More and more employees are choosing to ‘unretire’. What it means for your business
Understanding what’s driving the ‘unretirement’ phenomenon is vital for businesses aiming to harness its potential.
In today’s evolving employment landscape, ‘unretirement’ is transforming the Australian workforce. Understanding what’s driving this phenomenon is vital for businesses aiming to harness its potential.
Unretirement describes the growing trend of older adults, including retirees or those nearing retirement, re-entering or choosing to remain active in the workforce. Cost of living pressures, amplified by the pandemic, are driving many older adults to unretire for reasons of economic necessity, in order to manage longevity risk. Other motivations include seeking structure, finding renewed purpose, and responding to changes in pension and superannuation policies. With the evolving job landscape offering more flexibility and a high demand for experienced talent, older workers are showcasing their immense value and adaptability.
The Association of Superannuation Funds of Australia (ASFA) points to the financial challenges faced by retirees. In 2023, a couple will need $690,000 for a “comfortable” retirement, covering home maintenance, occasional dining out, and annual holidays. Even for a more modest retirement, including basic private health insurance and minimal discretionary spending, a couple would still need $100,000. These figures emphasise the practical necessity of unretiring for many older people.
Australian Bureau of Statistics data from 2018-19 and 2020-21 highlights the central role financial security plays in retirement choices with 53% of older Australians concerned about outliving their savings. Among them, women (59%) are more concerned than men (47%). Historically, the gender pay gap and periods of career interruptions for caregiving have meant less lifetime earnings and superannuation for older Australian women. Women’s economic fortunes have also been influenced by their significant representation in lower-paying sectors – and a predisposition towards casual roles. While efforts are being made to address these issues, many older women in Australia still face financial challenges, meaning women will likely work for longer than men.
Transforming the workforce landscape
Data from National Seniors Australia indicates 40% of those who joined the labour force in the last three years were aged 55 and over. This figure marks a significant increase from only two decades ago when this age group accounted for only 11.4% of the workforce. Additionally, a detailed analysis by KPMG shows that the Australian workforce expanded by a staggering 491,000 between October 2019 and October 2022, with 38% of this growth attributed to the over-55 age group.
Notable too, is the ongoing skills shortage, with the nation’s job market continuing to experience a surge in job vacancy rates, with an 89.3% increase compared to February 2020, pre-pandemic. This continued worker demand across sectors presents a golden opportunity for older individuals re-entering or choosing to remain in the workforce beyond traditional retirement ages.
The benefits of employing older workers
Businesses that recognise and act on the unretirement trend can enjoy substantial benefits including:
Experience and expertise: Older workers have amassed years of industry knowledge and skills, offering a depth of experience that can help address Australia’s talent shortage.
Professional reliability: Older workers often display higher rates of punctuality, lower absenteeism, and a commitment to staying with their employer longer, reducing recruitment and training costs.
Reverse mentorship ppportunities: A multigenerational workforce fosters a culture of knowledge sharing and skills-building through reverse mentorship, enriching the business environment and driving innovation.
Diverse perspective: Having lived through various economic, social, and technological changes, older workers bring a broad perspective, enhancing problem-solving and decision-making.
Stability and loyalty: With fewer career shifts anticipated, older workers tend to provide stability, fostering consistent performance and commitment to their employer’s mission.
Creating age-inclusive workplaces
Addressing ageism and fostering age-inclusive workplaces is paramount for businesses in today’s diverse employment landscape. This approach not only respects the rights of all individuals, but also harnesses the potential that older workers bring to the table. By eliminating age-based biases, businesses can tap into a reservoir of experience, reliability, and varied perspectives, contributing to innovation, increased productivity, and the overall health of the corporate culture.
It’s imperative, then, to understand and cater to the preferences of older workers. Introducing flexible working arrangements, such as hybrid and part-time schedules, helps older employees find an optimal work-life balance. Such adaptability is particularly beneficial for those with eldercare and or grandchildren care responsibilities, ensuring they can contribute meaningfully while managing personal commitments.
Bunnings, a prominent Australian retailer, stands out for its commitment to a multigenerational workforce. The company adopts an inclusive recruitment strategy, avoids age-specific language in job listings, and welcomes walk-in applications, making it accessible for candidates across age groups. Additionally, Bunnings has introduced an innovative Retiring Well Program to aid employees transitioning to retirement. This initiative focuses on financial, emotional, and physical well-being, enabling older employees to gradually reduce their hours for a smooth transition.
The role of employers in facilitating ‘unretirement’
In a society where extending one’s working life is both an aspiration and a necessity, employers have a crucial role to play in making unretirement viable. Here are five key actions for employers to consider:
Address age discrimination in recruitment: Revise hiring protocols to eliminate age-based biases, allowing businesses to access a diverse talent pool of older workers. By promoting an age-inclusive recruitment strategy, companies can leverage the invaluable experience and reliability these workers offer, resulting in enhanced workplace diversity and productivity.
Introduce retention strategies: Devise measures that motivate older workers to extend their tenure with the company. Recognising their dedication, offering them mentorship roles, or providing avenues for continued career progression are essential components of these strategies.
Promote lifelong learning and reskilling: Facilitate training programs to ensure older workers are updated with industry trends and technological advances. This not only boosts their confidence but also enriches the company with their enhanced skill set.
Encourage open dialogues on retirement plans: Create an environment where older workers feel comfortable discussing their retirement intentions, enabling businesses to plan collaboratively and ensure a win-win situation for both the company and the employee.
Establish alumni connections: Alumni programs not only help retirees maintain social connections but also create a talent pool of experienced individuals who can potentially return to work part-time or as required for short contracts or projects. This contributes to a strong company culture, fosters mentorship, and bolsters recruitment efforts.
Retirement is no longer a one-time decision – it’s a journey with various pathways, including the option to unretire, once or multiple times. We can expect to see growth in both the number of people who choose to unretire and the number of industries that leverage this opportunity. To remain competitive and enjoy the benefits of experienced workers and help address Australia’s ongoing skills shortage, businesses need proactive strategies that help retain older workers or assist retired workers on their return-to-work journeys. The future belongs to organisations that embrace the era of unretirement and realise that age should never be a barrier to productivity, innovation, and success.
