International

Journal of Australia’s ageing population:

Manpower
16,5/6
implications for human
resource management
34
Margaret Patrickson and Linley Hartmann
International Graduate School of Management, University of South
Australia, Adelaide, Australia

In common with other Organization for European Co-operation and

Development (OECD) countries, Australia’s population is ageing. The average
age is projected to increase to 32.5 years in 1991 and 35.7 years in 2001 (Foot and
Venne, 1991). In Europe, the World Health Organization (WHO, 1993) concluded
that the average population age could reach 60 by 2050.
Yet OECD forecasters (OECD, 1994) are suggesting the Australian economy is
set for expansion by the year 2000. Given that potential young recruits are not
available in sufficient numbers in consequence of the falling birth rates of the
1960s and 1970s, a high proportion of future staff increases will need to be met
from the expanding pool of older people. Australian Bureau of Statistics (1992)
projections indicate a gradual slowdown in workforce growth rates and the
following changes in labour force composition:
● the percentage of workers in the 55 to 64 years age group to increase
from 7.6 per cent in 1990 to 9.1 per cent in 2005;
● percentage gains in workforce numbers for the 45-54 year age group of
between 30 per cent and 50 per cent;
● a shift in the male/female composition of the labour force from 59:41 per
cent in 1990 to 54:46 per cent by 2005.
Based on these forecasts, changes will be necessary in the focus of present
human resource management activities to counteract tendencies to downgrade
and discourage older workers. This article considers some of the implications of
ageing in Australian for human resource practice.

Implications for Australian human resource practice

International Journal of Manpower,
Vol. 16 No. 5/6, 1995, pp. 34-46.
© MCB University Press,
0143-7720
Changes can be anticipated in workforce planning, recruitment, selection,
training, remuneration, performance measurement, career development,
disengagement, occupational health and safety, and equal opportunity. Older
workers in Europe have been offered alternatives to full-time employment
(Fevre, 1991) and in the USA specialized skill programmes exist for older staff
(Hale, 1990). Such policies ensure that older workers are accorded value. There
are few Australian examples. This article pinpoints areas for re-evaluation and
modification which will incorporate the projected ageing of the workforce.
 The older worker in Australia has been disadvantaged in the labour market, Australia’s
finding it more difficult to gain employment, and access to training and ageing
promotion, than comparatively younger people. This is due largely to the population
dramatic restructuring of the labour force in terms of age, gender, hours of work
and degree of casualization which occurred during the 1980s. In the USA Cascio
(1993) reported that more than 85 per cent of Fortune 1000 companies
downsized their white collar labour force between 1987 and 1992 resulting in 35
the loss of 5 million jobs. Similar scenarios are reported in the UK (Laczko and
Phillipson, 1991) and in the Australian press. The majority of workforce
redundancies were older workers.
Restructuring has highlighted the vulnerability of the over 50s and helped
validate negative stereotypes concerning their competence. For example, a
survey of attitudes to older workers in the USA (Rosen, 1978) found them
perceived as more resistant to change, less motivated to keep up with new
technology, less creative and less capable of handling stressful situations. More
recently, in Britain a survey of managers (Taylor and Walker, 1993) found that
little had changed. Older workers were perceived as less enthusiastic, less
creative, less motivated and more resistant to change. Similar beliefs are ex-
pressed by Australian employers in a Queensland survey conducted by
Steinberg et al. (1994), who found older workers, though valued for their loyalty
and their comparatively rarer absences, were nonetheless considered to be less
hard working, less ambitious, less healthy, less mentally alert, and less creative
than younger workers. Devito’s work (1995) indicated that negative stereotypes
were more strongly held by larger employers than smaller employers, and more
prevalent where fewer older workers were employed. Many employers in both
Europe and Australia accepted these stereotypes and, faced with the
inevitability of retrenchments, found it easier to detach their older workers.
Their actions were aided by widely-held perceptions that older people with
greater access to superannuation entitlements would face less economic
hardship in the event of employment loss.
The work skills of many of these individuals were acquired and honed in the
1950s, 1960s and 1970s, and judged less relevant for the high technology,
service oriented, information rich work culture of the 1990s. It remains to be
determined whether those whose work skills were acquired in the 1970s, 1980s
and 1990s are better suited to the twenty-first century.

