In our youth-obsessed culture, we tend to write off the elderly and even the middle-aged as having little or limited economic and workforce value.
This waste, of people and business opportunities, needs urgent attention.
While the economy is booming, the government is sending a clear message to employers—beware of skill shortages. This issue is particularly important for small business.
A recent small business survey conducted by CPA Australia found one in two small businesses can’t compete with large corporations in attracting skilled staff. Those surveyed felt they were unable to match the lure of higher pay and job perks offered by larger businesses. And with the baby boomers entering their twilight years, there is a lot of concern in the business arena about what effect their looming retirement will have on the labour market.
According to ABS data, in 2003 close to a third (32 percent) of people participating in the workforce were aged 45 to 64 years, up from 24 percent in 1983. The industries employing the most mature-aged workers were education (47 percent); agriculture, forestry and fishing (43.6 percent); and health and community services (42.3 percent).
According to Professor Louise Rolland, chief executive officer of Business Work and Ageing (BWA), labour supply shortages caused by our ageing population are set to increase by the end of this decade, sooner in some sectors, which she says will mean some increase in demand for the talented workforce.
This is already happening in many professional sectors, such as accounting, engineering, and some areas in the financial sector, such as financial planners. There are also shortages in areas that have traditionally relied upon a steady increasing flow of young interested workers, particularly in hospitality, retail and in some manufacturing areas.
Rolland says a significant challenge facing Australian businesses is the way we deal with people as they age. "Businesses in the past have preferred to let people go in the older age group, rather than actively retaining them and making sure that they’ve got the skills and motivation to remain productive." To address the issue, Rolland says businesses need to fully understand the age profile and dynamics that are active in their individual organisation.
This includes looking at how training resources are allocated and who is participating in what type of training. As people get older, Rolland says, they are participating in training less because individuals often see that training is not relevant to them, and managers are less likely to approve certain types of training for older people. "Once you hit 45, it is pretty unlikely that you’re going to be allocated that type of training. Even if you have 25 years’ worth of work still left in you," she adds.
A big part of addressing the issue is getting over our age bias in recruitment, as well as convincing older workers that organisations have genuine opportunities for them. "It’s important that the person making most of the final decisions around recruitment in your business is aware of this imbalance, and develops better recruitment policies," says Rolland.
Another key area is productivity, in terms of how learning and development affects motivation, health and wellbeing. "One of the really important areas is e-knowledge," Rolland adds, so people have the technological skills and knowledge to adapt to change in technical environments.
Policies also need flexibility, especially around reducing hours rather than reducing the level of responsibility as workers age.
Instead of looking at the individual, Rolland suggests building internal strategies to understand these demographics and how they will impact on your organisation, as well as integrating your age management plan into your workforce and planning agenda. "Organisations need to see their age management strategies as a holistic strategy," says Rolland. "It’s not just about increasing the management skills for the proportion of older workers, it’s also about actively, and some say aggressively, competing for their share of young talent and focusing on strategies to retain that talent."
To manage the labour supply in the future, Rolland says it’s crucial that we address the issue of retaining those in the 55-64 age group. "We have to do that if we are going to manage our labour supply into the future. In the same capacity, we need to make sure we are managing our young people well."
"The US has enormous global pulling power when it comes to competing for skills and knowledge," she says "which means competition for recruiting skilled young people." Given that it will be the numbers of skilled young people that are decreasing proportionately in the workforce, she adds, businesses need strategies to cope with lure to work for big bucks in prestigious jobs in the US.
Businesses need to think about how to deal with the transfer of knowledge when an employee is looking at retiring, and implementing flexibility to allow an employee to phase into retirement. "This transfer of knowledge is so important, even more so in small business because they don’t have the backup that larger companies do," she says.
"I think that, across the board, if businesses aren’t thinking about how these demographics are going to shift the needs and wants of their consumer markets, then they are missing out on a great opportunity."
The Victorian Association of Health and Extended Care (VAHEC) is a member-based organisation providing support services for 70 percent of Victoria’s aged care providers, representing residential care, community care and some retirement living.
According to its CEO, Mary Barry, the industry has experienced many changes and will continue to do so with the rise in the ageing population. "It’s definitely a growth industry, and there will be more and more demand for services," she says.
"The dilemma we have with most of our ageing population is that they are asset rich and income poor, with more than 80 percent of the aged population on full or part pension. So there will be a big push for government to fund more and more community care services. And there’s also a big push for people to convert their assets into finance and cash to be able to purchase services.
"The issue here for businesses is that older people will be looking for financial products we’ve never had before, especially those who are finding they don’t have enough superannuation to maintain lifestyles they are used to. New loans and financial groups are already starting to target this market.
Managing staff shortages are also a big problem for the growing and ‘unsexy’ aged care industry, says Barry. "We’re finding shortage of nurses—people don’t want to go into nursing."
