Meeting the Challenges One Year On
Speech by Diane McEwan, Assistant Secretary, Mature Age And Youth Policy Branch, Department of Employment and Workplace Relations
Age discrimination in the workplace is a very real but often hidden problem. There is little statistical data showing the full impact or incidence of age discrimination occurring. The statistical employment data for mature age people tell a different story.
While the unemployment rate for mature age persons is well below that for 15 - 44 year olds, older people often face significant difficulties finding subsequent work once they become unemployed. The average duration of unemployment for a mature age person is 64 weeks, compared with an average of 29 weeks for those aged 15 - 44.
Preliminary data from a survey conducted by the Department of Employment and Workplace Relations earlier this year, that a sked employers a range of questions relating to the employment and retention of MA workers, suggests that it has become much less socially acceptable for employers to admit the potential for age discrimination in their workplaces.
However, there is still a marked discrepancy between the 97% of employers who indicate they would be willing to employ a mature age person and the 35% who have actually done so in the last 12 months.
Almost a year since it came into effect, we believe the Age Discrimination Act is a very important tool in battling the incidence of age discrimination in the workplace - both as a direct preventative and as a general influence on the attitudes of employers. However, in some ways the Act has had only a modest impact and we need to promote it further if we are explore its full potential for change.
In my Department, we hear over and over from mature age Australians who testify that age discrimination in the workplace is alive and well. The anecdotal evidence is clear.
Even in the last couple of months we have answered dozens of letters from mature age people in the grip of extreme frustration at not being able to find a job. And contrary to some opinions, these letters are not all from retrenched manufacturing workers, although we see these too.
Take the example of the social researcher retrenched after a restructure in 1992. He took the opportunity of this 'career break' to further his skills and completed a PhD in 1997. After more than 240 job applications over the intervening eight years, he has been unsuccessful in obtaining another position in any capacity, at any level.
Or what about the 60 year old woman with a 37 year career in clerical, accounting and administration work. Since moving towns last year she has been unable to even obtain an interview, despite applying for numerous full and part time positions.
Then there is the example of the 50 year old IT professional who, after five years of un- or under-employment, has become so disillusioned about the lack of opportunities provided to older workers that he has resigned himself to working in a bottle-shop.
There is a sad and terrible theme coming through in these letters. These are people who are willing to work, who want to work, but can't find an employer willing to take them on. It is this type of situation that makes the Age Discrimination Act so important.
However, we know that in order to combat age discrimination successfully, the issue needs to be approached from multiple directions. In addition to the legislation, we must also work at changing the community's mindset away from early retirement. We must ensure older job seekers are equipped with the training and flexible approach needed for today's workforce. And most of all we must ensure that employers, large and small and across industries, are aware of, and acting on, this issue.
But there is some good news for MA workers still struggling to find employment. The impact of demographic change in the Australian workplace, while challenging in some respects, actually has the potential to help MA jobseekers and workers and reduce the incidence of age discrimination.
It has become more widely known that we are experiencing a population bulge at the "top end" as the baby-boomer generation makes its way into older age and into retirement. According to the latest estimates from Access Economics , the ratio of people over 65 to those 15 to 64 will double over the next thirty years. Towards the middle of this century, after the baby boomers have retired, there are likely to be only 2 people of working age for every person aged 65 years and over.
On the workforce front, we are facing a looming problem. The working age population currently grows by around 180,000 people every year. But trends already in place will see the working age population grow by just 175,000 for the entire decade of the 2020s - less than a tenth of the current pace.
The initial pressure on the labour market comes from the current trend for people to retire early from the workforce. We are facing a huge drop in the labour supply in the next five to ten years as many baby boomers move out of the market.
We also know that the shrinking number of younger workers entering the workforce will mean greatly increased competition for younger workers. Companies that traditionally rely on younger recruits may find that they can no longer find enough young people to fill their positions.
An overall decrease in the available labour supply will lead to an increase in costs as competition for labour becomes more intense. This will lead to a cut in profits and dramatically increase the chance of business failure.
Now, these are longer term arguments. Our experience is that many organisations are aware of the issues but are not doing anything about it; they are not taking a long term view in their planning. So if the long term view doesn't generate action, let's look at the short term.
The Australian labour market is already very tight. We have a historically low unemployment rate in Australia and this means there isn't a large pool of prime working age job seekers simply waiting to be picked.
Many businesses are also beginning to recognise that in order to ensure continued customer satisfaction and therefore business health, they need to match their staff with Australia's changing demographic profile.
We are seeing mature age workers leaving the workforce faster and earlier than ever before - sometimes voluntarily and sometimes not. In many industries this is leading to increased demand for skilled workers and even severe skills shortages.
We are seeing a dramatic loss of corporate knowledge. This knowledge is the product of a long-term investment in training and experience and is difficult to replace. On top of this is the time consuming and expensive process of recruiting and training new staff.
Workforce productivity and growth are major factors in overall economic growth. If the growth of the workforce slows, then that will have dramatic consequences and implications for all Australian businesses, including the government and community sectors.
How businesses respond to the changing nature of the labour market will ultimately determine their success in maintaining access to a viable pool of labour in an increasingly competitive environment. This is not something that can be ignored or avoided - these are the facts.
Businesses need to broaden their scope and look outside their traditional recruitment sphere in order to find the employees they need. This means targeting people who once may not have been considered as desirable employees - including mature age workers.
It is for this reason that the Government is focusing on increasing participation as a major response to the ageing of the population. Improving the participation in the workforce of disadvantaged groups such as mature age workers is a viable option for maintaining the labour supply. Improving the retention rate of older workers is an obvious and clear response to this looming problem.
What we need to create, as far as is practicable, is an ageless workforce - a workforce based not on age, but on talent, skills, experience and willingness to work.