Capacity of older workers

Waldman and Avolio (1986) concluded that perceptual judgements which link
work incapacity with age are difficult to verify empirically given the variable
nature of living standards across samples. The WHO investigation (1993)
indicated that physical deterioration was as much a product of life style as of
ageing, and could be reversed by appropriate life style changes. Age related
difficulties were reported in the acquisition, storage and retrieval of information
and in the performance of short-term memory. Similar findings were confirmed
by Charness (1985) and Denney and Palmer (1981), whose work is examined in
International Warr’s comprehensive research summary (Warr, 1993). The WHO report
Journal of concluded that job performance deteriorates with age mainly in situations
Manpower “which place heavy demands on mental functioning, such as sensory and
perceptual activities, selective attention, working memory and swift information
16,5/6 processing”. Nonetheless older workers have a similar productivity rate to young
individuals “in tasks requiring sustained attention and in tasks in which the older
36 workers are highly experienced” (WHO, 1993, pp. 14-5, emphasis added).
Warr’s (1993) research summary conceptualized four potential categories
linking age with work performance. In type A activities, largely verbal com-
prehension, which he labelled crystallized intelligence, performance improved
with age. In type B activities, which largely involve immediate memory, there
was no relationship between performance and age. In type C activities, complex
reasoning, there was no relationship between performance and age. Only in type
D activities, reaction time, working memory and fluid intelligence was there a
negative relationship between age and performance. Yet even here, decrements
in performance could be compensated for through specialized remedial training.
Warr suggested a high proportion of the additional learning time for older
people may be partly the result of having to spend more time unlearning their
previous information frameworks. Capacity in information analysis should
either remain steady throughout the normal work span until 65 years or at least
any deficiency in speed and accuracy could be counteracted by gains in ability
to work unsupervised or to work steadily. Staff whose work has a higher
physical or physiological component normally show less deterioration with age.
Both WHO and Warr agree that although the weight of evidence indicates
changes in physical, physiological, and psychomotor performance, these are
generally not sufficient to preclude performing physical type tasks efficiently,
and can be compensated through appropriate job redesign practices.

Workforce planning parameters

Though many Australian organizations are now significantly more strategic in
forecasting future staffing needs, it is predominantly the large employers such
as Telecom and the public sector who are addressing the issue of an ageing
population. Most others are still coming to terms with the consequences of
downsizing which occupied much of the late 1980s and the early 1990s.
Older employees made up the bulk of earlier redundancies but there is little
published on the incidence and value of separation packages, which were
offered to employees in the late 1980s or early 1990s, nor on those now available.
Informal communications from four or five large employers indicate a reduced
incidence of such separation packages and fewer likely in the future . The
general feeling seems that the widespread shedding of staff is reaching its end
and that Australia’s new lean workforce is gradually achieving comparative
world competitiveness. These sentiments remain to be confirmed in a broader
more representative sample.
Certainly awareness of the need for HR planning is more widespread than at
any former period (see e.g. Collins, 1994; Dunphy and Stace, 1990). HR staff
need to consider potential implications which unfolding organizational strategy Australia’s
may have for their staffing profile and to address issues of succession, ageing
recruitment, development and retirement, in relation to strategy objectives. An population
ageing workforce, for example, may require alternative policies to counteract
any potential demotivating effects from the reduced career opportunities
associated with the increasing proportion of older staff, adoption of alternative
policies for staged separation at retirement, possible provision of more part- 37
time employment opportunities and the development of policies to pass on
existing unacknowledged information located in the memories of long tenured
staff (Wood, 1989). More effort needs to be directed to the redesign of jobs to
improve their suitability for older workers by matching job demands to worker
skill and experience. Given the strong current focus on efficiency, quality and
value a significant need exists to discover the nature of the relationships
between skill levels, both tacit and explicit, the nature, length and type of
experience, and whether and how these contibute to competence in various job
categories and levels. Organizations whose dominant market is the younger age
group may need to consider ways to present their older staff as being relevant.
Though these issues are considered individually in the following paragraphs,
they are invariably intertwined and interrelated.

