building a robust framework to prevent ageism.

Older worker programs are often put in the diversity bucket, which is understandable —having a workforce with a mix of ages, gender, backgrounds and skills helps demonstrate strong corporate values. But employing older workers is also very good for business, in terms of the skills and knowledge they bring, and also the lift to the overall workforce participation rate.

Participation Counts

Australia actually has a lower percentage of older people in the workforce than many other developed countries. The 2016 PwC Golden Age Index named the top three countries for workforce participation by over-55s as Iceland, New Zealand and Sweden. Australia ranked 16th behind the US, UK and Canada. PwC calculates that if we were to raise our employment of over-55s to match Sweden, the Australian GDP could be around 4.7 per cent higher, equivalent to about US$69 billion a year (at 2014 values).

The idea that older workers take jobs from the young is known by economists as the ‘lump of labour’ fallacy.

Four ways boards can shift culture

The board can play a valuable role in fostering a culture where workers of all ages are valued and can contribute. Questions for directors to ask management include:

  1. Hiring practices
  2. Hiring is a core area of discrimination, although unconscious bias plays a significant role and it can be difficult to tease out underlying attitudes.

    • How many workers over 50 do we employ?
    • How many have we hired in the past year?
    • Do we take age into account when hiring?
    • Is there an age above which we do not hire (in policy or practice)?

  3. Training and promotion opportunities
  4. This is a fertile area for questions given the stereotypes about older workers not being committed or capable of learning.

    • How are team members selected for training or promotion?
    • Are older workers consulted about their perceived training needs?
    • Is tailored training offered to older workers?
    • Do we have age-based data on training and promotions?

  5. Flexible work practices
  6. Workers of all ages may value flexibility; for older workers it’s often for travel, caring responsibilities (partner, parents, grandchildren) or transition to retirement through part-time work.

    • What are our flexible work policies?
    • Who accesses flexible work and in what ways (such as compressed hours, working remotely, part-time roles, extra leave, flexitime)?
    • Do we have transition-to-retirement pathways or practices? Do older workers feel comfortable discussing their retirement plans?

  7. How can the board get involved?
  8. As well as asking questions, directors may consider:

    • A regular agenda item for human resources issues, including older workers
    • Including this issue as part of forward planning (especially in small entities)
    • If it’s possible or appropriate, a round-table discussion with older workers can quickly highlight areas of concern or, like BMW, identify ideas that benefit all workers as well as the bottom line
    • Whatever avenues you explore, if management knows that this is an issue of interest to the board, it will help start new conversations and create a culture where experienced workers are valued for the significant skills they bring to the business.

Mythbusters

Just as with gender, we need to foster a culture change about older workers. This starts with busting some pervasive stereotypes.

  • Older workers aren’t committed
  • Some say older workers lack commitment, merely marking time until retirement and focusing on other things. But older workers may well be your most loyal employees. An Australian Institute of Management (AIM) study showed workers 45 and over were 2.6 times less likely to quit their job in a given year than younger colleagues.

  • You can’t teach an old dog new tricks
  • There is a common assumption that older workers can’t (or don’t want to) learn new things. Recent Benevolent Society research says many Australians believe it’s better to train young people because older Australians are slow to learn and less capable of picking up new skills. In fact, older workers are able and generally keen to upskill or reskill, particularly through practical and relevant training opportunities. Having a skilled and up-to-date workforce of all ages benefits both workers and the business bottom line. This is equally true for digital skills. Provided they see the relevance, older workers are keen and capable learners of new technologies.

  • Older people are stupid
  • One pervasive stereotype is that after 50, “senior moments” increase and our capacity to think and contribute intellectually decline markedly. Not so, according to 2012 Monash University/AIM research, which found that older, more experienced managers recorded higher levels of “crystallised” or “getting the gist” intelligence, wisdom and verbal reasoning — resulting from education, experience and practice. In contrast, “fluid” intelligence — the ability to solve novel problems using inherited basic reasoning ability — was slightly higher among younger managers. Overall, the study found no justification for distinguishing older workers based on intelligence, problem-solving or leadership ability. Older workers may also increase psychological stability to the workplace.

  • Older workers hog jobs
  • The idea that older workers take jobs from the young is known by economists as the “lump of labour” fallacy and it’s been disproved by numerous reputable studies since 1891. It’s the same fallacy raised (and debunked) when women entered the workforce in larger numbers and is based on the fallacy that there are a set number — or “lump” — of available jobs, so every older person who keeps working denies a space for a younger colleague. In fact, the number of jobs is not finite and there are considerable economic benefits in keeping people employed for longer.