What is your business doing to prepare for an ageing workforce?

While “The Great Resignation” became a focus in 2022, less attention has been given to what is now being termed “The Great Unretirement” as older workers over 65 make up an increasing proportion of our workforce. Employers need to consider this as part of their overall workforce strategy.

Time to read: 5 mins

In a 2022 press release introducing the Government’s Older Workers Employment Action Plan, Minister Dr Ayesha Verrall stated that “almost half of all New Zealanders aged 65 to 69 are employed”. This is a significant number. Stats NZ highlighted that in “1991, just 1 percent of the labour force was aged 65+. In June 2021 the 65+ share was 6 percent; this is projected to increase to 9 percent in the 2030s and 11 percent in the 2060s under the median projection”. Our life expectancy has also increased, as the Retirement Commission highlights, “since the 1960s, the life expectancy for men has increased from 68 to 79; for women it’s gone up from 73 to 83”. 

At the other end of the spectrum, we have declining numbers of students in our schools, which will impact on our workforce. In December last year, a Ministry of Education forecast showed a steady decline in school children numbers. Primary school rolls are projected to drop by 5.3 percent or 27,520 children between 2022 and 2032, and secondary school rolls to increase 5.1 percent between 2022 and 2025 before declining by 5.6 percent or 17,280 students by 2032. Intensifying this trend, the number of babies born has declined from a high of 4.3 per woman in the 1960s, to 1.8 today (Retirement Commission). 

So what is driving The Great Unretirement? Economic necessity is undoubtedly a contributor, as shown when New Zealand Seniors recently commissioned a Working Seniors Report that surveyed 500 people over the age of 50. Forty-one percent of participants had reportedly modified their retirement plans due to the pandemic, recession fears and rising costs of living. However there are other factors. Age Concern New Zealand has identified a number of these including the benefits of ongoing employment for maintaining social connections, keeping physically and mentally active, staying busy and having a sense of purpose; enjoyment and learning, and contributing to the community. 

As we know, in New Zealand there is no compulsory retirement age and it is illegal to discriminate on age. There is nothing magical about turning 65 except that many qualify for Government Superannuation and the Gold Card. The reality is that we need to be catering for an older workforce given the challenges in front of us. 

So what are the perceptions and experiences of older workers in New Zealand? Again citing the Working Seniors Report 2023, 60% of participants who had, or were considering re-entering the workforce, going full time, or changing their career paths were expecting to face some barriers to employment. These barriers include: 

  • Age discrimination in the hiring process (64%)
  • Employers perceive they are overqualified or too expensive (47%)
  • Technical skills falling behind (39%)
  • Unable to keep up with younger generations (39%)
  • Perceived as not having enough technical knowledge and familiarity with relevant technology (35%) 

The glib comment to older people that they are overqualified for a role does not pass any real scrutiny and should never be used. 

In the Government’s Better Later Life strategy, two of the clear objectives are, “Older workers are treated fairly, recognised for contributing expertise and skills, and have access to training and upskilling” and “As people age, they can work if they wish or need to”. 

So what can employers do to meet this objective but also the business imperative of catering for an older workforce to address labour shortages? The New Zealand Work Research Institute report Understanding the needs of New Zealand’s Ageing Workforce, while published in 2015, provides significant insights. 

The report identified organisational factors that support ongoing employment of mature age workers (deemed to be 55+). Flexibility in terms of reduced hours and extended leave were seen as key factors while less importance was attached to stability, benefits and training and development. Part-time work as an alternative to retirement offers individuals the chance to benefit from being in employment while allowing organisations to retain skills. 

Being conscious of bias and ageism is also an important consideration around how we deal with older employees. Ageism can present itself as a reduction in professional development opportunities, expecting people to retire when they reach 65 (or making them feel they should), reducing salary increases relative to others, not recognising their contribution and making ageist related comments such as “you are slowing down”.   

While we are focused on employers, older workers also have their part to play. As with anyone in the workforce, being flexible, having a willingness to learn, being open to ideas and trying to keep up with technology remain important irrespective of age. 

The Great Unretirement has already started. With no end in sight for workforce shortages, and with demographic trends in front of us, it is a commercial imperative for employers to embrace the “multigenerational” workforce. 

Click the button below to Read Baker Tilly International’s recent article “The Great Unretirement”.   

– Call one of our HR experts if you’d like specialised human resources advice or to discuss how you can make your workplace a place where older workers thrive and feel welcomed.   

DISCLAIMER No liability is assumed by Baker Tilly Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this website. It is recommended that you consult your advisor before acting on this information.

Find an HR specialist

Sign up to our newsletter

Thanks for signing up!

Our website uses cookies to help understand and improve your experience. Please let us know if that’s okay by you.

Cookies help us understand how you use our website, so we can serve up the right information here and in our other marketing.