Opening address to the Managing Your Ageing Workforce Conference
Minister for Ageing, The Hon Julie Bishop, addresses the Managing Your Ageing Workforce Conference in Sydney.
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6 April 2005
Good morning, ladies and gentlemen, delegates, speakers and guests. I am delighted to be here this morning to open this inaugural Managing the Ageing Workforce Conference. I hope it addresses the important issues that require discussion and debate in this country as our nation ages quite literally, brought about because of a decreasing birth rate and increasing life expectancy.
The Australian Government’s approach to population ageing, which gives rise to these issues, is a whole-of-government approach, comprehensive and cohesive.
Our actions are guided by our belief that population ageing presents many opportunities, as well as challenges, and we can best embrace it, and take advantage of it, by putting in place policies and programs now. In this context, our approach is exemplified by the fact that we have two specific portfolios, Minister for Ageing and Minister for Workforce Participation.
This will not only ensure we are well-placed socially to prepare for our changing demographics, but also ensure that we are not forced to make sudden, radical fiscal changes to cope with the type of economy that population ageing would otherwise bring about.
Some people perceive that population ageing, particularly in the context of an ageing workforce, is a negative for business, and for our nation in general.
The corporate sector in particular may feel threatened by a ‘worker shortage’ which translates into an inability to sustain output and productivity.
We can understand why population ageing has been equated to a ‘problem’ by many in the community - the numbers, taken at face value, do not immediately present themselves as a good news story.
Most of us now appreciate that the ratio of working age people to those aged over 65 is shrinking and will in fact halve, from five to 2.5, over the next 40 years.
We understand that an ageing population implies higher costs, in health and aged care for example, and in the provision of pensions and retirement incomes for the increasing number of older people, and supported by a decreasing taxpayer base.
The trend to mature age workforce participation has been talked about for over 20 years. It is essentially because of our life expectancy increasing. We are living longer. But the work culture has not kept pace or adapted itself to the inevitable demographics.
In terms of how we as a government, a significant employer in our own right, and the corporate sector, face demographic change, I would contend that there are three basic options.
Option 1, the passively resigned approach, the ‘accept the inevitable’ scenario. Under this option, businesses would do nothing. They would leave their current work practices in place. They would not review their organisational structures to assess their appeal to either younger or older employees. A ‘people come and go - some older; some younger, what can you do?’ type approach.
Option 2, the gloom and doom approach leading to an ‘over-reaction’ scenario. Under this option, businesses could simply increase competition solely to attract and retain only young employees. They could structure their work environment to one they believe is most conducive to engaging younger workers. Packages, workforce practices and corporate attitudes could all be tailored to promoting and supporting the new, 20-something graduates, and ignoring any other avenues for increasing productivity.
The third option, not surprisingly the one I favour, is to view demographic change as a great opportunity for the organisation. An ‘embrace the future with gusto’ scenario. Businesses could review their practices and structures to make sure, not only that they can attract and retain younger employees, but that they can retain mature age employees, and also that they also recruit many more.
So how can this be done?
A key will be to change attitudes towards ageing in general, and mature age workers specifically. This will require attitudinal change on behalf of both the individual workers, and the employers.
Will businesses want more older workers? Research tells us that mature workers stay longer at an organisation, especially after training, than younger workers, who are five times more likely to change jobs than a mature age worker. Older workers have less absenteeism and sick leave and, interestingly, fewer accidents than their younger colleagues. And older workers possess considerable corporate knowledge and experience to enhance the workplace.
A case study undertaken with DMS Glass found that the employer considered that their older workers provided higher quality standards, which in turn encouraged younger employees to improve, as experienced staff passed on the benefit of their years of knowledge.
And older workers continue to give much to their employer, their community, and our society as a whole.
This is good news for workers because research also tells us, research here and overseas, that there is a correlation between staying in the workforce and good health. It is mutually reinforcing. Staying in the workforce, for those who are able, is a healthy option.
How about this example? I read it last year in the Weekend Australian. "A man, said to be the world’s oldest worker, is now calling it quits, reported the Press Association. Ray Crist, a retired scientist who then started teaching at college in Pennsylvania in 1970, put down his pointer on Tuesday at the age of 104. Crist, though, has no plans to rest on his laurels. Instead, he’ll keep up with his research and academic papers, the latest of which sets out to explain how plants absorb toxic metals and thereby clean the soil. "When you have a mission you go after it," said Crist," who, incidentally, had worked on the Manhattan project back in World War II.
An Australian example? Qantas. Their oldest and longest-serving employee, Greg Roberts, joined Qantas in 1936 and worked as an engineer for 34 years. Although he formally retired in 1970, Mr Roberts has ‘never really left Qantas’, and at age 95, he continues to manage the Qantas Historical Collection.
While centenarians as workers might be the exception, clearly mature age workforce participation gives good returns to the employees themselves. Research is showing that employees want to remain in the workforce beyond traditional retirement age. For example, a recent survey commissioned by the Australian Government through the Office of an Ageing Australia, found that more than half of those now retired say they would have preferred to not stop working altogether, and almost a quarter would have liked to have stayed in full time employment.
