Organisations to change as Boomers work longer

In a world of change, of demanding KPI's, share price slides and staff turnover, it's a struggle to find good news. Here's some.

In the next forty years Australia's organisations – both great and small – will no longer reject younger workers because they have 'no experience'.

Nor will older workers in there 50s and 60s be forced to retire or get knocked back for jobs because they were 'too qualified' or 'might have trouble with the IT'.

The economy is hungry for skilled workers and it won't care if they are 27 or 67 years of age, as long as they are candidates of merit and who can do the job.

A recent survey of 400 businesses conducted by the Australian Industry Group and Deloitte found that more than a quarter of companies could not find workers to fill vacant positions, and this is predicted to get worse.

The number of working age people to support each retiree is expected to fall from five people today, to 2.7 people by 2049-50. Today, around one quarter of total Government spending is directed to health, age-related pensions and aged care. This will rise to about half by 2049-50. The antidote is the elimination of age prejudice and implementing training and retaining older staff.

While population ageing poses some threats, it also offers extraordinary opportunities too. Business critics often talk about creating a smart company – an organic corporation committed to life-long learning that values organisation culture and corporate memory.

With a shrinking labour force through to retirements and lesser members (comparatively) of younger generations entering the workforce, holding on to experienced staff will become the strategic aim of HR.

The future of modern organisations will be heterogeneous. They will have a 'Christmas table mix' of young, well-educated people working with people their parents and grandparents age.

This is a great opportunity to create a new kind of organisation, one that replicates learning, participation and production across the life cycle.

But will older people put up their hands to work longer? Some with healthy savings will wave the world of work goodbye. But consider this: a retiree who owns their own abode will need about $40,000 per annum to live comfortably. To earn that they will need principal savings of about $400,000 or more.

Professor Hal Kendig at the University of Sydney found that of 1000 boomers surveyed, 40 percent were 'hard hit' by the GFC and economic roller coaster of the last 25 years. 40 percent of women and 32 percent of men planned to postpone their retirement.

Life expectancy for Australian males is 84 years and 88 if you're female. So if you're planning to retire at 65, your retirement savings will need to last around 20 years.

But will employers see the writing on the wall?

Professor Ross Gurst and Kate Shacklock from Griffith University conducted one of the most comprehensive literature reviews in to organisational demographics in 2006.

Their paper 'The impending shift to an older mix of workers: perspective from the management and economic literatures', said there was no evidence to support age workforce stereotypes.

They found older workers bought experience and maturity to the workplace. They were in the main, reliable, dependable and loyal. Older workers had low job attrition rates, possessed strong applied knowledge.

Cambridge University conducted a ten-year study of older workers in the 1990s and found that their experience gave an increased ability to deal with new and unexpected situations. The study found although speed declined a little with age, accuracy increased and 'unconscious optimisation' which is the ability to compensate for minor changes in impaired performance.

There is considerable evidence that mature age workers deliver a net benefit of $1956 per year to their employer compared to other workers due to high retention rates, lower rates of absenteeism, decreased recruitment costs and greater return on investments.

The Federal Government has expanded the $43 million Experience+ program to workers aged 50 and over. This includes grants of $4950 for employers of mature age workers to help in up-skilling, on the job support for mature aged workers whose jobs may be at risk due to ill health, free professional career advice and more.

Enticing older workers to stay in the workforce longer enhances productivity growth, improves living standards and helps meet the fiscal challenge of an ageing population.

And what of younger workers? Their labour will be in high demand and depending on the profession, can expect strong wage growth. The savvy will consider a trade or investigate a university degree or TAFE qualification.

Small adjustments now to grow the economy by increasing productivity and participation and planning for future demographic change will prevent the need for sharper and more costly adjustments in the future.