Firms may feel big squeeze as workforce ages

A review of the 1991-2006 Census returns by researchers at the Equal Employment Opportunities Trust is predicting a future of skill and people shortages that could cause some firms severe pressure when it comes to recruiting trained staff.

Looking at more than 37 different careers, the EEO Trust's Workplace Age and Gender: Trends and Implications raises awareness of ongoing and developing demographic issues that will affect employers in New Zealand.

It is not just that the workforce is getting older but there is a chasm in some industries between the young and old that could cause severe recruitment difficulties down the track. Overcoming this will take a mind-shift among employers and the recruitment industry.

The report's key point is that some industries and professions will suffer from increasing skill shortages as men retire and young women take themselves out of the workforce in their 30s, leaving some professions - such as law, medicine, veterinary medicine and planning - short of enough qualified people to do the work.

EEO Trust chief executive Dr Philippa Reed says the organisation's 68-page report shows that people in most occupations are ageing, with mature workers in public transport, education, nursing, midwifery, social work and some trades.

"Our analysis shows that a number of professions, such as law and medicine, have workforces dominated by older men and younger women," said Reed. "Employers who have an ageing workforce may be facing the likelihood of large numbers of older people retiring or wanting reduced hours, and some of the young women leaving the workforce or moving to part-time hours at the same time."

In short, the report warns employers they need to be prepared to take on older workers and that staff should be hired based on their skills and experience - rather than how young they are.

The report shows that, on average, today's lawyers are younger than they were in 1991 and there are proportionally more women than men working in the profession.

According to the report, 24 per cent of lawyers were women in 1991. By 2006 they totalled 42 per cent. In 1991, male lawyers tended to be in their early 40s, but by 2006 the largest proportion of male lawyers were aged over 50.

"This indicates an ageing group of male lawyers and more young women than men joining the profession," said Reed.

She said employers would increasingly have to focus on performance to ensure workers have the skills, knowledge - and motivation - for the job, and ensure performance management systems were flexible to cater for a diverse range of staff. In other words, don't expect a 60-year-old to perform in the same way as a fresh-faced 20-something.

The report also says that women are more likely to become doctors than they were 15 years ago. In 1991 just 27 per cent of New Zealand's doctors were women, rising to 40 per cent in 2006. It points out that, like women lawyers, women doctors appear to leave the profession in their late 20s and early 30s, but return to work in their late 30s and early 40s.

Reed said businesses employing a combination of ageing men and young women faced the twin challenge of retaining women once they had children and finding more flexible options for older men who might want to reduce their hours.

"This can be done through flexible working options such as working from home, part-time work and flexible start and finishing times," she said. "These types of options are not just for women. They support anyone with caring responsibilities, including the increasing numbers of fathers who want to be more involved in childcare.

"They also support older people as they move towards retirement, and may help keep these people in the workforce for longer."

And with firms getting the heads up on employment trends in New Zealand, companies should start planning now to ensure they can close not only the skills gap - but the people gap too.

"These are fields where companies should be particularly aware of succession planning and skill-loss issues with potential mass retirement in years to come," said Reed.

And it is not just an issue for New Zealand. EEO Trust researcher Dr Mervyl McPherson said ageing workforces in occupations such as law, accounting and medicine were occurring throughout the Western World. And she said that while changing our immigration rules was part of the answer, recruitment practices had to change as well.

"Immigration policy is constantly being debated and modified to improve the way it meets the needs of the economy," she said. "But it is not just a matter of encouraging people to move here. It is how we treat them once they are here - are our recruitment processes truly non-discriminatory? Research and statistics suggest they are not.

"And once they have a job, are our workplace cultures truly inclusive and of a nature that enables organisations to truly tap into the skills, experience and potential that immigrants bring?"

Another scenario is that as people disappear from the job market, so wages get pushed up as firms with money to spare pay more to recruit and retain the people they need. However, McPherson said money was rarely the whole answer when attracting staff.

"Work-life balance and flexibility and equal employment opportunities for a diverse workforce all help attract quality people," she said.

And while attitudes may have to change so firms will think little of employing older people, Reed said companies that relied on hiring younger people would also need to take stock.

"Those who traditionally tend to employ younger people are facing a declining number of young people entering the workforce," she said.

Firms may soon have to be satisfied with the best people they can get as ideal candidates become rarer.

Contact Steve Hart via his website at www.SteveHart.co.nz