Our work culture must encourage those with the capacity and the will to work longer by offering more choice, more encouragement, and the right environment in which to do so.
It is no longer economically feasible or socially desirable for us to lose a generation of workers whenever technological developments surpass a certain skill level, or because of discouraging attitudes in their workplaces.
The challenge is one of anticipation, of thinking ahead about curriculum changes in a timely fashion and of factoring in reskilling in the workplace to prevent shortages and address priorities.
There is one sour note we need to examine. While mature age workers have lower unemployment rates than younger workers, when they do lose their jobs, they are less likely to be re-employed. Their periods of unemployment are twice that of younger workers. They become more likely to exit the labour force altogether. In other words, the incentive is lost when the age barriers are thrown up.
Some say that these barriers demonstrate entrenched attitudes to ageing, or prove that we have a youth-oriented work culture. These sometimes invisible barriers are the hardest to shift.
The Business Council of Australia believes that, as a nation, the time has come to move away from old and negative attitudes which stereotype mature workers. The council says the social and economic infrastructure of our workforce is capable of supporting a shift away from these attitudes. It points out that age diversity can help business understand client diversity. For example, that older customers like to be served by those who can understand their preferences and needs. We are seeing a positive response from the larger retailers and banks in that regard.
We also have to consider the expectations and attitudes of the next older generations, the ‘baby boomers’. That whole bubble of babies born between 1946 and 1964, the first of whom are turning 60 next year.
It is a generation the likes of which we have not seen before. It is a generation that expects, indeed demands, greater choice in how they live their lives. We are seeing this demand for choice in all policy areas, from how they can access their superannuation, to how, when and where they receive aged care services.
Government as a policy-setter and as an employer will need to meet this demand, just as the corporate sector will, by increasing workplace flexibility. While the government is encouraging people to work longer if they can, beyond traditional retirement ages, the baby boomer generation is unlikely to respond to that call unless work can be more flexible and better organised to take account of what they want to do with their time. How can it be better structured to fit in with the other activities they want to do, for example supporting their children, who are invariably in a two-income family, so the boomers are caring for the grandchildren?
We need to redefine ‘retirement’. Our focus should not be on retirement age and when that begins, but on what can we do and what activities can be accommodated in our lives beyond traditional retirement age. The challenge for employers is to better tailor or customise the final years of working life, at whatever age that might be. Work and retirement should merge into a transition phase with flexible hours, different work patterns, different jobs or levels of responsibility. I am certainly encouraging this approach in the aged care sector, which is challenged by the fact that so many people working in aged care are ageing themselves.
We need to put in place a more structured winding down phase, a gradual withdrawal, not ‘That’s it, you’re retired. That’s the end of the working life’. Work and retirement should be regarded as a continuum. Employers and employees must be more inventive when devising other roles in the workplace, mentoring and passing on skills and experience, focussing on succession and transition as much as recruitment.
A side benefit is that more flexible working arrangements also encourage retention of younger staff because they see their employers can be open and adaptable to change and work-life balance. We need to ensure younger employees can also see the benefits of older workers in their workplace, not as competition for jobs, or barriers to promotion, but as the leaders who will help redefine work practices, enabling workers of all ages to choose the best arrangements to suit their own and their employers’ needs.
This is a much more effective arrangement for the community at large, because Australians are at different life stages. Some take time off for children, study or travel. Some take up other responsibilities and interests as we age.
And we must remember that Australians have always been great volunteers and we will always need volunteers in our community. Part time work, for example, allows us to combine some workforce participation with what we see as equal or other community responsibilities.
As for the economy, it always benefits if government and business can review and adapt policies and practice to encourage maximum productivity from all stages our lives.
So what can government do? For a start we can remove barriers by legislation. For example, the passage of the Age Discrimination Act, in itself a clear indication of community support for better attitudes to ageing and older workers in the workforce. The business and community groups we consulted in that process agreed the step was important to stop outdated age discrimination.
The government acknowledges the needs of families are also evolving and we have simplified family assistance and improved work incentives for families and individuals to better suit the times. Policies have been adapted to assist parents, mature age people and those with a disability to better balance their lives and other responsibilities with the opportunity and the chance to work.
For the same reason, we are tailoring training and assistance to individual needs, capacities and circumstances. The last budget provided over $12 million over four years for a Mature Age Employment and Workplace Strategy to address entrenched employer views; to encourage mature age friendly workplaces; to engage mature age people on work and job search needs; and to create opportunities in specific industries. A few of these elements will be support groups, business learning networks, including regional networks, a jobwise portal for mature age employment and workplace guidelines to assist employers.
Our retirement incomes policy no longer bars or discourages mature age work. We have changed the superannuation and taxation system, and eased the pension income test, the Senior Australians Tax Offset and the low income tax offset to assist people who choose to work whilst claiming some form of pension or superannuation.
These measures go hand in hand with the promotion of a more positive view of ageing in a changing but consistently productive society.
Delegates, my very best wishes for your deliberations over the next two days. I have great pleasure in declaring open this conference on the mature age workforce.
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