The aging population and the skills shortage
Right now millions of baby boomers are approaching retirement. Couple this with birth rates at an all time low or in serious decline in the US, UK, Australia, Germany and other developed countries, and the workforce of the future is in serious jeopardy. And potentially headed for even more challenges as we enjoy better health and live longer.
I went to see Dr Phil last month in Melbourne (in my defence I had a free ticket!). One thing he said that really stuck with me is that those of us who are alive in 2020 will most likely have a life expectancy of 150 years or more.
Alison Stieven-Taylor is an author, journalist, and magazine editor based in Melbourne. She is also the creative director of Reality & Illusion Productions, a leading media communications company specialising in B2B communication.
Yikes, can you imagine having to work that long? It’s all well and good to live a long, long life, but how are you going to fund it if you aren’t working? In the workplace if you are considered old at 45 today, where does that leave you at 90 with potentially another 60 years to live? Do you want to be looking for a job at that age? Suddenly living longer doesn’t sound so attractive.
This is where science and fiscal reality clash. Scientists create ways in which we can sustain life long past its original use by date – just think about the food chain. And now they are turning their attention on human beings. But what Scientists don’t worry about is the financial impact of living well over 100 years, what that will do to the individual and their family.
One undeniable fact is that we live in a country with an ageing population. And with a skills shortage. If we extend the retirement age even further then we potentially answer both problems. But are companies interested in older workers? And do workers want to work longer?
A recent study, "Which of Australia's baby boomers expect to delay their retirement?" revealed the majority of them were prepared to delay their retirement. Co-author of the study Associate Professor Natalie Jackson from the University of Tasmania told the Australian in June that this is “important given the skills shortage the country would face as the population aged.”
"When the fog of the global financial crisis clears, this whole problem of an ageing population will still be there, but we'll all be a couple of years older and no closer to a solution," she said.
"This research shows we could target particular professions to help them transition to retirement in a way that keeps them engaged in the workforce at the level they want to be. In Australia it's still too much you either work or don't work. Compare that to a country like Finland where if you are an older person and you want to work for 15 hours a week or 25, that must be facilitated by the employer.” Finland. That sounds like a good place to be working when you’re 80.
A decade ago the average age of retirement was 58 for males and 41 for females. The study predicted a median expected retirement age of 64.3 in 2006. In 2009 the official retirement age at 67. Will it have to go higher as our health improves and our life expectancy rises?
Management-Issues website quoted a report that indicated 75% of employees anticipate working beyond 65. “The number of Britons working past the official retirement age is expected to treble by 2017, posing some serious challenges for employers”. And in 2015 more than 20% of the workforce will be aged over 55 years.
Workers are keen to stay in the workforce so they can continue to contribute said researcher Kathy Kelly who investigated strategies that deliver post retirement employment opportunities for the ageing workforce.
The study took her to the US and Britain. She said “The research shows older workers want to stay in the workforce, so that dispels the myth that they’re only in it for the money. The majority would have left school when they were 14, so they’ve known nothing except the discipline of getting up, going somewhere and being engaged”.
Currently in Australia there is work being done to educate employers about the value of the older worker and how to cater for his/her specific needs. This may involve greater flexibility in working hours and duties.
And a number of European Union countries have initiated programmes that are designed to
• maintain and promote the health and working capacity of workers as they age
• develop the skills and employability of older workers
• provide suitable working conditions as well as employment opportunities for an ageing workforce
If workers are prepared to stay in the job in their latter years, what is the position of the employer? How flexible are they when it comes to older workers?
In a survey undertaken by Cornell University in the US recently, results revealed –
• 26% of employers would allow older employees to reduce hours while not changing benefits
• 40% of employers would allow pension benefits to be drawn while working part time
• 3 out of 4 companies would permit a reduction in hours rather than promote full retirement
The Australian Bureau of Statistics estimates that 85% of all workforce growth will be supplied by people aged 45 and over by 2012. This reflects our environment where there is a skills shortage combined with a large ageing population.
The bottom line is without older workers there won’t be anyone to do the job.