The ageing workforce

Australia has an ageing population and an ageing workforce, which has economic, productivity, service delivery and workforce planning ramifications.

Broadly, the pressures from an ageing population are twofold. First, there is a fiscal impact from more people relying on the age pension and from higher demand for aged care and health services. Second, there will be fewer employees available to deliver services as the workforce participation rate declines over time, although it may be softened slightly by expected delays in retirement.19

As in other states, the NSW public sector workforce is ageing at a faster rate than the private sector workforce and there is growing interest by governments in the impact of these trends. As Figure 22 shows, the only significant growth is in employees aged 55 years and older.

Figure 22: Age trends in the NSW public sector


Source: NSW Workforce Profile 2004–2014.

Retirements will escalate across NSW as the large group of baby boomers grows older. Baby boomers are currently aged 49–68, and in the public sector make up 40% of the workforce (156,549 employees). However, since 2007 there has been a downward trend in the retirement of those aged 55–59. The main increase is in employees 65 years and older, with relatively stable trends at 60–64 years, the group with the largest number of retirees (see Table 9).

Table 9: Age group retirement trends


Source: NSW Workforce Profile 2007–2014

In the 12 months to June 2014, 3,958 employees retired (mostly teachers) and the mean age of retirement was 62 years. In the People Matter survey, relatively high proportions of employees said they intend to retire after 65 years of age. Of those currently 55–59 years old, 21.3% intend to retire at 60, 36.5% when aged 61–65 years and 23.3% when they are over 65. Of those 60–64 years old, 24.3% intend to retire at 65 and 41.3% when they are over 65 years of age.

Pressures on supply and demand

The public sector is not a uniform workforce. Groups with the youngest median age are police, trainee doctors, nurses and trades workers in energy companies, while older workers cluster in TAFE, home care, aged care, health, school education and transport. Table 10 shows larger agencies with a median age above the public sector mean of 45 years.

Table 10: Larger agencies with a high median age


Source: NSW Workforce Profile June 2014 (headcount greater than 1,000)

There are pressure points in some services where employees have a high median age overall and there is not always a pool of young employees within that service to replace them as they retire. Older employees are located in the fastest growing services of health and aged care. There is a concentration of older employees in some occupational groups, including health workers in chronic disease management, support workers in disability, and home care and housing workers.

Women play a key role here: 14% of the total public sector workforce is made up of women over 55 years old, yet fewer young people are moving into the services where they work. There are also regional differences. For instance, while there is an adequate supply of teachers to replace those who retire, there are still shortages in specific regional areas.

Planning for an ageing workforce

Considering the trend in pending retirements over the next 15 years and beyond, agencies need to be vigilant regarding trends in all age groups, not just older people. Attracting young people to the public sector is a key factor in planning for an ageing workforce.

As large numbers of employees move into retirement, particularly in high-demand services, replacing them from a decreasing pool of employees may not be viable and it is here that productivity gains are required. Redesigning jobs and developing innovative models in service delivery are already being considered by some agencies. There are opportunities for the public sector to take a lead in facilitating the continuing employment of older public servants who choose to remain in the workforce by offering flexible working hours and roles that make best use of their skills.

All agencies collect workforce data. However, not all agencies develop workforce plans that are able to align with future workforce requirements. Examination of workforce trends using three-to-five-year projections will enable sufficient planning lead time for many services, but for others more urgent attention is required.

The Agency survey asked agencies about the practices in place to manage their ageing workforces and the results are shown in Figure 23.

Some 80% of agencies had created a report showing the distribution of employees across all ages, and 16% describe that report as highly developed. In total, 84% of agencies noted they were to some extent aware of the percentage of employees likely to retire in the next five to 10 years and 9% described this work as highly developed.

Figure 23: Ageing workforce planning by agencies


The survey also showed that agencies had varying levels of focus on attracting and retaining employees of different ages. Just under two-thirds had a plan for attracting and retaining younger employees (9% highly developed), while 57% had taken similar measures for older employees (1% highly developed).

Plans for reducing age discrimination and stereotyping were more common in transport agencies (72%) compared with 25% to 46% of other clusters. Health and wellbeing programs, life transition management programs and succession planning were more common among education agencies than in other clusters.

19.Australian Bureau of Statistics (2014), Does size matter: population projections 20 and 50 years from 2013

The Public Service Commission acknowledges the Gadigal people of the Eora Nation, the traditional custodians of the land on which our office stands.