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The benefits of an ageing workforce

While most business owners or managers are aware that Australia's population is ageing and this may have an impact on the available pool of labour and skills that will be available to small businesses over the next decade, many have not had the opportunity or the time to identify strategies or succession plans to address the issue. One of the major challenges for all Australian businesses, large or small over the next decade will be to evaluate the impact of an aging workforce on their business, and implement strategies to overcome the challenges accompanying this world-wide phenomenon. It is a fact that the supply of skilled labour in your own industry sector may well be insufficient to address your labour needs over the next twenty years. To give an example of the extent of the problem, by 2021 the number of people aged 65 and over is likely to total 4 million and the number of people retiring will exceed those entering the labour force. While an ageing workforce means declining labour force participation, our declining fertility rates also mean Australia faces markedly slower population growth. Over the entire decade of 2010 to 2020, the working population in Australia is projected to increase by just 125 000 compared with an annual increase of 170 000 at present. It is also important for businesses to consider that the owners of half a million enterprises throughout Australia have already celebrated their 50th birthdays, and their ranks are growing by 10 per cent annually. What does this mean for your business and the economy? The serious decline in the number of working Australians will put an enormous strain on our businesses, the economy and public services. This is why putting in place strategies for succession and increasing labour force participation of older workers in business will have real benefits for Australia's future growth rates. The retention of mature-age workers by businesses will become critical in sustaining the supply of available labour. From an economy-wide perspective, higher labour force participation rates will boost growth and living standards. For business, putting in place succession plans and/or supporting the participation of older workers in business can assist in maintaining skills and experience in the face of a slowing labour supply, while also providing scope to better align the work force with an ageing customer base. Ongoing participation or succession planning for small businesses also provides greater scope for individuals to ensure their own financial security and wellbeing. Succession plans for small businesses There is a range of issues that businesses need to address in developing effective strategies to better support the ongoing labour force participation of mature-age Australians. These strategies will differ across companies and organisations depending on the size and nature of the industry or business.

For some businesses who only employ a small number of staff or who rely on family members to operate the business, consideration should be given to the financial and workplace aspirations of children, partners or other staff within the business when developing a succession plan. With planning, it may be possible for more mature owners to move from a full-time to a part-time capacity whilst other family members begin to take a more active role in running the business. Alternatively, a succession plan may incorporate an agreement to sell the business within a certain time frame. Larger businesses or industries should give serious consideration to implementing strategies to retain mature-age workers. Unfortunately, many employers continue to believe that taking on, or retaining mature-age workers could potentially lead to problems within their business. It is well known that barriers to employing a mature-age worker are exacerbated by the stereotypes that exist in our community. Mature-age workers: common stereotypes Commonly cited perceptions of a mature-age worker are that they have:

declining productivity levels; diminishing health resulting in higher absenteeism and accidents; a cultural misfit in a fast-paced and dynamic business environment; and decreased intellectual and cognitive capacities.

Benefits of employing mature-age employees In fact, a lot of these perceptions often lack validity. A recent report produced by the Swinburne University in Melbourne has found that:

There is no significant difference between the performance of a mature-age worker and a younger worker; Mature-age workers use experience and skills to offset a decline in performance due to aging; Mature-age workers are just as flexible, if not more, than younger workers with regard to working conditions; Older workers are interested in undertaking training and furthering their careers; If learning programs are tailored to the age, knowledge and experience of mature-age workers then learning is just as effective, and no more expensive than for young workers.

Another report released by Business, Work and Ageing in 2003, called 'Managing the Age of Change', has revealed that older workers deliver higher quality performance which subsequently encourages younger employees to improve as experienced staff pass on their years of knowledge and quality standards. Mature age workers are also reportedly flexible with working hours and conditions, and despite what perceptions have suggested in the workforce - are not adverse to change management. Experience also allows older workers to have a reduced risk of accident related injuries in the workplace compared to younger workers.

So what strategies can businesses adopt to address workforce ageing and ensure they have an adequate supply of workers and systems in place to promote the recruitment and retention of older workers? The Business, Work and Ageing Human Resource Management Handbook suggests some of the following strategies for identifying and implementing solutions to address the long term problem of population ageing and shrinking pool of labour. Strategies for recruitment, training and retention in an ageing workforce Goal: Increase productivity, retention and return on recruitment and training investment 1. Ensure your advertisements do not imply age limitations and think strategically about the media that is used to attract a diverse cross-section of the labour market. 2. Address skills shortages, by recruiting and re-training older people. 3. Retain and reward workers that have the best skills. 4. Promote and support active career planning and intervention to encourage redefinition of a career course. 5. Assess and promote the tangible and intangible value of experience and corporate memory in your organisation. 6. Promote and implement life-long learning strategies. Goal: Reduce labour turnover; OHS Risk, and absenteeism 1. Undertake assessments of physical, environmental and organisational risk factors in the workplace for older workers. 2. Offer flexible work arrangements (permanent part-time reduced hours, fixed term contracts, home working, temporary etc.). Goal: Improve organisation culture and access to skills and corporate experience; employee motivation and attachment 1. Reinforce a culture of diversity within the organisation through policy statements, education and communication. 2. Encourage job mobility amongst older workers to increase their exposure to new challenges and work variety. 3. Adapt career management and remuneration packages for workers of different ages workers of different ages have varying requirements in terms of remuneration, superannuation and other benefits. In attempting to address the implications of an aging workforce the challenge for Australian businesses is to address the issue before it becomes too late. Time is ticking for a lot of Australian businesses as managers and employees become older and older. One of the greatest challenges facing businesses is to deal with the implication of an ageing workforce in ten years' time, today.