Older workers study useful for insurers, advisers, super funds

This year’s report released on the attitudes and views of older workers on staying in the workforce longer has indicated that it might not be such a big deal to extend our working lives after all. Over 70 per cent of older Australian workers feel good about staying in the workforce longer, and are willing to keep working. The reasons are straightforward: more money doesn’t hurt, but it is undeniable that retiring can actually be a pretty scary concept for many people.

The FSC-CBA Older Workers Report 2015 examines and discusses the Australian workforce and retirement landscape in detail, taking into account changing demographics, an older and ageing population, pressures on government pensions, and the cultural changes we are undergoing as a country as a result.

The 2015 intergenerational report indicates that participation rates of the 65-plus age group are to increase from 13 per cent to 17 per cent over the next four decades, which is a steady increase of a percentage point or so per decade. This is slow compared to the rest of the world, but if you keep in mind that this is thousands of people per year dropping out of the tax-paying workforce who are not being replaced, it starts to look a little more dramatic. Once the numbers are understood, keeping older workers in the workforce longer starts to make greater sense (and takes on some urgency) - there are to be a million Australian workforce departures in the next decade alone.

The study involved a telephone survey of 50-75-year-olds in July 2015, plus ten in-depth interviews with employers and human resources managers across multiple sectors.

Key findings of this year's report include:

Over 70 per cent of older workers are not concerned about remaining at work and are happy to continue working, with the change in numbers here stark compared to 2012 data, with just 53 per cent.

Financial security is a major driver of staying at work, but job satisfaction also plays a huge role – less than 30 per cent of older workers have applied for a new job since hitting 50.

Older workers tend to want to work an extra six years no matter what their financial situation, with 27 per cent wishing to work longer than ten years past their retirement age.

A third of 60-64-year-olds want to work for five years longer, but just 10 per cent expect to work for another ten years.

More than half of workers aged between 70 and 75 have some interest in working, despite the overall enthusiasm for working not unexpectedly declining with age.

This generation of older people are fitter and more active, both mentally and physically, than any generation before them, which directly impacts on their willingness to work and do something they enjoy and are valued for.

Working into retirement is a plan many Australians have, and if it is not paid work, it is voluntary work.

Over 35 per cent of those surveyed said that more flexible workplaces (hours and pay) are influential in their choice to keep working; less than 20 per cent stating that financial incentives would not be the most encouraging factor.

Older workers do not expect to take pay cuts to stay in work, and expect the same or higher salaries than equivalent younger workers, valuing their own experience and knowledge and expecting to be remunerated accordingly.

How older people feel about retirement

Retirement is a big deal, a shift to a different stage of life, and not always the grand end-of-life holiday it's made out to be in the brochures. The main reason given for retiring is that people feel financially secure enough to do so, or in fact not-so-glamorous health reasons. Over 65 per cent of respondents felt comfortable that they had enough money put away to retire comfortably, which is consistent with 2014 numbers, but this is a leap from 2012 numbers, with less than half of those surveyed then indicating that they felt comfortable with their savings level. This is encouraging - markets, savings and retirement confidence have recovered.

Those who retire between 60 and 64 tend to do so because they are financially secure, but once older workers hit 65, health becomes a significant factor - age matters here. Those aged between 50-54 are most likely to retire to spend more time with family and friends, while 60-64-year-olds retire to pursue hobbies and interests. After age 70, retiring due to feeling financially secure is the main reason.

All of this makes Australians ripe for staying in the workforce longer – they actually want to, and where they don’t want to stay in the workforce (outside of health reasons), they can afford to retire comfortably, making the impact on the public purse less hefty.

Age discrimination

In a positive turn of events, age discrimination reports are down – in 2012, 28 per cent of respondents reported being the victim of workplace discrimination based on their age, whereas this study it is only 13 per cent. Just about half of those surveyed have found no barriers to continued work, with about 20 per cent citing health barriers, and seven per cent citing lack of jobs.

With the older workers of today being the last who knew the job-for-life days of working, transitioning to an era where respect for their input is not as highly valued, and in some scenarios not valued at all, is very challenging.

Age discrimination is illegal, however the job market can be tough in certain sectors – competition is stiff, and the perception can be that older workers find certain things more difficult, such as keeping up with technology, though this is not a uniform problem, and extra training can help. It is also equally important for older workers to keep upskilling and ensuring they are employable, as all workers must do to stay competitive.

Self-confidence is a huge issue for older workers, so promoting the value of older workers and supporting them in their jobs is critical for the success of their satisfaction and ongoing work life.

The impact of redundancies

At some point, 17 per cent of older workers say they have been made redundant since turning 50, with men significantly more likely to have been made redundant than women, with more men being in management positions at this stage in their lives than women possibly being responsible for the discrepancy.

Those searching for work after being made redundant reported finding it hard, and perceptions of finding work after redundancies later in life are poor.

Overall, the outlook for increasing the years Australians work is very positive, with continuing efforts to be made on becoming more inclusive and promoting the .valuable role of older workers within the Australian job market.