Recruiting
Harris (1991) reports how recession during the 1970s and 1980s contributed to
selection preferences in Britain favouring younger applicants. The Australian
experience has been similar and the difficulty faced by older staff wanting to
change jobs or, once they lose their job, to be re-employed is well documented.
ABS statistics in 1993 show an increasing length of time between jobs for each
succeeding age cohort – 27.6 weeks at age 15-19 years, rising to 106.2 weeks at
age 60-64 years. Though legislation now in place in most Australian states
prevents any reference to age, gender or associated characteristics for job
applicants, most present day recruiting practices are still biased towards the
younger person.
The research of Steinberg et al. (1994) indicated that many Australian em-
ployers are as reluctant to hire those over 45 years as employers in Europe.
Older workers are credited with possession of fewer key productivity related
skills than younger counterparts. Partly in response to this situation, the 1980s
experienced a growth in data banks of older staff seeking work, e.g. DOME
(Don’t Overlook Mature Expertise) in South Australia or similar organizations
interstate which assist older workers seeking to rejoin the workforce or retrain
into alternative occcupations. Since 1984 DOME has contacted over 18,500
employers in their efforts to assist members to secure employment and, as well
as offering skill training, provides encouragement in building up self-esteem
through sponsoring self-help discussion groups.
While it is possible that some older applicants may not possess the education,
skill levels, and adaptability needed in the 1990s, many others are the victims of
prejudice and negative stereotyping. Desperation resulting from a lack of com-
International petent younger people may be the driving force to counteract some of this
Journal of discrimination by potential employers. A constructive approach would be to
Manpower search actively for older staff in some job categories where their attributes are
better suited. Recruiters need to focus on the qualities which older staff have to
16,5/6 offer, and identify the jobs in which these qualities have potential for sustained
higher performance.
38 Warr’s (1993) work indicated that, given the increasingly cognitive content of
many jobs, older workers should maintain their competence, as long as
organizations continue to provide developmental opportunities which update
skill portfolios. Programmes aimed at assisting older workers re-enter the
workforce have largely been sponsored by government either as the direct
provider through DEET, or as the source of funding. There are no published
examples of organizational programmes in Australia.
Stereotypes against older workers are widely held and limit their access to
jobs. These vary between beliefs concerning outdated skills, low motivation,
ambition and enthusiasm, and beliefs of greater loyalty, less aggression and
more contentment with their present career (Johnson and Zimmermann, 1993).
Empirical evidence, about worker performance, by contrast, is generally
lacking and much needed. Anecdotal communication indicates that many
employers who have recruited older staff have been pleasantly surprised with
their dedication, their productivity and their reliability. To quote one employer:
I hired an older man because he was all I could find. It’s turned out to be the best thing I ever
did. He’s so keen, and he knows the business (listener comment, Life Matters, ABC Radio).

Yet, though some older applicants are successful in gaining re-employment, a

significant number, once unemployed, find themselves having to accept a lower
level of appointment than before.
The major impact of recently leglislated changes in selection procedures has
been to prohibit mentioning age in newspaper advertising rather than to
influence actual hiring decisions and discrimination continues against those
who are “too old at 55”. Increasing professionalism in selection procedures,
which has resulted in a greater number of vacancies carrying details of
essential performance criteria, makes it easier for applicants to address these
relevant skills in their application, and avoid any reference to their age.
However, older applicants still lose out following shortlisting, either because
they perform less well in speeded selection tests , or because their presentation
and appearance at interview raises negative stereotypes of “the older worker”
in the minds of selectors.
HR managers need to ensure that psychological tests which incorporate
potentially discriminatory bias through their emphasis on speed of
information processing and short-term memory, the type D activities
mentioned by Warr, be replaced by tests designed to measure relevant skills
and competences, and containing more examples of type A,B and C activities.
That older people perform less well on speeded measures of non-verbal
intelligence is well established (see, for example, Salthouse, 1990). Work
samples have always been more accurate predictors of subsequent Australia’s
performance (Heneman et al., 1986) and though this issue has been raised ageing
repetitively in the literature since 1983 (Dowling, 1988; Lansbury and Spillane, population
1983; Spillane, 1994) there has been little change in typical practice. Portfolios
and examples of recent former achievements may be more appropriate.
Interview procedures also warrant re-examination to counteract potential
bias. Older people are likely to be more experienced in an interview situation, 39
but this may not be recent, nor, in a situation where so much may be at stake.
A major issue is the “older” applicant’s appearance which may trigger
stereotypes against them. Selectors may need training in seeking out the
details of past achievements and evaluating performance independently of
age.

