Demographic Change: Implications for Employers

Over recent years, issues associated with the ageing of the Australian workforce and declining population growth rates have received considerable attention. The potential implications of these trends - a drop in the growth of the working population, declining productivity and economic growth, a drop in taxation revenue and an increase in social costs - are cause for significant concern for employers and industry.

About the Ageing Population and Changing Labour Force

Over the next four decades in Australia, the number of people aged over 65 will almost double. Within just seven years, about 85% of labour market growth will come from people over the age of 45.

Fertility rates in Australia and Queensland have declined over the past 30 years. In the 1960’s the fertility rate was 3.443 children per woman of fertile age. In 2002 the rate had dropped to 1.76, and is predicted to drop to 1.6 by 2011.

Our aging population is a reality

As at 2001, nearly one third of all workers on all occupations were aged 45+. Some industries or occupations already reflect the aging workforce, with the average age of employees 50+. Furthermore, the proportion of Australia’s population aged over 65 will almost double over the next 40 years – from 13 percent in 2003-04 to 24.5 percent in 2044-45

Implications

While the full effects of the aging population will not be felt for several decades, there are serious implications for business and industry that choose to be complacent.

There will be greater competition in the workforce for younger people as growth in the ‘prime age’ workforce (26 to 40 years) continues to slow

Businesses with a high proportion of mature age workers may experience a significant loss of people and corporate knowledge as employees reach retirement age. This may leave businesses with large numbers of younger people without the corporate knowledge or experience to provide a broad overview of the organisation, affecting performance and competitiveness.

Failure to increase participation and make best possible use of the available labour force will make it more difficult to address the skills shortage. This will result in a slowing of economic growth for both Australia and businesses.

There will be a dramatic increase in the financial burden on those who are working because of increased government spending on retirement benefits, health and aged care associated with the aging population.