This is exacerbated, she adds, by unequal government funding between the health and aged care industries. "So there is the image problem, but the other problem is the way governments fund health and aged care systems."
Another issue affecting the aged care system is that of ‘user pays’ versus government funding. "Either we bring in ‘user pays’, or there should be more taxes," says Barry of the out-dated aged care policy.
Under the current system, designed in the 1980s when only eight percent of the population was 70 and over, taxpayers are contributing over 70 percent to the costs of aged care. "We’re heading for a situation where we will have 25 percent of the population aged 65 and over—can governments and taxpayers continue to fund 70 percent? If the answer is no, then we need to get more ‘user pays’ into the system," explains Barry.
For anyone wanting to cash in on this growin
g industry, Barry says: "Know your market, know how the industry works, understand the regulations and make sure you fully understand what you’re getting into."
One growing business opportunity Barry suggests is in the community care area, with many private agencies setting up home care businesses. This industry is booming, she explains, thanks largely to the lack of building or infrastructure required. It is also fuelled by seniors wanting to stay in their own homes for as long as possible.
Businesses already recognising the importance of mature-aged workers:
• Workingconnections, part of the not-for-profit Over 50s Association, is a job-matching service for mature-age workers and employers (www.workingconnections.com).
• Solutions Management is a website development and marketing company for small and micro businesses, with 50 percent of staff over 40 years of age.
• GuardianAngelPeople provides locum managers to business owners needing a break from the office. Terry Sheridan started the business after being told at 53 years of age that she was unemployable. Some of the mature-aged Guardian Angels are semi-retired, but many are those who have been retrenched or made redundant (www.guardianangelpeople.com)
What are the interests and passions of this market and how do you attract them to your services? Philip Smith looks at how targeting this significant market can offer opportunities and rewards to businesses.
Six key areas shape the motivation of the ageing population: health, travel, family, education, hobbies/interests and financial security.
As a society we are living longer, so good health care is important. There is an overall trend in the general population toward preventative health behaviours. In-demand businesses will be those offering preventative measures, including food alternatives like organics; those that encourage and support exercise, such as gyms and recreational sport; or those encouraging better physical and mental wellbeing, such as physiotherapists and alternative therapies.
There will also be an increase in demand for many support services that promote a better quality of life for the ageing in our society. These include pharmaceutical, massage, doctors, alternative therapies, trade services and household modification, transport and nursing care.
There are significant business opportunities in the travel sector. Having more time on their hands, many seniors choose to spend their twilight years travelling. The type of travel varies, depending on interests. It may be several months of domestic or international travel, or short breaks either visiting their children or a few nights at a country bed and breakfast.
Family is largely important, and activities and interests that bring the family together are often welcomed and encouraged by the elders in a family. Likewise, this demographic is more likely to spend money on their family, especially grandchildren, with gifts and education contributions being popular.
Seniors are increasingly enrolling in learning institutions, whether it’s TAFE, University of the Third Age, or university and community college. There is huge potential for business opportunities related to educational support such as computer technology, and books, tapes, CDs and DVDs for tutoring and coaching.
Many seniors still enjoying good health tend to take up a variety of hobbies and activities. Interests are varied and include gardening, cooking, reading, music, volunteering, computer and electronic related activities, restoration, fishing, boating, collecting, entertainment, needlecraft, church and local community group activities, animal watching/breeding and photography.
Seniors need good financial management to undertake these desirable activities. Supporting themselves with superannuation and investments, seniors are becoming more financially independent. And for some this will include staying in the workforce longer—at least in a part-time capacity. Financial management services will be increasingly in demand by this demographic to help manage finances into retirement.
Attracting the Grey Dollar
The following four business service behaviours will serve to strengthen relationships with the senior market:
Offer value. Value is important to this market, but this doesn’t mean the cheapest product. Seniors will pay for quality products and services. Value includes guarantees and ongoing service if there are issues or problems. Offering seniors discounts also indicates that you appreciate and value their business.
Show respect. Treat them as valued customers, not doddery old fools. Think about the appearance of the outlet—the decor, type of music being played, and allocation of seating. The age and maturity of the staff is also important. Having staff who can relate to these customers may promote sales. If seniors feel comfortable with your business they will reward you with loyalty.
Provide information. Two factors drive desire for information: time and caution—a need to be sure they are making the right decision. Therefore providing information and assistance is important. This could be through demonstrations (including video), how your staff interacts with customers, and training courses. All these can serve to make them feel confident in the decision they are making.
Convenience services. Baby boomers are used to convenience and will continue to use these services. Businesses that offer convenience services will prosper in this market. This includes household services, such as lawn mowing, gardening, and cleaning; and food, be it home delivery services, prepared meats and vegetables, or coffee at the local cafÈ. Beauty related services such as hair and body care will also increase in demand, for men and women.
* Philip Smith is qualitative research manager for Environmetrics, a social research consultancy gaining understanding of perceptions and trends related to motivation.