Older Workers Vital for Economy 

The Dominion Post 

October 6, 2008

New Zealand

In February after five decades of punching the proverbial clock, Eric Rule left the working world behind him and took up the business of retirement.

Six months later, the 70-year-old was back at it, greeting and seating customers at Denny's diner in Christchurch.

"It was the best decision I ever made," says an enthusiastic Mr Rule.

At the time, the spritely senior's re-entry into the workforce was seen as such a rarity, he made headlines. But if workplace forecasts are accurate, seniors the likes of Mr Rule will soon become commonplace.

For one, people are living longer and they need the money to sustain them in old age. In the last 20 years, average life expectancy for men has jumped seven years to 78. For women it is 82, a five-year increase.

But as much as seniors will need the money, the economy will want for their participation.

Equal Employment Opportunities Commissioner Judy McGregor says a sudden exodus of baby boomers from the workforce would be disastrous.
"Simply put, we're going to need more older workers to stay at work if New Zealand wants to retain its standard of living and gdp."

On top of a chronic low productivity problem and a labour shortage, Dr McGregor says the national economy is challenged by a declining birth rate and insufficient migration.

To compensate for the confluence of negative forces, Dr McGregor says retirement-age workers are poised to take a more prominent role in the workforce.
Half of the country's workforce is aged over 40, with a quarter between 50 and 64. The number of workers aged 65 and over is set to explode. Two years ago, 65,000 people aged 65 and older were working. By 2011, that is expected to soar to 105,000 and by 2021, 160,000.

Dr McGregor says employers need to plan for the future, even amid the current economic downturn.

This month, her office, in conjunction with several other departments, published for employers a 47-page how-to guide: Valuing Experience: a practical guide to recruiting and retaining older workers.

She says it was driven partly out of demand from employers but also from a recognised need that older workers needed a stronger voice.

"If you stay in a job, you're fine, because changes to law mean you can't be forcibly retired, but if you involuntarily lose your job, particularly middle-age men about 55 in professional circumstances, you find it very hard to get back in at the level you exited."

Though many might look at a permanent break from work at age 55 as desirable, Dr McGregor says more people are choosing to stay at work till retirement age and beyond for a variety or reasons, not just money.

"Life expectancy is a lot longer, so people want more money to last them, but they also want to stay socially and intellectually stimulated."

Industries heavily populated by older workers, for example shipping and power companies, are starting to pay heed.

Genesis Energy is one of them.

Public affairs manager Richard Gordon says Genesis has adopted a two-pronged approach to guard against a potential brain drain.

On one hand, it has introduced policies and practices to phase in retirement for ageing workers. On the other, it has ramped up recruitment efforts to find more youthful replacements. "A lot of our operational staff who are running our stations, well they are no spring chickens. They're ageing and we've had to address this issue quite proactively in the last few years."

In the next decade, 20 per cent of Genesis's workforce at Huntly power station is expected to reach retirement age. Mr Gordon says the company is fearful of losing vast powerhouses of talent.

"The challenge for us is transitioning them out of the workforce so they can retire, but not all walk out the door with as much skills, information and knowledge."

In some cases, that has meant allowing older workers to scale back hours. In others, workers have been asked to come out of retirement.

Last year, John Kerr, Genesis's longest-serving employee with 45 years of service under his belt, converted to a four-day work week when he turned 65.
Mr Kerr, now 66, says the arrangement was negotiated after a talk with a human resource specialist who highlighted flexible work arrangements as an alternative to retirement.

"It was like music to my ears," says Mr Kerr, a contract specialist at Genesis's Huntly power station.

"I didn't like the idea of when I suddenly got to age 65 of saying bye-bye folks, I'm out of here . . . and my new situation couldn't be any better."

Mr Kerr says companies that are willing to provide older workers with greater flexibility are more likely to find the people want to give something back in return.

"Let's face it, people, if they start working fewer hours as they start enjoying semi-retirement, they are more likely to be happy to impart their information to others."

People who are locked into a five-day work situation often feel a bit threatened that if they tell somebody too much, they'll know as much as they do and therefore they might not be as required. But if you're moving toward retirement, they might not feel as threatened." In fact, older workers surveyed last year by the Equal Employment Office rated flexibility as a top consideration in wanting to stay on the job or return to work.

Other factors were the ability to take extended leave and return to the job, working from home, higher pay, challenging, interesting and varied work, the chance to make a difference, being valued, and having less stress.

For Mr Rule, who works 20 hours a week at Denny's, it was the opportunity to socialise again and earn a bit of spare cash that brought him out of retirement.

"I'd spent most of my life working with people, and I don't play bowls or golf, so I didn't have a connection there, so it was boredom and loneliness mostly," he says.

Despite being three times older than some of his colleagues, Mr Rule believes he has made a valuable contribution.

"I think as you get older, you're more awake to things. I'm looking around all the time for little things to be done. The younger ones, they don't have that same facility. They usually just concentrate on their own job. But the older person is always looking around for extra things. That's what I think a lot of older people would be good at."

Despite the maturity, experience and know-how older workers can bring to a job, Dr McGregor says they still face widespread discrimination.

She uses technology as an example, and says older workers tend to be excluded from professional development opportunities, like IT training, though it has become a vital skill in today's workplace.

"Very few employers have cottoned on to keeping their older workers up to date. They need to ensure that training and employment opportunities are not age biased. I think it's a serious issue for New Zealand given our productivity issues and nature of work."

As Mr Rule sees it, information exchange is a two-way street.

"It doesn't matter how old you are, you can always learn something new. It may be hard to hear from a 25-year-old but you need to be open to that."
Neville Young, a manager at Denny's in Christchurch, says it is that kind of open-mindedness that makes older workers attractive to hire. At a national level, the diner has a policy to encourage the hiring of older workers which is how Mr Rule came to work at Denny's. He responded to an ad encouraging seniors to apply.

"They bring a level of maturity and life experience that can't be matched by young workers," Mr Young says. "Plus, they're a lot more experienced in their jokes!"

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