If you’re looking for an achievable way to raise Australia’s economic growth, and by extension, your company’s own success, hang on to your baby boomers for a few years longer.
That was one of the conclusions of a report released yesterday by Melbourne-based think tank The Grattan Institute. It calculated that letting those aged over 55 retire too early would cost the economy $25 billion a year by 2022.
The Grattan report comes hot on the heels of another by human resources firm Mercer. The Mercer study found among Australian employers with large diversity programs, less than half had any focus on age.
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Game-changers: Economic reform priorities for Australia, is, as the Grattan Institute’s John Daley points out in the introduction, a pragmatic report that tried to set achievable priorities.
“This report aims to identify economic reforms that would produce the biggest returns and that would be supported by most policy specialists as desirable and workable,” it reads.
For this reason, things like improving transport infrastructure, industrial relations and education reform didn’t make the list of recommendations. The report instead made three recommendations for change – reform of the tax base, and increasing the participation rate of both women and older workers in the economy.
Fewer people between the ages of 55 and 64 work in Australia than is the norm in countries like New Zealand and America. This leads Daley to conclude huge gains in this area are possible if Australian governments and employers put their efforts into encouraging and supporting older workers.
But Australian corporations struggle with this, Mercer found.
Mercer surveyed employers and employees across the Asia-Pacific, including 71 in Australia, who make a point of having a focus on diversity. Of these, 90% had a focus on gender diversity, followed by 49% who also focused on ethnicity and race, and just 39% who focused on age.
Alison Tickner, Mercer’s head of leadership, diversity and learning solutions for the Asia Pacific, said businesses needed to have broader diversity programs.
“Australia has an ageing population, yet employers are failing to tap into this talent pool as a way to fill skills shortages,” she said. “Business leaders recognise the changing demographics in the workplace is an important issue, yet many aren’t incorporating this into their workforce planning and mentoring programs.”
Companies in the ASX must now report their gender diversity every year. However, there are no such guidelines for other types of diversity, which may be what has prompted more of a focus on gender.
Tickner acknowledges employers may grow weary of all the different groups they are encouraged to target programs towards. She encourages them to focus instead on keeping their workforce balanced.
“I really try to get organisations not to think about diversity and inclusion as an issue separate from their overall business, but to think ‘these are our people, and if we want to attract, engage and retain them, we have to understand what motivates them, what’s on their minds and what their values are’.”
“It’s not about waiting for specific diversity issues to be raised and become a challenge, but about getting ahead of the curve.”
Seven out of ten Australians aged 55-59 are in the labour market (meaning they either have a job or are looking for one), but this figure drops to 51% for those aged 60-64.
Unless retaining an older workforce becomes an area of focus for companies in the next few years, it could cost them experienced and able workers.