PORTFOLIO POINT: Older workers will be crucial for Australian productivity in the years ahead, and there are several areas businesses will need to focus on in order to attract and retain this cohort.
This is a commentary that will not apply to all readers, but I believe it will be of great help to many people. Pass the message on...
The sharemarket has bounced back, but this week’s fall on global sharemarkets triggered an emotional reaction among many would-be retirees, led by those in their 40s and 50s – and especially women. You could almost hear the words: 'Eureka might have been right and I should not panic, but the fluctuations are scary – I need to take control’.
During the week, I had a number of conversations along these lines, and I am sure what I was hearing was widespread. Until recent times, the financial planning industry had told people approaching retirement that the stockmarket would provide the returns they needed. Many were urged to take 70% equity, which really makes people scared when the market falls. Of course, you must look to the longer term, but the sharemarket has not risen in the last five years. The long term may deliver the goods, so it’s possible that the financial planners will be right, but what if they are wrong? 'Taking control’ of your retirement prospects will mean working many years longer than was originally planned for many people. This is particularly important for women, because in a great many cases they have not thought clearly about their retirement and left the matter to their spouse or partner.
It so happens that this interest in continuing to work longer than anticipated takes place at a time when a rising number of companies and organisations are suddenly realising just how valuable older people, and particularly women in their 40s and 50s, can be to an organisation. Later in this commentary, I am going to give you a video link which shows how Westpac has suddenly realised that its marketing operation needs to be oriented particularly towards women in their 40s and 50s. The only way to do this was to have older women as an integral part of the marketing thrust. And it so happens that women aged between 40 and 50 are now Australia’s largest consumer group. What Westpac is doing is going to be repeated in many other workplaces, as companies wake up to this market. If you are aged between 40 and 50, or know people who are in that age bracket, then these comments may be of value. In looking at the needs of older people, I have been assisted by Ernst & Young’s Louise Rolland and Productivity Spectator’s Jackson Hewett. Louise Rolland has undertaken research into what motivates older people to stay in the workforce. I am using that research to understand what motivates older people seeking work, and have concluded that there are four aspects of work that are important.
First and foremost, you need good management and a good manager. Younger people can put up with bad management because the particular job is merely a stepping stone. Older people will normally want to engage with the enterprise and engaging with a badly managed operation is not a pleasant experience.
Secondly, you need flexibility. In theory, older people can return to the old 8.00am to 6.00pm routine which has dominated the careers of people like me. But in your older years, you have developed other interests, including family, and so work flexibility becomes really important. Moreover, you have become smarter. The idea of trudging long distances into a capital city each day and trudging back again has little appeal and there is no need to do it. I undertook that trudge for more decades than I would care to mention, but thanks to the internet I don’t do it now – and it’s wonderful.
The problem is, of course, that very few Australian companies are organised to provide worthwhile jobs for people who want to work flexibly. In the main, flexible jobs are confined to low-paid routine tasks. Yet I detect, in talking to CEOs, that not only are they starting to realise that they do need the help of older people to tap into this large consumer market, but that older people generally possess much greater levels of staff engagement than those who see the job merely as a stepping stone. Large corporations and government organisations have not been able to tap this talent, because their workplaces do not offer flexibility for people with talent, and Australian productivity has suffered as a result (although it is changing). I must also emphasise that organisations which offer flexibility will also expect it in return in situations when the pressure is on.
The third aspect of working in later years will surprise many – older workers need training. Again, in most organisations training is reserved for younger people. But older people need training in the new technologies and in modern ways of operating. Just as older workers may demand flexibility in terms of hours worked, so their employers will want flexibility in tackling different tasks; to do that, workers will need training. What is fascinating about the research is that training for older workers increases their sense of job satisfaction. The workers say: “I know that when I am educated in new systems and techniques, I find new projects a joy to work on”. And that training provides a higher level of interest for aged working people.
Fourthly, you need job content that is interesting. You may not have anticipated working late into your 60s, but now you are back, the job needs to be interesting and challenging. If the job is routine, you will get bored.
And finally, of course, you need to put as much money into superannuation as you can. As we have discussed, your level of equity needs to be at a percentage that you are comfortable with, not what some financial planner selects to boost their returns. And if you have any doubts about the fact that companies are now beginning to place greater importance on older workers, or you need more motivation for yourself or friends, click on this video introduced by Alan Kohler, which explains why Westpac and Stockland want older female employees.