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Contact: Kyahn Timms
Tel: +61 3 9866 4722

Australian
Melbourne, 5 March 2008

Workers aged 55 and older, particularly women, appear to be the answer to the ongoing skills and labour shortage – not generation Y – and Australian employers must consequently shift their focus from young to old to maintain productivity.

Research findings released today by global firm Mercer, reveals that by the year 2012 the amount of workers in the labour force aged 55+ will increase by 14% whilst the amount of workers aged 25-54 will increase by only 5%.

Furthermore, the amount of women aged 45+ will increase by 12% whilst the number of men in the same age group will increase by only 6%.

Mercer commissioned economic consultancy, Econtech, to model the profile of Australia’s workforce in 2012 to help employers identify where the future workforce will grow, and potentially shrink, the most. The research highlights the importance to shift the mindset of employers today, to think about and plan how Australians will work tomorrow.

The research debunks the notion that employers should only be focussing on how to attract and retain generation Y and enforces the reality that workers aged 55+ will be the productivity drivers for Australian businesses in the immediate future.

Head of Mercer’s retirement business, Mr Tim Jenkins, said by looking four years out, the research highlights the urgency for employers to act immediately.

The urgency is further heightened in some industries with employment demand expected to increase 18% in the construction industry; 13% in the accommodation, café and restaurant industry; and 12% in the wholesale industry, but with no guarantee that demand will be met with supply.

“To take pressure off wage increases, which comes with this increased demand, employers have to hold onto older workers about to exit the workforce,” said Mr Jenkins.

“Australian employers have to re-define what the average daily and weekly job looks like and how it is remunerated in order to hold onto older workers, maintain productivity and keep downward pressure on wages that, according to our research, are forecast to rise at an average annual rate of 4.2% between now and 2012.

“The fact that the workforce is ageing is not new as the twin issues of the skills shortage and the pending wave of retiring baby boomers seems to have been debated perennially.

“But this research clarifies and cements the fact that one of the biggest business risks in Australia in the immediate future is not just economic factors – it is the seismic demographic shifts occurring that will threaten the sustainability of many Australian businesses.

“In four short years there will be close to a quarter of a million more workers aged 55+ in the Australian labour force and assumptions about what an employer should expect from an employee, and vice versa, have to change.

“This is not about changing a few HR policies. There needs to be a shift in the mindset of how, and for how long, Australians work.

“Balance in the workforce is no longer just about men and women – it’s about the young and old,” said Mr Jenkins.

Mercer’s research found workforce participation rates will decrease in all states and territories across Australia between now and 2012. In Tasmania and the Northern Territory the supply of labour is not expected to meet the demand due to an ageing population and low population growth. Participation rates will decrease by 3% and 2% in each state respectively.

Mr Jenkins believes the research poses a number of questions to employers such as how many jobs really need to be full-time, all of the time? How many part-time workers are needed to deliver current and future productivity requirements? How do you fill entry level jobs when the available labour force is dominated by experienced 55+ workers?

“The stigma around part-time work not equating to a career or a promotion, or part-time workers not being as valued as full-time workers has to change and employers are going to have to create more part-time roles as career roles.

“Workplace 2012 will be dominated by the race to keep skilled workers. If businesses remain complacent in changing their focus and approach to the workplace they won’t have the necessary workforce to remain viable.” Mr Jenkins concluded.

About Workplace 2012

Mercer's Workplace 2012 is a series of research, industry forums, analysis and leading thinking about tomorrow's business trends and the impact on business today.

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Contact: Kyahn Timms
Tel: +61 3 9866 4722