An increase to the retirement age may herald good news for small and medium sized business owners as the government moves to raise the pension age to 70.
Under changes being considered by the Abbott government, the retirement age may be lifted to 70 as soon as 2029 after the former Labor government increased the pension age from 65 to 67. The phased increase begins in 2017 and rises to 67 by 2023. It is expected to save the budget about $6bn a year.
Executive Director of the Council of Small Business of Australia, Peter Strong, acknowledged the budgetary pressures driving an increase to the pension age but said there were benefits for businesses in employing older Australians.
“In certain sectors they bring a lot of positives, in the finance sector and real estate, the longer you’ve been in those industries, the more valuable they are,” he told Dynamic Business. “They don’t take days off, they value the job, they value the friendship, they’re more mature. They’ve learned as you go through life to treat people with respect.”
Chair of leading business network The Executive Connection, Nigel Stoke, has also said business needs to do more in order to adjust to a higher retirement age and capitalise on the benefits of a more mature workforce.
“If people are going to be staying longer in the workforce then we need to see a greater commitment to adopting tools and strategies to successfully manage a workforce spanning several generations,” he said. “Development tools such as cross-generational mentoring need to be expanded to foster improved generational understanding and relationships.”
A report released last month by The Executive Connection, Finding the Gold in Silver Hair, found that older workers could be more reliable than their younger colleagues and bring extra experience and diversity to the workplace.
For example, it found workers aged over 55 were five times less likely to change jobs than those aged between 20 to 24. Older workers were also less likely to take days off due to illness or injury.
The study cited Ernst & Young’s Australian Productivity Pulse survey showing that 80 per cent of respondents aged between 55 and 60 said they were motivated to perform to the best of their ability, compared with only 65 per cent of those aged between 25 and 34.
However, the report also identified key areas where businesses would need to adapt their HR strategies. It suggested introducing more flexible work arrangements allowing older employees to work from home, the trading of salary for additional leave and phased retirement plans.
It found not many businesses had planned for the coming demographic change, citing a study by the Economist Intelligence Unit showing that only 18 per cent of respondents had a policy in place to manage a rising number of older workers.
Age discrimination commissioner Susan Ryan warned earlier this month that age discrimination needed to be addressed if the increase to the pension age was to succeed.
“The immediate crisis we face is one of older people being forced out of the workforce when they are, in a great many cases, still able to make high level effective contributions to business,” she said in a statement.
“In an era when we are always hearing about the reduced available workforce in our country, it is irrational that older people continue to be one of the great overlooked and ignored solutions.”