Retaining your mature employees can boost productivity, while helping them save enough for an adequate retirement.

Australians are increasingly working to older ages. Good health, shifts in government policy, demand for skills or even realising that they aren’t quite ready to retire has seen an increase in the number of mature workers working past the age of 65 years. To put this into context, in 2018, 13% of Australians aged 65 years and older were still actively employed, compared with just 8% in 2006. 

And this trend is not likely to change. In 2016 20% of Australians aged 45 years and over stated that they intended to work until age 70 - this is an increase of 12% from 2004. Australia’s population is predicted to reach 29 million in 2027 (consisting of 5.2 million aged 65 years and over), it is likely that this retirement intention increases further. Ageing workforces mean that we can now see four generations in the workforce at the same time.

For some employees, staying in gainful employment is a financial decision. Living longer and healthier lives means that retirement savings need to last longer. We often get asked ‘How much will I need in retirement?’, as there are many different views on retirement adequacy ranging from 45% - 65% of gross pre-retirement income. This depends on a number of socioeconomic factors including asset ownership outside of super, debt and spending habits.

Financial planning and advice services may help employees plan for retirement and ensure that their personal definition of adequacy is achieved.  Research has shown that good advice leads to better financial decision making and can improve retirement outcomes (CoreData (2018) ‘Value of Advice’ Research). 

How organisations can benefit from mature employees

Many organisations are experiencing ageing workforces first hand, however only 17% have considered the long-term impacts. Deloitte’s 2018 Global Human Capital Trends reports that 20% of respondents view mature employees as a competitive disadvantage and 15% as “an impediment to rising talent.” To the contrary, there are diverse benefits that retaining and attracting mature  employees have both to organisational culture and the bottom line.

This includes:
  • Engagement levels increase with age as mature employees have career experience and are likely to be in a role that suits their skills and preferences. Engaged employees are shown to perform better across a range of business metrics including 21% higher profitability, 40% higher quality, 10% stronger customer loyalty and 70% better in terms of safety.

  • Role modelling and mentoring younger workers on work disciplines like loyalty, positive and honest behaviour and complying with organisational rules and policies that help to maintain a positive work culture.

  • For some organisations there is an experienced labour shortage that increases as more mature employees retire. Retaining and attracting mature employees provides access to the skills and experience that mature employees have accumulated throughout their careers and provides opportunity for these skills, experience and knowledge to be shared with others in the organisation.

Workplace considerations

Retaining and attracting mature employees often requires three levels of consideration and action which include organisational, policy and people. For organisations, adapting to the changing needs of your workforce whilst continuing to, effectively and efficiently meet the demands of your customers will require initial planning and ongoing focus.

As a starting point, the table below looks at some of the challenges, opportunities and benefits of an ageing workforce.

Challenges Opportunities & benefits
  • Succession planning
  • WHS/OHS management
  • Age-based bias
  • Adapting workplace, processes and job roles
  • Higher productivity
  • Workforce diversity
  • Mentoring, coaching and transfer of skills and knowledge
  • Policy remaining current with changing landscapes
  • Policy development takes time
  • Lack of transparency on retirement processes
  • Creating psychological safety
  • Clarity for employees and management on process
  • Succession planning
  • Sector collaboration on best practice
  • Financial security and wellbeing
  • Growing risk of women facing poverty
  • Early retirement due to ill health
  • Housing affordability
  • Personal fulfillment and purpose
  • Enhanced health and wellbeing
  • Increased financial independence
  • Maintaining relationships and community

Organisations that have proactively embedded ‘pro-age policies’ to retain mature employees and educate them on their transition to retirement are proving successful. Creating psychologically safe environments for people to discuss their retirement aspirations with management, can lead to positive impacts on culture as well as clear benefits for workforce planning.

We're here to help

We are working with employers to provide workforce planning insights and solutions to support them in maximising the opportunities and benefits of an ageing workforce.

Not partnered with us yet?

If you're interested in partnering with us, learn how your organisation could benefit when you make First State Super your default super fund. Find out more.

Already an employer partner?

For existing employers, get in touch with our Employer Engagement team to see how we can assist your organisation. Our education programs and initiatives are designed to help your employees understand what retirement adequacy might mean for them and to help them make informed decisions about their retirement.

Supporting Information may be included from various third parties who are neither endorsed nor supported by First State Super.

Even though First State Super takes every effort to ensure the Information is true and correct at the date of publication, First State Super (and its related bodies corporate) is not in any way liable for the accuracy of the Information, including but not limited to, direct, indirect, incidental punitive and consequential damages.