Training
An ageing workforce may also mean changes to ensure equity in access to
training. Many employers have applied subtle pressure to older staff to suggest
that they might find retraining too demanding (McFee, 1992). Steinberg et al.
(1994) found training was more frequently offered to younger employees and to
women, and that older employees did not volunteer in the same proportion as
their younger colleagues. This may be gradually changing and recent efforts in
NSW to assist older workers learn new skills through the Mature Workers
Programme have achieved high success (McFee, 1992). Communication from
Telecom staff, who operate one of the largest training centres, indicate that
older staff enrol in training programmes roughly in proportion to their
numbers in the Telecom workforce.
Contrary to popular stereotypes, many older staff have been as keen to learn
new skills as their younger colleagues, especially if the new skills are neces-
sary for maintaining their employment or improving their circumstances
(Knowles, 1984; Lahteenmaki and Paalumaki, 1993). However older staff may
not necessarily learn in the same way. Teaching methods need to be tailored to
their learning styles and incorporate techniques which permit additional time
without leading to feelings of inadequacy.
Warr (1993) comments that older workers may benefit from special in-
formation aids, extended familiarization activities with new equipment, the
building-in of early success experiences, and training in interconnected tasks
which help promote more effective learning. Above all, the older worker needs
encouragement from management that their efforts are appreciated and that
appropriate incentives will be offered for satisfactory completion.
It is disappointing that there is so little evidence that older people are
participating in organizationally sponsored training. Their numbers are
increasing dramatically in self-initiated learning such as The University of the
Third Age (TAFE)-sponsored retraining programmes, and community based
learning schemes which may not necessarily be related directly to
employment. So there is no reluctance to learn associated with ageing. Simply,
less opportunity to do so or fewer rewards associated with job based reskilling.
International Access to training is one means by which the organization communicates the
Journal of value it places on an older worker’s contribution. Those organizations which
Manpower encourage their older workers to participate should reap future dividends, not
only in the form of the increased skill levels, but equally importantly, in the
16,5/6 form of increased loyalties, and reduced turnover. Evidence from Tesco in the
UK (Kern, 1992) indicates the retention rate of older staff completing training
40 programmes exceeded that of younger staff by a significant margin.

Remuneration
Older workers in Australia have generally benefited from wages and salaries
which reflect their increased experience. Yet, unless increased age is ac-
companied by increased expertise, this simply makes them more expensive.
Restructuring of remuneration policies to replace age-related criteria with
measures of competence is overdue. Typical public sector practices, in which
years of service entitle job holders to regular annual increases, for example, are
gradually being replaced by broader banding of salary ranges and fewer levels
within each band (Selby-Smith, 1994). Similar changes are occurring in the
private sector (Cullen Egan Dell, 1991-1994) where “pay-for- performance”
philosophies, in which performance, either individual or collective, is the single
important determinant of pay, are becoming more common and filtering below
senior ranks.
Perceived entitlement to increased pay solely on the grounds of length of
service is a dying practice, unless the increased service is associated with
increased responsibility. Few HR managers appear to disagree with these
values. However, setting up an equitable alternative has been time consuming
and daunting.
Before performance-based pay can be introduced on a broader scale in highly
unionized industries, changes in award conditions need to be negotiated and
accepted as part of new enterprise agreements. This is happening slowly (see,
for example, the Australian Financial Review, 1995, p. 1) but there are large
sections of the workforce still untouched. Once the practice is more widespread,
it will be the job performance which is rewarded, not the job holder. Micro-
economic reforms, such as team-based incomes and multi-skilling initiatives,
are interacting with pay scales to eliminate or reduce any income benefits
associated with length of service.
Few nowadays would argue against the use of differential skill levels or
performance as more equitable criteria for compensation payments. Such
problems as do occur, are largely associated with the difficulties of measure-
ment. Some of the issues are considered in the next section.

