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This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.


New tricks, not harder ones

Australian businesses need to do more to raise the skills of older workers to keep them in the workforce longer and counter the ageing population's potentially huge impact on labour supply and economic growth.

The number of people aged 45 to 64 in the workforce has grown substantially over the past 20 years, partly due to there being a larger number of people in this population group. However, more than 40% of Australians still leave the workforce by age 55 and 80% by age 65. Only 5% are still working at the age of 70.

A tighter labour market caused by slower growth in the number of people of working age (15-64 years) is likely to dampen Australia's economic growth and the health of Australian businesses.

Some governments have introduced policies to encourage older workers to stay at work, such as changes to superannuation and pension arrangements; and some businesses have changed work arrangements, introducing greater flexibility and transition to retirement schemes that promote new combinations of work and leisure. However, much more is needed.

A key issue is skills.

People with higher-level skills and qualifications tend to stay in the workforce longer. So, helping existing workers to update and extend their skills encourages them to keep working.

As workers grow older, some skills become redundant, while some new skills become essential as new ways of working, new tools and new technologies are developed.

Older workers who would like to stay at work may need to renew and update their skills to keep pace with these changes.

Improving the accessibility and quality of training for older workers is crucial.
There are now few programs specifically for this group and older workers face barriers to participation including ageist employer attitudes.

Employer support for training is strongest for younger workers, partly due to a misconception that training older workers is not worthwhile because they have a limited capacity to learn and won't stay in employment long enough for employers to recoup investments in training.

Older workers also face barriers such as a lack of information about training options, work and family commitments, financial difficulties, and sometimes their own doubts about their ability to succeed.

Businesses must do more to smash these barriers or they risk losing their most experienced employees and a struggle to find replacement staff in an increasingly tight labour market.

Recent research indicates that, if they take action, businesses have much to gain. Seven case studies conducted by Monash University's Centre for the Economics of Education and Training of at-work and community-run skills development programs run for, or with a high participation rate, of older people, identified benefits to both the businesses and the individuals involved.

The case studies, discussed in the report Skills Development for a Diverse Older Workforce (published by the National Centre for Vocational Education Research), found that businesses benefited by gaining more capable and productive workers, they had less need for worker supervision, they won an enhanced reputation as a desirable place to work, and they paid lower insurance premiums due to having fewer occupational health and safety problems.

Older workers gained the benefits of being able to take on new roles and responsibilities, and gaining confidence, life skills and access to further study. Many found jobs after completing a community-based program.

The research also identified the keys to successful skills development programs for older workers: the creation of sympathetic, supportive, learning environments; and a willingness to adapt programs to meet the needs and circumstances of a specific group of workers.

Older Australians hold all types and levels of skills and qualifications, and they have diverse experience in the occupations and industries in which they work, differing retirement aspirations, and different degrees of willingness and confidence to participate in learning and applying new skills.

By itself, the provision of skills development will not keep older workers in the workforce, but it will help.

It needs to go hand-in-hand with flexible arrangements that encourage continued working, such as reduced hours or semi-retirement roles that enable older workers to combine employment with greater leisure.

One of CEET's case studies was a company with a high proportion of older workers. Seeking to avoid a mass exodus of skills, experience and corporate knowledge, it is training its older workers for new roles that are less physically demanding. The company has also introduced retirement transition programs.

If the Australian economy as a whole is to avoid a mass exodus of valuable human capital over the next decade, businesses will need to follow this example by being flexible and providing effective skills development for older workers.

Fran Ferrier, August 14, 2008
My Small Business,


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