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Smart employers know the value of older workers

Smart employers know the value of older workers

MEDIA RELEASE: Thursday 12 November 2015. As the significant cohort of baby boomers start moving into retirement, particularly from 2018, retaining and employing mature workers will be an increasingly smart solution for businesses in the attraction of skills and talent. Over the coming years there will not only be a decreased labour supply, but a sudden loss in skills and experience as increasing numbers of people reach retirement age.

New Zealand is well ahead of most other OECD countries in recognising the value of older workers, coming second only to Iceland in terms of employing people aged 65 years and over. However, a recent report from AUT University and the Equal Employment Opportunities (EEO) Trust shows that, when it comes to recruitment, older workers are the least used option, coming well behind recruiting more female or immigrant workers.

A one day forum was recently hosted in the Bay of Plenty by the Tauranga Chamber of Commerce, Age Concern and economic development agency Priority One that looked at the opportunities and issues of employing mature workers. It also provided tools to help employers and employees undertake the transition that will be required as a result of the ageing demographic.

Keynote speaker Tim Bentley, Professor of Work and Organisation at the AUT Business School, says “The impact of an ageing population on the workforce is one of the top three concerns of industry, but they haven’t yet got their heads around the implications. Being age friendly will be a competitive advantage for organisations and being engaged in work will be good for older people.”

It is likely we will look back and see ‘retirement’ as a 20th century anomaly, with the creation of a different vision of our later years developed in the near future. With people living longer and sometimes experiencing 20-30 years of ‘retirement’, this opens up a whole new space in which to engage in meaningful work and activity, either paid or voluntary.

Blair McCarthy, from the Office for Senior Citizens, says “Older people are making a growing contribution to our economy, for example through voluntary and community work and their contribution to the labour market and to tax revenue. In addition, they are a powerful consumer demographic which should be a target for those developing products and services.”

A key message from the forum was that people will continue to live longer, so it is important that this stage of life and work is redefined. Geoff Pearman, principal consultant for Partners in Change, says “We have not added decades to life expectancy by simply extending old age. We have opened up a new space partway through the life course – a second and different kind of adulthood that precedes old age. As a result, every stage of life is undergoing change.”

One of the most common ways of dealing with skills shortages is to encourage existing mature-age workers to stay on past retirement age. Although retirement-aged workers currently only make up five per cent of the workforce, they will comprise 13 per cent by 2036. This means considering more flexible working arrangements, ensuring jobs are restructured and designed to suit older workers, developing leadership strategies and succession planning.

Tim says “It’s important that employers are having these types of conversations with their mature employees. Graduated retirement provides opportunities to retain and transfer essential skills and organisational knowledge.” Employees in their late 50s need to think about whether they would like to continue working, what their options are in terms of transitioning to a less stressful or more flexible role, and how they can start the conversation with their employer. On the other hand, employers need to understand what the intentions of their older workers are, what the implications are on the business if they leave, where they will get their next worker from, how much organisational knowledge will be lost, and how they can start the conversation with their mature employees.

Geoff says “We need to help people understand how transitions work. Change is not the issue with most people – it is the journey to change that they find difficult. We need to talk to people about the next stage in their lives, what they have planned, what they would like to do.”

A recent report from PwC economists on harnessing the power of older workers concludes that countries can add billions of dollars to their economy if they follow best practice in harnessing the potential of their older workers. The Workforce Ageing Survey 2014 found workers aged 50 and over are seen as valuable and hardworking by employers, and are regarded as more productive and better in a crisis. “More mature workers tend to require lower levels of training and less supervision, are often more reliable and loyal, and have a strong work ethic. They have also collected a lifetime of skills and experience, have good communication skills, know how to manage stress and can provide value as mentors to younger people in an organisation,” says Geoff.

While money is one reason people work longer, other reasons include job satisfaction, mental stimulation, physical activity and a sense they were making a useful contribution. The rating levels of importance of HR practices that encourage mature age workers to remain at work include recognition and respect, flexible work options, job design options, training and development options, and performance evaluations. Gwynn Jennings, a managing consultant in IBM’s Workforce Science and Analytics practice, says “Mature workers have the same drivers as the general workforce, however they also have three additional ones. These are that the organisation celebrates success, that they are satisfied with their physical work environment, and that the pay and benefits are fair for the work done.”

Optimising the work environment for older workers is becoming increasingly important in retaining and attracting skills. However, a recent study of over one thousand organisations for the EEO Trust Quarterly Diversity Survey found that only 9 per cent of respondents provided opportunities for people to transfer to less stressful or strenuous roles and only 3 per cent considered redesigning jobs to appeal to mature workers. This lack of consideration in HR strategies and practices for the attraction and retention of older workers is a major concern.

There are a number of practices that employers could introduce to ensure they become an age friendly employer of choice in future years when the talent pool will become increasingly depleted. These include: workforce planning underpinned with policies and practices; understanding the importance of knowledge continuity; focusing on health, safety and wellbeing; understanding the drivers of productivity and engagement of all age groups in their organisation; and ensuring an inclusive culture.

ENDS

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