Performance measurement
Performance measures can only be developed once those involved agree on the
essential components of what constitutes a “good” performance. Quantity,
quality, style, effort, have all been used but lack of sophistication in measure-
ment often confused productivity measures with attitude measures. The
emphasis is switching to depth and breadth of knowledge, reliability, quality Australia’s
and innovation, the ability to work in teams and to develop and nurture sound ageing
interpersonal relationships as the key indicators of “good” performance, population
factors in which age is likely to be an independent variable (Charness, 1985;
Salthouse, 1990), and where compensation for deficiencies can be undertaken.
Age may, therefore, not have the same effect on performance levels in the
future. 41
Measurement still relies heavily on supervisor judgement, yet a sizeable
proportion of organizations (16-17.5 per cent) in the Nankervis and Penrose
(1990) survey reported concerns and distrust of their scheme. Measures of
competence which are relatively independent of the assessor should benefit
older staff as they focus on performance and not on personal attributes.
If the measurement process in place is valued, and accompanied by a fair
and frank exchange of views between supervisor and worker, then it provides
an ideal opportunity for older staff and their supervisors to open up
discussions concerning the future. Alternatives can be canvassed and
explored. Without reciprocal trust the process runs the risk of being
interpreted as intimidation. If the organization is known to encourage options
and to view older workers empathically, there is a strong possibility that
appraisals will emerge as the vehicle whereby older workers can table their
ambitions and concerns. However, recent recession and widescale downsizing
have resulted in few older staff approaching performance appraisal without
stress, believing that the interview may be used to pressure them into
accepting a form of “ voluntary” early retirement.

Career development
Career development by its very nature of integrating present job occupancy
into a future developmental path will have quite different meanings for
younger and older staff. The young are far more interested in where a job
might lead, especially in the longer term. The more mature have a shorter time
horizon simply because they have fewer years ahead and may have fewer
promotions or job changes in front of them. Older staff may be vitally
concerned with how any career move may affect the manner and terms of
potential retirement.
Career plateauing may arise as a problem should larger numbers of older
workers create potential bottlenecks within promotion ranks and slow down
promotion velocity. Strategies to counteract potential disenchantment include
policies which encourage higher value on horizontal career development (Hall,
1985) and programmes which reward non-promotional type achievements.
Recent practices such as downshifting (Sundstrom, 1992) or project work
assignments (Hall, 1985) in the USA may have application in Australia.
More effort needs to be directed to programmes which utilize the experience
of older staff as mentors for their younger colleagues. Provision of emotional
support, sounding board roles, or even simply listening may be very
International constructive in terms of developing teamwork, and reduce the time taken up by
Journal of senior management.
Manpower
Occupational health and safety
16,5/6 European statistics (WHO, 1993) indicate mixed outcomes linking safety with
age. Accident rates for younger staff are comparatively high, largely associated
42 with their relative inexperience. High accident rates for older workers, are often
the consequence of higher risk assignments. When risk was partialled out of the
analysis, the higher accident rates of older workers disappeared. However, older
workers often took longer to recover from similar accidents than their younger
colleagues. Ageing was also associated with increased vulnerability to
problems associated with poor sight and poor hearing and the risk of falling.
Reported Australian statistics (Work Cover Authority of NSW, 1994) indicate
the highest accident percentages occurring in the age group 25-29 years or
males (13.1 per cent) and 40-44 years for females (14.8 per cent). However, time
lost for disability, measured in weeks, rose with age for each succeeding cohort
until 64 years. No Australian statistics are readily available which compare the
type of claim with age. The majority of work related accidents occur in
manufacturing and construction, though many longer term and, therefore, more
expensive claims chiefly relating to stress injuries are from people working in
clerical and administrative areas, where the extent of any rehabilitation period
may be influenced by non-medical factors. There may be an apparent economic
advantage for older workers in prolonging the rehabilitation process until an
early retirement option becomes accessible.