To assist in this process, the Commonwealth Government is working to remove the structural barriers to employment faced by mature age people.
The eligibility age for the Age Pension for women is gradually being increased to match that of men - 65 years old.
The Pension Bonus Scheme has been introduced to encourage people over Age Pension age to defer claiming Age Pension and continue in the workforce, if they are willing and able to do so.
The Superannuation Preservation rules have been changed to gradually increase the preservation age from 55 to 60 between 2015 and 2024 for people born after 1 July 1960. From 1 July this year, the superannuation rules will also become more flexible to allow mature age people to phase gradually out of the workforce.
Currently before Parliament is the proposed introduction of the mature age worker tax offset, which would provide a maximum offset of $500 each year for workers over the age of 55.
The Government has actively encouraged the spread of regular part-time work by removing unnecessary and restrictive award provisions such as limits on the number of hours that can be worked by part-time employees.
In addition to this, the Commonwealth is currently examining its programmes to ensure they are compatible with the Act.
We are working on both the supply and demand sides of the labour market to improve participation by mature age people.
We are in the process of implementing the Mature Age Employment and Workplace Strategy, which was announced in the 2004-05 Federal Budget.
The Strategy addresses a range of mature age employment issues. It takes a holistic approach by focusing on employers, mature age job seekers and mature age workers.
The Strategy is working to achieve a number of goals: to overcome negative attitudes to mature age employment, improve the awareness of employers and mature age Australians to the changing demographic environment and broker solutions to skill shortages in key sectors. The Strategy also provides training and resources for mature age people to help them find employment.
One of the key elements of the Strategy is the development of the Jobwise website. Jobwise includes up-to-date information for older job seekers, workers and employers. And, of course, some explanatory information about the Age Discrimination Act and links to the HREOC website!
A new feature launched in March this year allows employers to register on the site as a mature age friendly organisation. While the feature is very new at this stage, we anticipate that more and more employers will list on the page. In addition to promoting a more age-positive attitude amongst employers, our hope is that this facility will also allow mature age job seekers to better target organisations in their search for employment.
While we know that it is important to equip mature age people for participation in the workforce, we also need to ensure there are companies prepared to employ them.
To facilitate this, we are actively working with employer bodies and other interested groups to promote awareness of the benefits of recruiting and retaining mature age workers. We are facilitating discussion of the issues amongst large, medium and small employers, recruitment professionals and academics.
We are promoting mature age focussed workforce planning to employer bodies and are currently in the process of developing voluntary Mature Age Employment Guidelines for the use of individual employers. And we are developing mature age employment strategies within specific industries.
One of the industry strategies now underway involves my Department working in partnership with the Recruitment and Consulting Services Association to present a series of seminars to practitioners in the recruitment industry on age management in the workplace. We believe that the recruitment services industry are in a unique position to influence the recruitment practices of a huge range of organisations.
In the Budget announced last week, the Government allocated $50 million for the 'Welfare to Work - Employer Demand Strategy'. This strategy will operate over the next four years to increase workforce participation in key industry sectors for disadvantaged groups, including mature age people. This initiative will complement the other changes announced in the Budget that are designed to improve the participation of mature age people.
My Department has introduced the Mature Age Workers' Employer Champion Awards to recognise employers with a proven record of implementing age positive human resource policies. So far, five organisations in Australia have been awarded and we are hopeful that this will grow.
The Department is also sponsoring a new award at the Australian Human Resources Institute Awards to be held in October this year - the 'AHRI Innovation Award 2005 for Initiatives in an Ageing Workforce'. Here again, we are targeting people with the potential to make big changes to existing policies and practices.
We are aiming to ensure that all recruitment practices are focused solely on talent, not age, and have started by targeting this key industry.
Now, the interaction of the Commonwealth Government with the Age Discrimination Act occurs on two fronts.
Firstly, as I have just described, we create and implement public policy.
Secondly, we ourselves are employers. It is our belief that Government should take the lead in developing and implementing policies for an age-balanced workforce. We don't believe we should ask businesses to do this without showing we can and will do it ourselves.
In 2003 the Australian Public Service Commission produced a package of materials entitled "Implementing organisational renewal: Mature aged workers in the APS" to assist agencies to respond to demographic change in the APS.
The Commission's work on this ongoing. Next month it is hosting a workforce planning summit for Government agencies entitled "Meeting your future workforce capability - attracting and retaining mature age workers". vA number of individual Government agencies have already established internal policies consistent with the APSC's framework. These policies are actively promoting the recruitment, training and retention of mature age workers through flexible workplace practices.
In my Department, for example, we have introduced the DEWR Maturing Workforce Strategy. This is now an integral part of our overall workforce planning strategy. In the same way that we've made progress in making our workplace at DEWR "family-friendly", we are now working towards ensuring our workplace is "age friendly".
Whether we are talking about initiatives inside our own Department or those aimed at the broader business community, we know that the policies we are implementing may take time to show lasting results.
We are trying to change people's attitudes. We all know that is a slow and challenging process. But it is also extremely worthwhile.
Over time, in many different ways, we are fully expecting to see the positive effects of the Age Discrimination Act become more and more apparent as attitudes and practices change. And perhaps one day, the Act will no longer be needed.
1. DEWR 2004 Employer Survey, conducted February / March 2005. Report to be released later this year. 6000 employers surveyed; only 1500 completed MA employment module of survey.
2. Unpublished data supplied to DEWR by Access Economics (2004); update from figures in 2001 report Population Ageing and the Economy
3. Coates Hire Limited, Westpac Banking Corporation, Aurora Energy (Tasmanian hydroelectric company), Magnet Mart (hardware chain), Socobell OEM (plastics extrusion company)
Last updated 18 May 2005.