Reforms needed to keep older workers in the workforce, say researchers

Date: 19/11/2002

University of Western Sydney researchers say that instead of pushing older workers out the door we should be encouraging them to stay in the workforce for as long as possible.

Professor John McCallum and Ms Jeanine Parsons from the College of Social and Health Sciences believe governments and employers need to reform the workplace in order to stop older workers from making an early exit.

"Research coming out of the European Community shows that about one third of workers aged 55 are leaving work before retirement age because of the disadvantages they experience," says Professor McCallum.

"Older workers still have a wealth of experience and knowledge to offer organisations. By introducing changes such as older worker health insurance, better occupational health and safety practices and increasing the awareness of age discrimination legislation, employers and governments can provide better conditions for older staff and increase their 'work ability'.

"Programs to help older workers re-enter the workforce and more flexible working conditions can also help motivate older people to stay in the job longer."

Professor McCallum says the increasing number of older workers opting for early retirement will put added pressure on our social services.

"We've known for sometime that workforce participation rates for older ages are declining, but what is of real concern now is the growing trend to early retirement," he says.

"In 1997, 77 percent of men and 87 percent of women retired from full-time work during the five years prior to them becoming eligible for the age pension. The attraction of a superannuation lump sum is also proving irresistible to older workers, with retirement rates increasing dramatically at the superannuation preservation age of 55 years.

"The result is lost taxation revenue that early retirees otherwise would have contributed. And with older Australians now expected to live twenty years past their retirement age, it places extra strain on social services in terms of pension outlays and health and aged care costs.

"Governments should be looking to gradually increase the pension age for women so that it is the same as for men, and gradually increase the superannuation preservation age to 60 in order to ease the pressure on the social security system."

And he believes employers need to change their attitudes to the older workforce.

"Many older workers have been caught up in restructures and as a result have been retrenched and forced into early retirement. This is remarkable since research indicates that three out of five employees who face management-initiated retirements would like to keep working," he says.

"Mature age workers who remain relatively handicap free are more than capable of advising, consulting and managing in the workplace. And technological support and work practices can be employed to a greater extent where mature aged employees continue to work in direct labour."

Professor McCallum says we can look to Japan for advice on how to keep older workers in the workforce.

"The Japanese have a high regard for the knowledge and experience of older workers. They've implemented a system of age-related job change called 'Tienen', which allows workers to change from senior positions so they don't have to completely stop work," he says.

"They also have Silver Human Resource Centres, where older workers make the transition from a corporate role to community-centred work. These centres have proved to be very popular and help keep older Japanese active both mentally and physically.

"If we are to lift the current participation rate of workers aged 55-64 years from 49 percent to 59-63 percent as Prime Minister Howard has indicated, it's going to take serious reforms at the worker, employer and government level. Only then will the community have the capacity to finance Australia's ageing population."

Professor McCallum's and Ms Parsons' paper, 'Older Workers in an Ageing Society: The case for legal and policy reform', appears in the Australian Law Reform Commission's Reform, Issue 81, Spring 2002.

Professor McCallum is also hosting a lecture, Human Capital Issues in an Ageing Workforce, tomorrow at the UWS Campbelltown Campus.

Special guest is Dr Judith Davey, Director of the New Zealand Institute for Research on Ageing, Victoria University, Wellington, who will discuss the issue of an ageing workforce from the New Zealand perspective.

WHEN:Tuesday 19 November 2002
TIME:2:00 pm
WHERE:Conference Room 5, Building 22
UWS Campbelltown Campus
Narellan Road, Campbelltown

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