Workforce planning for Australia’s ageing population

Preliminary results of a study

Challenges and solutions

In 1974-75, there were 7.3 working age individuals to support every person aged 65 years or above. By 2054-55, there will only be 2.7 working aged individuals to support every person aged 65 years or above. Health and welfare costs are expected to more than double over the next decade. Despite the government’s encouragement of longer working lives, many older workers continue to retire in their late 50s and early 60s. This trend is leading to a significant skills and knowledge shortage for the Australian workforce because organisations will no longer be able to rely on a steady influx of younger workers.

The focus on employability will be increasingly important when the Australian government develops policies to manage an ageing population. However, the government often considers population ageing as an economic policy problem and relies on economic simulations of welfare reform data to develop policies aimed at increasing workforce participation rates. However, the reliance on economic modelling simulations neglects the fact that many older workers need support to work to and beyond retirement age due to changes in health, care-giving duties and lifestyle preferences.

These simulations also disregard the need to support organisations to cope with the challenges this brings to their workforce. To address this problem, my doctoral research examines organisations and workers’ perspectives on effective strategies that may help manage the process of ageing at work.

Results of a systematic literature review provides evidence indicating the importance of tailoring human resource practices and retention strategies to match older workers’ sense of work identity. Flexible work strategies are often the most effective in aligning organisations’ needs for sustained productivity and workers’ needs for more suitable workloads. Provisional interview results with human resource and management professionals in New South Wales indicate retention and transition to retirement strategies are only effective when older workers perceive them to be in alignment with their changing lifestyle, health conditions and work intentions. Organisations see great value in their older workers and often want to retain their experienced and skilled staff. However, they often find a lack of support from the government to assist their retention efforts because current policies do little to help insure an organisation’s financial risks in keeping or hiring an older worker.

Population ageing is one of the biggest challenges to Australia’s future economic sustainability. These findings have the potential to inform policies to support the needs of organisations that employ older workers and encourage innovative human resource practices used to create better workplaces for a more diverse workforce. Most importantly, they show the importance of engaging stakeholders to find a feasible solution and offset the costs of population ageing. The next phase of this doctoral research will examine older workers’ experiences of using effective human resource strategies to extend their working lives. I welcome organisations interested in this research to join the study and find out what human resource strategies may work best with their workers.

[Source: Irene Mok, Lecturer and University of Sydney Doctoral student,]