April 19, 2017

Aging workforce and obsolete computer systems

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What is an ‘Older Worker’?

According to a Chandler McLeod report: “Coming of Age – The impacts of an ageing workforce on Australian business”, “variations exist in the definition of an employee as ‘older’ or ‘mature aged’. The Department of Education, Employment and Workplace Relations classifies workers and job seekers as ‘older’ at age 45. The Federal Government’s Jobs Bonuses scheme provides financial incentives for employers hiring new employees of 50 years and older. And the Australian Bureau of Statistics defines an ‘older person’ as someone of 55 years and over.

Amongst our respondents, employers and employees are aligned on when they think you can consider someone an ‘older worker’ – generally, around the age of 55-57 years. There is little variation across industries, although perceptions change with age; not surprisingly, as people get older their perception of when someone should be classed an older worker increases.

As more baby boomers enter retirement age and the ratio between the numbers of workers to the numbers of retirees’ rockets, why should Australian business be concerned?

There has been much said in recent years on Australia’s ageing population and workforce participation rates, but while 56% of employers believe that an ageing workforce will have a large or very large impact on their own organisation, they have been largely content to leave the issue to government policy makers”.

The report states that although Government has implemented measures to encourage older workers to delay retirement by targeting both employees (through policy and superannuation changes) and employers (through a range of incentives), they seem to have failed in the intent.

The statistics regarding Australia’s ageing population are stark: in 1970 there were five people of working age supporting each Australian over 65. At current trends, this will fall to just 2.7 by 2050.

Even though there is evidence that mature employees provide a valuable source of productivity and skills, and a willingness to work in challenging and rewarding roles, there is an under-representation of elder workers in the workforce.

According to surveys presented in their report, Chandler MacLeod shows that this underrepresentation is product of older employees simply not applying for jobs.

Ageing workforce at the Government of Western Australia

The Public Sector Commission of the Government of Western Australia proposes a plan to managing an ageing workforce. It states that in line with the rest of Australia, their workforce is ageing, with the current public sector workforce in an average age of 45 years, and over 19% of employees aged 55 years or older.

There is the recognition of the wealth of skill and experience hold by these workers, with the statement that if the majority of these people were to leave the sector within the next five years, the knowledge and labour loss would be substantial. The strategic age management process involves an analysis of the agency’s current situation, a vision of where it intends to be in the future and the necessary strategies to achieve this. In addition, the changing demographics of the labour market and population as a whole must be understood to identify future challenges and the available options.

The challenges for business

Within some legacy businesses, there has been a gearing towards maintaining older computer systems by retaining the staff who have historically been responsible for the customisation or administration of these legacy systems. This circular issue means that the legacy systems are retained in order to justify the retention of the older workforce to maintain them.
Conversely, there has been little focus on attracting Millennial and Gen-Y employees with the approaches that suit them – flexible working hours and locations, new technologies focussed around social collaboration and engagement, outcome focussed instead of adherence to performance management. Large, legacy and monolithic companies are not immediately viewed as an “employer of choice” by younger generations.

This challenge within the staffing of larger businesses, is how to perform the transformational activities of attracting exceptional new employees by providing services and approaches that rival commercial business, whilst still ensuring that there is sufficient retention of the workforce that holds the undocumented knowledge of process and systems.

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