The major economic implications include a smaller workforce and a shrinking federal income tax base, plus a massive brain drain as highly experienced workers exit the workplace, taking decades of knowledge with them.
All aspects of business will be affected by the aging workforce, says Karen Evans, Managing Director of talent management solutions experts, Acendre.
HR professionals and employers can help prepare their companies for the future by acknowledging the impending retirement of many Australian workers and making plans to mitigate against this brain drain, she says.
“Workforce planning is the absolute key to success when it comes to understanding how the business will be able to cope with any changes ahead,” Evans says.
“Taking stock of your available workforce, and planning what you’re going to need in the future will guide every step of the HR planning process,” she says.
Employers can start by taking an inventory of the current workforce status and its requirements for the future, Evans says.
That way, the business will gain a clearer picture of where there are gaps in skills, plus who will be leaving and taking knowledge out of the business with them.
“This information can drive decision-making around whether existing employees can be upskilled to fill those gaps, where the business needs to hire in from the outside, and so on,” Evans says.
HR professionals can use workplace planning and succession planning strategies to help combat the inevitable ‘brain drain’ that occurs whenever older generations leave the workforce.
“As this is set to increase exponentially over the coming years, the idea of workforce planning becomes an incredibly important task for HR professionals who want to stay ahead of this issue by implementing training initiatives to combat the exodus of talent and knowledge,” Evans says.
That’s why employers should be implementing strategies right now in a bid to capture some of that knowledge and experience and share it amongst the next generation of their workforce.
Having younger staff in mid-level management positions is key to business success, she says.
“Due to the impending retirement of many Australians, having younger employees in mid-level management is crucial to the success of any business, and is in some ways inevitable,” Evans says.
“As one part of the workforce heads towards retirement and a younger generation begins to take its place, it is crucial that this new cohort of inexperienced managers have access to management training to make sure that they are well equipped to face the difficult task of managing people.”
Organisations should implement strong succession planning strategies to develop and engage their employees in their careers, Evans says.
“Ensuring staff have a goal roadmap to keep them engaged in their progress will not only benefit staff, but the organisation’s success also,” she says.
The Australian Bureau of Statistics predicts that the number of people aged 65 years and over will jump from current levels of 3.5 million to around 5.8 million by 2031, while 44% of federal government workers will be eligible for retirement in the next decade.
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It’s no secret that Australia’s aging population will soon see the country in the midst of a crisis as the Baby Boomer generation exit the workforce