Older workers could fill gaps in workforce

An ageing population is bringing with it an ageing workforce but there’s been little discussion as to what that will mean, and few strategies put in place to take advantage of opportunities.

Management at a hospital in the South Island began thinking through the implications when they realised there were a lot of older staff in their workforce.

Geoff Pearman front profile

Geoff Pearman, the Managing Director of Partners in Change, was called in to devise a strategy.

“The way they experienced it first of all was, ‘We’ve got all these older workers, when are they going to leave, and what are we going to do if they do?’ That was their wake-up call.

“Now they’re putting in an action plan which is very much focussed on retention but also investing in health and wellbeing programs, rethinking what flexibility of work is about.”

There's been a 65 per cent increase in the number of people aged 50 and over in paid work between the 2001 and 2013 census.

There are now more than 665,000 people aged 50 plus in paid work, according to the latest census; 34 per cent of the total workforce.

It is not only ageing but older workers are motivated by different factors than they were at earlier stages in their career.

“The ageing of the workforce [is] driven basically by the boomer bulge moving through,” says Mr Pearman.

“The youngest boomer is now 50 and the oldest is 69 so that particular population is moving into a life stage where what they’re looking for in the workplace is quite different.

“Most often, they’re not driven by career, they’re much more driven by wanting to do something significant, something that’s meaningful, something that creates a difference."

Impact of ageism

Senior carpenter

“The second part of it is the declining birth rates so you haven’t got the volume of labour coming through that you had coming through in the boomers’ day, and that’s something employers haven’t woken up to yet.

“Very few companies have actually put any policies in place, let alone put any initiatives in place to work with that shift that’s happening.”

An additional complication is an unwillingness to employ older workers, an unconscious bias or ageism that occurs.

“It’s one of the mysteries that if you talk to employers they will often tell you about some older workers they’ve got who are just fantastic, they’ll tell you these great stories and yet when they have a vacancy and they go to recruit, do they recruit an older worker? No, they don’t,” Mr Pearman says.

“I think what we’ve got to get to grips with is the whole notion of unconscious bias but no employer admits to age discrimination.”

Nor does he believe younger workers are automatically cheaper for companies.

“It’s one of the myths – there’s plenty of [research] around that shows you might pay a little more for an older worker but if you have a look at the return you get on that, in terms of knowledge and experience, and skill you buy, it’s a different issue.”

Increasing participation

Labour force diagram

The number of older workers is also increasing.

There were approximately 111,000 workers aged 65 plus in 2011 but that will climb to 364,000 by 2031, according to the Business of Ageing Update 2015.

By then, around one in five New Zealanders will be 65 plus.

Solutions too limited

Some regions in New Zealand have recognised there is an issue but the strategies being developed are often too limited and don’t recognise older workers could be part of the solution.

“There is discussion in the regions about where’s our next worker coming from but I think people still see the solution as immigration or attracting people,” says Mr Pearman.

“I think in regional NZ, it’s a question that’s going to emerge a lot sooner than it will in the cities. You may have heard about what’s happening with the hollowing out of regional communities."

He says a number of regions have come up with strategies to address skill shortages, including plans to introduce fast broadband, but they are "falling back on that old solution which is, there must be more people out there who want to come and live here, we’ve just got to get them."

Senior woman using a laptop while camping

Mr Pearman says the first step for companies is to look at their workforce profile.

One business he worked with had 2,500 staff and 600 of those workers were over the age of 55.

“That’s 600 people making a decision every day about whether they’re going to turn up at work, be engaged, not be engaged, working through life stage issues coping with things like parents maybe needing care, caring for grandchildren, all of those sorts of life stage issues,” he says.

It’s an issue across many industries.

“A company that made smallgoods, they were in expansion mode, acquisition mode, and what the chief executive was worried about was where he was going to get his next butcher from,” Mr Pearman says.

“He’s got business development, he knows how to grow the business, he’s got customers but his big issue is where’s his next butcher coming from because when he looks at the age profile of his butchers, he could lose a lot of good knowledge and expertise very quickly.

“So, what we’ve got to try and help him understand is what their business drivers are and where those risks are and then to put in place a business strategy.”

He believes identifying the risks is key.

The next step is to look for the hotspots, if it’s particular locations or particular occupations where replacements take a long time to train.

“Your strategy might be to do succession, your strategy might be to put in place wellbeing programs but understand your risk and then put in place a strategy to mitigate or manage those risks.”