Conversations on Workforce Aging

NZ Herald January 2011

Conversations on workforce aging

Keen hard-working baby boomers may yet cushion us from an economic burden writes Kaye Avery

Populations around the world are increasing at an astronomical rate and people are living longer. It means that demographic imbalances will soon have an impact on our societies, as the populations’ average age increases. How will we maintain productivity in our organisations and support and service our growing dependent communities? This is the question.
As the Baby boomers begin to retire there are complex issues we need to face as a nation, including reduced workforce numbers, loss of expertise, pension funding and global competition for our innovative and young talent.
In 2008 the Waitemata and the Counties-Manukau DHBs’ undertook a study of their aging workforces to find out what their mature-aged employees’ changing needs were. Approx 50 % of their combined workforces were over the age of 45 and it was predicted that around 41% could retire over the next 20 years. With much foresight, the DHB’s decided to survey their mature employees to get their input. 28 focus groups of self-selected participants from across all departments came together in facilitated dialogue to discuss the issues. Set questions about resourcing, hours of work and conditions of employment were designed. Participants engaged with the topic enthusiastically and feedback was given freely.
Since then the DHB’s have implemented (and continue to implement) a number of initiatives to address issues raised by older employees to maximise their engagement, productivity and enhance workforce planning.
Population aging is a world-wide problem especially in the developed countries and the reality of this is becoming increasingly apparent. But what is it and what is it all about?
In the 2006 report, “Workplace 2012 New Zealand”, author Mercer gave some striking projections for 2012 that demonstrate the issues:
• participation rate of workers aged 55 to 59 will increase 2.8%
• participation rate for workers aged 60 to 64 will increase 7.9%
• the percentage of workers aged 25 to 54 will decrease 3%.
This population bulge (and hollow) is caused by the flurry of births post WW2, increased life expectancy through medical advancements, birth rates decreasing due to more choice to parent, and women are having their babies later. As a social and cultural phenomenon, this is a temporary glitch; however it will have implications for my grown children who are establishing their careers and building up assets.
The looming issue is the “dependency ratio”, which is the ratio of productive workers to dependent population (children, the unemployed and retired people over 65). Currently, in New Zealand, the ratio is about 4.5 to 1, but by 2050 it is projected to be just over 2 to 1. Significantly fewer people will be there to support those dependent. It is deemed to be “possibly the biggest economic issue we have facing us”, according to the 2002 New Zealand Treasury Working Paper on The Economics of Ageing. The potential of a future with a growing ageing poor, under-resourced healthcare facilities, and critically low per-capita productivity levels will become a reality.

The recent riots in France represented a tip on the iceberg of demographic unrest and imbalances. Putting up the retirement age from 60 to 62 was a critical economic decision for France where the young fear difficulties accessing career advancement with older people staying at work, and older workers feel vulnerable to unemployment, under-employment or potential poverty. If made redundant in their 50s many Europeans find it near on impossible to re-enter the workforce.
My reading over the summer break, “A shock of Gray” by Ted Fishman paints a somber picture as the implications of aging populations impact on communities and societies around the world. It talks about reduced productivity and increasing global competition for the young and talented to maintain innovation and migrant service workers and labourers. He cites figures; globally the number of people turning 65 will increase by 71% between 2011 and 2031.
Yet having the oldest workforce in the OECD (with the exception of Iceland) has some advantages for New Zealand, and we have gained them out of necessity. Our young stars leave to expand their horizons overseas causing our employers to retain their mature-aged workers longer.
While there will be increasing opportunities for the young, qualified and motivated as our population ages, according to Mercer’s 2006 report, “workers aged 55 and over will need to become productivity drivers”. So, having strategies around employment, attraction and retention of our younger workers, plus having objectives to train and retain the productivity levels of mature-aged workers seem crucial for the future economic and social well-being of our country.
With ongoing productive participation of people over 65 in our workforce, (paying income tax and having greater discretionary income), some of the big problems we may otherwise face within the next 5 to 30 years may be held at bay.
The situation is complex. Baby Boomers have widely diverse needs, skills and economic circumstances. Individuals who have paid into a superannuation scheme for many years may be able to retire at 65. But many have not, and may now be suffering the financial implications of lost investments. Most will need to work beyond 65, while others will prefer to work longer because it keeps them connected and feeling of value. Sharon Buckland’s “The New Zealand Boomer Dreams Study” (2009), involving 1,162 respondents born between 1946 and 1964, found that 80% of New Zealanders would like to work through into their 70s.
Despite ample current evidence of the need to grapple with these issues, many organisations remain unaware of how their employment practices and cultural attitudes are counter-productive. Thankfully the EEO trust and the Human Rights Commission are committed to educating employers in equity and diversity, making guidance available to adjust employment conditions so that workers are better supported as they age.
We are forging new territory around ageing and working longer. Yet we have a long way to go to achieve workforce environments that fully utilise the experience and wisdom of older employees and then facilitate their eventual planned, dignified, well-timed and happy exit.
Stereotypical attitudes still hold us back from creating a new paradigm for working longer. Myths and assumptions that have outlived their usefulness remain in workplaces and the mature-aged worker themselves buy into some of the most unhelpful notions. Examples are: being too old to train, less competent with technology, and being ‘ready’ for retirement!
We could improve this by focusing on development, honouring experience and being willing to adjust conditions to enable people to contribute longer.
Ways that organisations can better prepare for an ageing workforce are to:
• create diverse, equitable workplaces that are free from stereotypical attitudes and practices
• train managers in their understanding of ageing and equip them with tools to build collaboration
• develop people - of all ages
• offer career planning and transition to retirement workshops to older employees
• offer part time and flexible working conditions

Not only do the needs, priorities and values of older employees shift over time, but also their strengths. While some competencies change others increase such as institutional and general knowledge, social intelligence, high work ethic, commitment to quality and so forth. Priorities shift with considerations such as: career versus lifestyle, financial needs versus health and wellbeing, and individual concerns versus supporting families and communities. These become a complex set of choices through which the mature-aged employee must navigate.
Mature-aged workers need to also take greater responsibility for taking control of their late-career transitions, initiating development opportunities that are better aligned with what is becoming more meaningful for them.
With the looming dependency ratio issue, conversations on aging and working need to happen. An issue neglected becomes a problem – an issue explored becomes an opportunity.
Kaye Avery
Career Coach and Facilitator
www.career-coach.co.nz