Are you the retiring type?

| April 2, 2013

As we launch our Productive Ageing featured forum, Age Discrimination Commissioner, the Hon. Susan Ryan, explains why aged workers are vital to Australia’s economy.

Working doesn’t always feel good, but it can be good for your health – especially as you age. Recent research suggests the more active people are, the more likely they are to maintain good memory and cognitive ability well into old age. It’s no wonder many older people would like to keep working.

Businesses also benefit from an older workforce. Research by the Australian Institute of Management states businesses that employ older workers draw from a wider and deeper pool of talent. Older workers bring with them experience, corporate knowledge, and an ability to personally relate to older customers.

The economy and community are better off when people keep working as they age. The loss to the economy of not using the skills and experience of older people has been estimated to be $10.8 billion a year.

The number of working age people to support each retiree is significantly declining. In 1970 there were 7.5 people of working age to support every person aged 65 and over; today it is 5, and by 2050 it is projected there will be only 2.7 people of working age to support each retiree. While participation of older people is increasing, only one out of three Australians over 55 is in the workforce. In 2011, Australia ranked ninth out of the 34 OECD countries in a study that measured labour force participation rates in the over 55s.

The more people who are able to participate in the workforce, the more productive the economy as a whole will be and the more the economy will grow. Access Economics found that a three per cent increase in workforce participation of people aged 55 and older would result in a $33 billion boost to GDP – or around 1.6 per cent of national income.

Facilitating workforce participation of older Australians is not just good for the economy and community, it is absolutely vital. As the population ages, more will need to be spent on age-related pensions, aged care and health.

The evidence and arguments demonstrating the benefits that flow from retaining older employees is vast. Yet, millions of older Australians are locked out of the workforce. According to ABS data, one in five older Australians aged 55 years or older who were actively looking for more hours claimed that their age was a major preventative factor, explaining they were considered “too old” by employers. This is a waste; of individual talent, of business opportunity and of economic contribution to our community.

This is also age discrimination. Out of the 196 complaints made to the Australian Human Rights Commission in 2011-12 under the Age Discrimination Act 2004, 134 related to employment. That is 65 per cent of age discrimination complaints. These figures are just the tip of the iceberg.

Age discrimination, like other forms of discrimination, can arise due to negative stereotypes. Some employers and recruiters assume that older people have less energy, capacity, and higher incidents of illness. This is far from true. Another mistake often made is to assume that all older people are the same. There is great diversity both between and within generations of older Australians.

One of my key challenges as Age Discrimination Commissioner is to shine a spot light on age discrimination and tackle the stereotypes that arise as a result. Since commencing in my role in 2011, I have advocated the business case to the corporate sector of the need to facilitate workforce participation of older Australians. In 2012 I hosted a national conference entitled: Older Workers and Business Growth: harnessing the productive potential of older Australians. The conference was supported by national employer groups and CEO’s from varied business sectors.

Participation by older people in the workforce has benefits on every level – from individual health outcomes and good business sense, to broad economic benefits for Australia. Yet, our community has been slow to recognise the waste of human capital caused by age discrimination.