Goal 9 of The Positive Ageing Strategy

As New Zealand’s demand for skilled labour rises, older people will become an increasingly important and valuable part of our workforce.

This ageing workforce will increasingly require employers to focus on retaining experienced and skilled employees (to ensure productivity) while mentoring younger ones.

Details below about this goal are taken from the 2014 report on the Positive Ageing Strategy, published in April 2015.  Your feedback will help inform the next comprehensive update due to be carried out in 2017.

More information and references are available by downloading a full copy of the report.

Employment Opportunities: key achievements

• Providing research on older people’s employment rates and what they mean for New Zealand.

What’s happening?

Older people are staying in the workforce

The removal of the retirement age in 1999 and the availability of universal superannuation have seen an increasing number of people continue to work after they turn 65. Currently 22 percent of people aged 65-plus are in some form of paid employment, comprising just over 5 percent of the total labour force. This is projected to grow to 30 percent by 2036, 13 percent of the total labour force.

Many businesses will need to hold on to older workers

The combination of an ageing population and an ageing workforce means that growth in ‘working-age’ people (those aged 15–64 years) will be slow – so many businesses will need to employ older people in order to grow. In the next 40 years older workers will have a key role in raising New Zealand’s productivity and economic growth.

Older people will earn more through working – and pay more income tax

Between now and the 2050s, the increasing number of older New Zealanders still working will lead to higher earnings and more income tax being paid. It’s projected that by 2051 older people will:

• earn about $18.18 billion per year, up from $2.80 billion in 2011
• pay about $2.46 billion in tax on wages and salaries, compared with $380 million in 2011.36

Older New Zealanders also contribute through voluntary work

Older people already contribute a lot to New Zealand through unpaid and voluntary work. In 2011 their contribution was estimated at $8 billion; this is projected to rise to $35 billion by 2051.

Many older people also support others to participate in paid work, for example by caring for grandchildren.

Many industries already have older workforces

Many industries already have ageing workforces owing to the first wave of the baby boom generation turning 65, and this trend is likely to continue. The industries with the oldest populations are:

• agriculture, forestry and fishing: 12 percent of workers are aged 65-plus, 19 percent are aged 55–64
• transport and storage: 8 percent are aged 65-plus, 20 percent are aged 55–64

• health and community services: 6.4 percent are aged 65-plus, 22 percent are aged 55–64.

The impact of technology on jobs

Technology is changing the nature of jobs and the skills that businesses are demanding. Similar to international trends, there is a decline in some low and mid skilled jobs, some of which has been brought on by technological change. In order for older workers to maintain the skills that businesses demand, consideration may need to be given to ensuring businesses are continuing to up-skill their employees to keep pace with the changing nature of work and skills that businesses are demanding.

Flexible work for older workers

Under the Employment Relations Act 2000, employees have a right to request a variation to their working arrangements. Previously this was just for employees who care for another person but as of the March 2015 this has been extended to all employees. The changes to flexible working arrangements aim to improve people’s participation in the labour market and to better reflect modern lifestyles, including older workers who may want to begin the transition to retirement and reduce or change the hours of work, days of work, or place of work (such as working from home).

ACC for older workers

As working people reaching the qualifying age for NZS, their entitlements to ACC weekly compensation for lost earnings change. However, their entitlements to other ACC services (such as rehabilitation support) are unaffected.

Examples of services, programmes and research

OSC – Investigating the ageing workforce

OSC is developing a programme that looks at how the New Zealand workforce is ageing and the information that employers may need to adapt to the changing workforce.

Research – Employers’ and employees’ attitudes towards the ageing workforce40

In 2014 OSC and the Human Rights Commission (under the Equal Employment Opportunities Commissioner) surveyed employees and managers at Crown research institutes and DHBs (Crown entities) on their attitudes towards an ageing workforce. This followed a similar survey of private sector businesses in 2013.

In combination, the two surveys found that:

• financial necessity was key reason for older people continuing to work (for 72 percent of those in the Crown entities survey and 67 percent in the private sector survey)
• 50 percent of older employees weren’t confident that they had enough savings to carry them through retirement, and 60 percent said they wouldn’t have enough money if they were forced to retire
• older workers were still looking for challenging and rewarding careers
• while employers had some negative perceptions of older workers, they were viewed as overall more productive and better in a crisis, and better mentors, than their younger counterparts
• few organisations had structures in place to reap the rewards of older workers’ productivity and diversity
• at an individual level, 40 percent of older workers had experienced age-related discrimination in the previous five years.

Research – Older women in the workplace

The National Advisory Council for Employment of Women, administered by the Ministry of Women’s Affairs, recently commissioned a study of older women’s employment rates and types of work.

The study found that the proportion of 65-plus women in the workforce has increased from 2 percent 20 years ago to 15 percent today – and suggested that this number could top 30 percent in the next 20 years, bringing a significant boost to tax revenue and discretionary spending.

However, the report stated that older women in physical, low-paid jobs and without qualifications may struggle to find suitable work in the future.

Research – barriers to and enablers of paid work

Another recent University of Waikato research project (also funded by a grant from the Ministry of Business, Innovation and Employment) has focused on identifying practices and policies that either encourage or discourage participation in paid work among older people, especially those aged 65-plus.

The response from employers was variable, with some large employers and employers’ organisations taking longer-term views and many small and medium-sized businesses finding it harder to adapt. The study concluded that changes in the workplace will come about through economic drivers such as skill shortages and the ageing of the customer base.

Many respondents commented that government isn’t tackling the issue of workforce ageing effectively; they would like to see more information and guidance to help them manage an ageing workforce.

So how are we doing?

Just as New Zealand’s population is ageing, so too is our workforce – and older workers in both the private and public sectors will have an increasing role as productive and valuable employees who contribute to our nation’s prosperity.

Unfortunately however, there currently appears to be:

• a mismatch between this positive contribution and some negative – and unfounded – perceptions of older people in the workplace
• a high prevalence of age discrimination in the workplace 

Both of these developments can be harmful for both the individuals concerned and businesses’ productivity and prospects, and need to be addressed through proactive workforce planning.

What do you think?

1. How can employers and employees better understand the consequences of an ageing workforce, including the benefits of older people’s participation?
2. Are government agencies planning enough for an ageing workforce? If not, what are the barriers?
3. What can employers do to benefit from the experience of older workers?

If you would like to share with us your views on Goal 9, then please send us an email.