Australian businesses will need to be more flexible to accommodate workers of all demographics, especially older Australians, women with children and people with a disability, if the country is to continue to enjoy its high living standards, according to the federal government’s Intergenerational Report.
But the Minister for Small Business, Bruce Billson, and a leading academic on workplace culture told SmartCompany small businesses should not shy away from the challenge of providing more flexible working arrangements and are in fact better placed to do so than larger corporates.
Released yesterday by Treasurer Joe Hockey, the report shows Australians will live longer, work longer and face the pressures of a ballooning budget deficit over the next 40 years.
Billson told SmartCompany small business will be the key to resolving the issues facing the Australian economy.
“The Intergenerational Report makes the case we need to lift productivity in the economy. Now, who’s best placed to do that? It’s the agile, the innovative, it’s the small business men and women that can see it’s an opportunity,” he says.
An ageing Australia
The number of Australians aged over 65 – the current retirement age – is projected to more than double by 2055.
“In general, Australians are living longer and healthier lives than in years past, and are more active in their older years,” reads the report.
“Over the next 40 years, Australia will need to embrace the potential of this talented older population group, particularly by valuing their increased and ongoing engagement in the workplace and community.”
Australian life expectancy at birth is forecast to hit 95.1 years for men and 96.6 years for women by 2054–55, compared with 91.5 and 93.6 years today.
Productivity slows as budget debt balloons
The report shows the average annual labour productivity growth rate over the next 40 years will drop to just 1.5% and advocates for policies that boost productivity and competitiveness, including strategies to further develop a more flexible labour market and workplace relations’ framework.
“To enhance productivity, government will need to continue to focus on reforms that can improve the competitiveness of our businesses and markets, and provide an environment that encourages entrepreneurship and innovation,” said the report.
The report also reiterates the need for continuing budget repair over the next 40 years to stabilise and reduce debt, which could rise as high as $2.8 trillion by 2055.
“The Intergenerational Report makes it crystal clear that a set and forget, sleepwalk into future budget situation is completely unacceptable,” Billson says.
“If we do nothing we face having an extraordinary taxpayer demand that will stifle the very innovation and productivity [needed]…. This is the conversation the Australian nation and our people need have to have.”
Participation must expand
One of the biggest takeaways from the report is the impetrative for the older Australians and parents to re-enter or stay in the workforce for a longer period of time.
“The IGR [Intergenerational Report] not only identifies an ageing of the population, but a much longer period of active economic and social life, which is all about new opportunities,” says Billson, who believes employers must reconsider the benefits of a mature workforce.
“I’ve heard people say 65 is the new 50 – there is an awful lot of economic, social and community contributions a mature person can contribute,” he says.
But Billson says not only will the age of workers increase, so too will the age of business owners and entrepreneurs.
“Ageing entrepreneurs still have a sparkle in their eye, insight and experience to create the new economic opportunities for the future as well,” he adds.
Small business already ahead of the flexibility game
Billson says small businesses are uniquely placed to lead the charge of a more flexible workplace that does not discriminate against older workers or parents.
“That [flexibility] can really align well with small business that are say, looking for an experienced chief financial officer, but they might not need a full-time commitment, so just a few days a week would suit the skilled person and suit the enterprise. Small businesses are already embracing that,” he says.
Leanne Cutcher, associate professor of discipline of work and organisational studies at the University of Sydney Business School, agrees small businesses are already ahead of the curve.
“One problem is that large businesses have a lot structures and hierarchies in place, and a discourse around career projection through traditional ladder steps” says Cutcher, who believes many mature workers want to be recognised for their experience, but do not necessarily want to progress to the next career level.
“In a way, small business is probably doing that anyway, because there aren’t the same hierarchies.”
Cutcher also points to research that shows older workers are generally free of commitment, are more likely to stay with a company and are less likely to take sick leave.
IR reforms needed
The report points to the importance of the Productivity Commission’s inquiry into Australia’s workplace relations framework to boost productivity, and Billson says he urges all small business people to submit their experiences to the inquiry.
“The Intergenerational Report talked about a need for agility, responsiveness, innovation and improved productivity as a part of our national destiny,” says Billson.
“We need to make sure those characteristics are in place in all of our regulatory and institutional arrangements.”