It is a serendipity, I suppose, that the Diversity Council Australia released its Older Women Matter: Harnessing the talents of Australia’s older female workforce report today, the day after my 50th birthday. This has not been an easy birthday for me. My 30th and 40th did not affect me so acutely as this one has, and frankly I can’t wait till all the hoopla in my head is over and done with and I can move on.
A Terrible Waste of Human Capital
In the report, older female workers (defined as 45 years plus) represent a significant employment participation group of Australia’s workforce – 17% to be exact.
Relative to their male counterparts, older female workers have lower labour market participation rates, higher underutilisation rates and Australia’s performance in this regard lags substantially behind comparable countries.
With one of the highest life expectancies in the world, most people, particularly women, need to work for many more of these extended years to ensure their financial security.
As Australia ignores the huge pool of talent and experience represented by older women, it is not only a terrible waste of human capital, it undermines the national imperative of growing the economy which results in significant loss to businesses and it impacts the financial, emotional and physical wellbeing of the many women who are consigned to unwanted early retirement.
The Government responded to public interest in the challenges facing older workers by introducing legislation to extend the Fair Work Act 2009 ‘right to request’ flexibility provisions from parents of young children to any employees with caring responsibilities and mature aged workers 55+.
Women’s employment also continues to be a focus for government, as evidenced in the recent passage of the Workplace Gender Equality Act 2012 and the implementation of government-provided paid maternity leave and parental leave schemes.
The proven benefits organisations experience hiring older women include: sustained job performance, high motivation levels, high reliability, improved retention and accumulation of experience, knowledge and skills over working lives, reduced attrition, enhanced innovation, group performance, access to target markets and financial performance, and minimising legal and reputational risks.
- Market share – organisations that align workforce and customer demographics will better understand changing market needs and demand, and therefore customer service and product development. It is said that in customer service areas it is best to hire staff that are 7 years either side your target/ideal customers age. Given the massive actual spending and spending potential of baby boomers hiring older women for these roles just makes good business sense.
- Retention – Workers aged 55+ are five times less likely to change jobs than those aged 20-24, and organisations stand to gain an average net benefit of $1956 per mature-age employee per year, via lower attrition, absenteeism and recruitment costs.
- Innovation – Research examining 15 years of panel data of management teams of S&P 1500 firms, has found that more women in top management improved the performance of firms which were heavily focused on innovation.
Reliability – Research reviewed in the World Economic Forum’s report Global Population Ageing: Peril or Promise? suggests that mature age workers may be more reliable than younger workers, being less likely to engage in theft from their companies, be absent or quit their jobs. ABS surveys have found that a smaller percentage of women employees aged over 45 have days away from work, either because of their own illness or to care for others, than younger women.
- The Bottom Line – there is a large body of research showing a correlation between gender diversity in management ranks and improved organisational financial performance. One US study found that companies with the most women board directors outperformed those with the least on return on sales (ROS) by 16% and return on invested capital (ROIC) by 26%.
- Return on Investment (ROI) – ACCI guidelines highlight the better return on investment in human capital businesses can experience by retaining or recruiting the advantages’ of significant length of service, investment in training and wealth of accumulated experience. To illustrate in relation to ROI on training, research shows 45% of workers aged 45+ intend to remain in the workforce until the age of 65-69, representing a potential 20 year investment in training, while those aged 30-39 are likely to remain with an employer for an average of only 5.8 years.
- Productivity – Research shows workers aged 65+ have the highest productivity and motivation levels, and that workers aged 55+ perform at their best for seven hours out of eight per day (an achievement unmatched by workers in other age groups)
- Reputation – Research in the US has found that when a diversity complaint goes public, the company’s share price drops within 24 hours, and when an organisation wins a diversity-related award, its share price rises within 10 days.
Does all this positive data make me feel better about being 50? No, because one report does little to break down the fundamental societal attitudes that underlie age and gender discrimination. The fact that Australia has to legislate in order to force employers to recognise the realities of being older and give women a ‘fair go’ the workforce is a tragedy.