OECD: Australia Needs To Look After Its Aged Workers Better

Published September 03, 2019 (last updated July 22, 2020) -

The Organisation for Economic Co-operation and Development has released a report saying Australian workers would have longer working lives – if businesses developed more positive attitudes to older workers.

By 2050, the OECD warns, if no positive steps are taken there may be as many old people out of the workforce as there are participating in it.

In the report, titled Working Better With Age, the OECD notes that “27% of Australian employees aged 49 and above reported having actually experienced age discrimination in the workplace”.

This is despite finding that 11% of managers in Australia take account of age when offering staff training opportunities.

“The fact that people are living longer and in better health is an achievement to be celebrated,” OECD director of employment, labour and social affairs Stefano Scarpetta said.

“But rapid population ageing will require concerted policy action to promote active ageing so as to offset its potentially serious consequences for living standards and public finances.”

According to the report, the age at which older people exit the workforce is lower today that it was 30 years ago.

“This is explained by a combination of poor incentives to continue working at an older age, employer reluctance to hire and retain older workers, and underinvestment in employability throughout working lives,” the report says.

“Further measures are required in many countries to ensure that work at an older age is encouraged and not penalised.

“Employment regulations as well as seniority wages should be reviewed and reformed where necessary so as to boost labour demand for older workers and discourage the use of precarious forms of employment after a certain age.”

With the digital revolution continuing apace, the OECD further recommends upskilling older employees in the use of digital technology.

“One key factor preventing older workers from closing the skill gap with younger employees lies in the fact that the employers usually do not see the benefits of investing in the training of their older employees,” Scarpetta says.

“Providing good opportunities for workers to upgrade their skills and learn new ones throughout their working careers is a key requirement for fostering longer working lives in good quality jobs,” he says.

Pertinently, the OECD makes three key recommendations to governments to ensure longer working lives:

  • Reward work at an older age by: i) ensuring that the old-age pension system encourages and rewards later retirement in line with increased life expectancy, and providing more flexibility in work-retirement transitions; ii) restricting the use of publicly funded early-retirement schemes and discouraging mandatory retirement by employers; and iii) ensuring welfare benefits are used to provide income support for those unable to work or actively seeking work and not as de facto early-retirement schemes.
  • Encourage employers to retain and hire older workers by: i) addressing age discrimination in recruitment, promotion and retention; ii) seeking a better match between the labour costs and productivity of older workers by working with the social partners to review pay-setting practices and eliminating special employment protection rules based on age; and iii) encouraging good practice by employers in managing an age-diverse workforce.
  • Promote the employability of workers throughout their working lives by: i) improving access to lifelong learning and skills recognition; ii) improving working conditions and job quality at all ages; and iii) providing effective employment assistance for older workers facing job loss or wishing to find another job.

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