Stephen Matchett on why old workers are good for business; John Connolly on executive pay; and Andrew Baxter on marketing
THE people who know how your business works are walking out the door. And they are doing it earlier than the official retirement age. According to the Australian Bureau of Statistics, some 75 per cent of retired men and 90 per cent of women are out of the workforce by the time they are 64. Yes, you can replace them with people half their age, who can turn out to be half as productive. According to University of Melbourne research, 40 per cent of 18-to-34-year-olds surveyed admitted to faking a sick day in the past year, while the over-45s were the least likely of any age group to chuck a sickie. And while older workers may not all be tyro texters, the Australian Institute of Family Studies says baby boomers account for a third of online Australians. Tim Windsor, a Flinders University researcher into life transitions, tells The Deal he suspects “a pretty good technology update makes older workers more adaptable”.
But employers who recognise this can’t just tell older workers they can stay. Employers have to offer more than money to make it worthwhile for older workers to keep putting in the hours.
Diana Warren from the Australian Institute of Family Studies used the first eight waves from the Household Income and Labour Dynamics in Australia Survey to analyse pathways to retirement. She found in couple households where men have had the longer careers, superannuation levels “do not appear to have any significant effect on the likelihood of retiring gradually through part-time work”.
There are various low-cost, simple ways to hang on to older workers. According to survey research for the Financial Services Council, managers should be age-blind and assess people based on their skills and knowledge and ability to get the job done. Businesses can also appeal to workers’ professional pride and train up older staff. Engineers at 60 have seen much more technological change than they had at 40 and if they still think of themselves as problem-solvers they will want to learn more.
As Stephen Billett from Griffith University reported in a study for the National Centre for Vocational Education and Training, you can teach an old dog new tricks. “The evidence suggests they continually learn in and through their work, as most contemporary accounts of cognition would predict.”
But it’s not just the training, it’s the way that you train them that gets results. Inducting an IT veteran into an operating system in the same way as a new graduate is a great way
to ensure somebody who has seen it all before switches off.
Employers can keep older workers happy by simply showing them some respect, not by glib commitments to inclusion but by giving them physical resources to do their jobs. This can be as easy as ergonomic chairs or as complex as the emerging exoskeletons that can carry the weight now borne by bodies on assembly lines and building sites.
And businesses need to give the old the same chance as the young for new assignments and opportunities, or watch as they become competitors. Research by Alex Maritz from Swinburne University suggests entrepreneurs with an average age of 57 lead 34 per cent of all young firms in Australia. The 8 per cent entrepreneurship rate for Australians aged 55-64 is 3 per cent above the average for innovation-driven economies. “About 80 per cent of respondents significantly valued the non-financial benefits of self-employment, such as lifestyle and health preferences,” Maritz adds. “For many, starting a business is a key to active ageing and extending their working life.”
For many of the smartest workers in older age it’s all about daily experiences rather than investing in the future, as researchers Barbara Griffin, Macquarie University, and Hannes Zacher, QUT, found in an analysis of job satisfaction and career adaptability among older Australian workers. “Relatively older workers focus on more immediate emotionally positive and meaningful experiences at work compared to rather effortful and future-oriented behaviours associated with career adaptability, such as engagement in training and networking,” they say.
But above all it’s about offering people options beyond the extremes of the standard working week versus waking up on Monday facing nothing to do, forever. Miriam Forbes and colleagues from Macquarie University discovered the crucial importance of choice when they surveyed 2000 69- and 70-yearold men and women from the 2007 National Survey of Mental Health and Wellbeing, accounting for health, wealth, marital status and physical demands of their occupation.
They found that working full-time later in life is no better or worse for mental wellbeing than being retired. Rather, part-time workers had the best mental health and sense of wellbeing.
“This is probably because part-time work combines the positive effects of retirement (less stress, more time for leisure activities) and the positive effects of work (sense of purpose, autonomy, social networks, financial independence),” they say.
But Dr Forbes tells The Deal that this applies when people have the autonomy to make up their own minds on what they do and for how long: “Freedom to choose is really important.”
Businesses that lose their own veterans can still pinch people leaving other organisations who like the idea of doing something new, just not for a standard working week.
The “encore career” idea is well established in the US and may account for the extraordinary rebound in the aged workforce there. In 1995 barely a quarter of American men over 60 were in the workforce, now it is 35 per cent. Though 10 per cent lower, the rate of growth for women was the same. (Although an increase in the pension age and a reduction in public payments for earned income has a great deal to do with it.)
Encore careers have always existed in informal ways – there isn’t a museum in the world that would work without volunteers. But with retirement stretching for 30 years the chance to establish new expertise, and be paid for it, will be appealing, and not just to people with expensive professional qualifications.
Researcher Jane Figgis points to trades skills as an obvious area where encore careers can flourish. Vocational colleges in the US, like TAFE here, have developed new skills training for older workers. The challenge for the Australian vocational education system is to rejig courses to suit mature age workers. Industry should encourage trainers to make the effort, if only to meet skills shortages.
Of course, living longer does not mean people in their 60s are fit for work. As the late demographer Graeme Hugo found, baby boomers at mid-life are less healthy than their parents; 26 per cent are obese compared to 12 per cent of the previous generation.
Australian management also has a way to go in pitching offers to older workers, especially women. A survey of flexible working conditions by Catherine Earl and Philip Taylor from Federation University found “the needs of older women workers are not differentiated by managers from the needs of older men workers ... nor from the needs of younger women.”
The people employers want to keep or attract are the selfstarters who see themselves as in control of their lives. As Figgis says, “the deep question for people approaching ... retirement is not ‘what will I do?’ but ‘who will I be?’.” Employers who can help them answer that will find a new workforce, experienced, enthusiastic, smart and skilled – just old.