International HR
Unlike Australia, where age is often evaluated negatively, our major trading
partners – Japan, China, Korea and other Asian nations – venerate age as
connoting wisdom and demanding respect. Consequently ageing alone is
unlikely to be a handicap in international negotiations. Attempts to locate
personal factors which contribute to success in international assignments
(Barham and Devine, 1990; Black et al., 1991) have suggested adaptability,
sensitivity, and interpersonal skills as being important. These are personality
variables likely to be independent of ageing and may even improve with ageing
as they are associated with the accumulation of experience (Harris and Moran,
1991). Mammon (1995) comments on how the connection between age and
status so often found in Asian society may generate respect for older people.
The issue of ageing and looking older is a problem which has not yet been
investigated in international HR. One might anticipate mixed results
depending on the value placed on age in other cultures, and the typical practice
of the overseas country regarding their own older workers.

Gender differences among older workers

Much of the increased participation of older people in the workforce will
involve older women, who, even though their numbers are increasing, are still
underrepresented in the workforce. Many work part-time in service industries. Australia’s
Compared with men, strong gender differences exist in their financial circum- ageing
stances, their superannuation entitlement in the event of retirement, and their population
reasons for wanting to work (Patrickson and Hartmann, 1994). Men and
women have not participated on equal terms in the Australian labour market,
and the majority of women will approach their retirement in comparatively
less attractive financial circumstances to men and gain more financially by 43
remaining at work. This should contribute to higher participation rates for
women and HR staff will need to ensure policies are developed which recognize
the higher numbers of older women, harness their motivation and utilize their
talent.

Effective management of older staff

Australian managers have been relatively slow to recognize the implications of
demographics and though there is increasing awareness of the need for a more
strategic approach to broader human resource management, a gap still exists
between recognition of need and widespread translation of this need into
practice (Kramar, 1994; Storey and Sisson, 1993). An ageing workforce raises
the need to re-address many of Australia’s typical human resource practices to
ensure that the implications of population ageing are aligned with the
demands of organizational strategy. Succession plans which prepare for staff
losses, and programmes which continually update skills in line with new
organizational directions and are delivered using appropriate learning
methodologies, are urgently needed. Exploration of reduced participation
options such as jobs involving reduced pressure but without implications for
income reduction, or part-time employment possibilities, should also be
considered.

Conclusion
It appears that within the next ten to 15 years HR staff will need to confront the
changes which an ageing workforce will have on their industry. Nor are they
themselves immune. Perhaps their views may be tempered to some extent by
the ageing they perceive within their own ranks. Pressures to eliminate
negative bias against recruitment of older people, to provide them with
training opportunites befitting their learning styles, and to ensure that
performance measures reflect actual competence and not prejudicial
judgements, will increase as the ranks of the over 50s increase and their
political voice becomes louder. More HR professsionals are needed to act as
champions for their older workers and ensure that equity is a reality as well as
an ideal for all workers. In the past they have been all too ready to follow the
trend of championing the young and the ambitious, and valuing more highly
those who are radically innovative. This is a plea to temper this approach and
to acknowledge that excellence can take many forms. Older workers are as able
to craft and fashion new strategies, to manage ongoing operations and to bring
initiative and enthusiasm to their role as are younger ones. Furthermore their
International lesser investment in their career future may result in their having less personal
Journal of and more corporate stake in organizational achievements. Work attitudes,
Manpower though they may change with age and experience, are as much a product of the
organizational environment as of the individual. It is up to HR staff to ensure
16,5/6 that the appropriate environment is provided to ensure their talent does not
wither.
44
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