Australia Post delivers ageing workforce insights

However, while you might not need to be a card carrying member of Mensa to know it’s a problem, you may well need a brain the size of a planet to come to terms with all of the implications that the ageing population brings with it. Peter Drucker for one believes that ageing is the biggest issue facing management this century.

“It’s still very big on our radar,” says McDonald. “We’re an organisation that relies very heavily on our people. While we’ve got a fair bit of technology, we’re very much a people-driven organisation and we value the commitment of our staff, so it’s a very topical issue for us.”As a consequence, rather than resiling from the task, Australia Post has thrown itself into the fray wholeheartedly and the results have been very interesting.

Australia Post first completed analysis on its workforce demographics, not only of the organisation as a whole, but of particular organisational groups more than a decade ago. “We took a snapshot of what those trends might be some years ago – what it might be at management level, what it might be at our shop floor level and what action we could take to deal with those issues,” says McCarthy.

One of the early drivers was customer service. As the population changes shape and gets older, then it seems to be important that the shape of the organisation broadly mirrors the shape of the population. “If our workforce was predominantly young and the customers we served are predominantly old, then there’s issues around whether the workforce is able to understand the customer’s needs,” explains McDonald.

Human resources became involved because it would first need to understand the scale of the problem at hand if it was to meet customer service needs.

“When we looked at our demographics as part of our human resource planning, we were aware that our workforce was ageing in line with the Australian population. We noted that from 1992 to 2002, the modal age shifted about 12 years in that period. So early on we started thinking, well what does this mean?”

Like any country, participation in work is one of the big drivers of Australia’s GDP. Australia’s participation rate today of over 55s is low compared to a lot of other countries. The more Australia Post got into it, however, the more it realised just how complicated an issue they were wading into.

Australia Post has also cross referenced its own findings with other available statistics such as those produced by the Australian Bureau of Statistics. What it has consistently found is that developments at Australia Post are being mirrored in the broader community. “For instance there’s a lot of discriminatory practice against older workers. What does that mean for us?” asks McCarthy.

Ageless discrimination

Another surprising conclusion that Australia Post has reached is that it’s not just older workers that are affected by the ageing problem. Younger employees are equally compromised by the ageing problem. “If we’ve got young people who are filled with excitement and enthusiasm and they’re sat over by somebody who’s been in the same job forever and hasn’t kept their skills up-to-date, then what are the consequences of that?” McCarthy continues.

McDonald says that Australia Post has employed a strategy that maximises the benefits and skills of older workers with the enthusiasm and energy levels of younger workers. “I think that integration between different generations is an important part of the problem.”

Australia Post has debunked a lot of myths about younger people. For instance, Australia Post has found its younger workers are very interested in their careers and that they deeply appreciate the mentoring older workers can offer.

“While younger workers are very adept at getting answers to questions electronically, they were also quite good at getting answers to questions from human beings. They really valued having a supervisor who would answer their questions, coach them and tell them about the organisation,” reports McCarthy.

“Their enthusiasm matched with their lack of experience makes them quite difficult to manage, so when they are supervised in such a manner, they really appreciate it. So that has implications for graduate recruitment programs. You need to think carefully about how you manage these people,” adds McDonald.

Succession planning

So if young people need older workers who are still interested and enthusiastic about work, how do you keep those older workers engaged? McDonald says that Australia Post has seen leadership and succession planning as instrumental. “Everybody within the organisation has a leadership responsibility in one way or another, whether you’re a technical expert or general manager,” he says.

Australia Post is currently running as a pilot program in Western Australia called Pathways. This initiative breaks down the levels of work into steps and then maps out the development needs into programs that allow for progression. “That’s all about encouraging learning and leadership skills,” McDonald says.

Aware of the discriminatory practices meted out to older workers, Australia Post conducted its own study by asking volunteers aged over 40 to draw pictures of their own careers. Their responses clearly depicted peaks and troughs. “We found that over 70 per cent of them believed their careers had either plateaued or declined. We wondered how to deal with that, and the way to do that is to talk about it,” says McCarthy.

Retaining the cream

If you’re wanting to keep people who are highly skilled, then you must realise that they are people with choices by definition, explains McDonald. “They don’t want to be treated like everybody else – they want a tailored solution and I think that human resource areas are not nearly as tailored at outcomes for people as they should be,” he says.

Industries of concern

While Australia Post’s divisions do largely line up demographically with the broader Australian community, an analysis of the employment categories shows up some particular areas of concern – not just for Australia Post, but across Australia as well.

Technicians who maintain Australia Post’s IT systems are a big concern. The problem in this employment category derives from the fact that technician and IT disciplines have started to merge.

Australia Post interviewed 60 people across its IT division and found that state-of-the-art IT workers start losing that drive for excellence from about age 30. “A few things cause this. They’ve been at the leading-edge for quite a few iterations of technology and to stay at the leading-edge requires a lot of effort – reading journal articles all the time and so on, after work stuff.

“By the time they get to 32 they’re starting to have families and relationships; there’s other things that are important in their lives. Pay structures tend to reward people getting out of the specialist areas and into general management,” says McCarthy.

So based on the projections that the supply of young labour is drying up because people aren’t being born as rapidly and if older workers aren’t keeping their skills up-to-date, then the issue is who will be able to maintain the technology of the future.

The second employment category that’s ageing rapidly for an entirely different reason is transport. It simply doesn’t attract young people to it. A management consulting firm conducted a study of the transport industry and found that it suffers from an image problem. “Young women thought that if you work in transport you’ve got tattoos and you beat your wife,” McCarthy says of the research.

If supply dries up, then demand increases and the cost of that labour expands in line with this demand.

Education: a dual responsibility

One of the big issues that Australia Post uncovered was the demographics of those currently in Australian education systems. Bureau of Statistic figures suggest that tertiary education largely stops at age 30. “There’s really big educational issues for Australia in all of this too,” muses McCarthy.

This is something that Australia Post has started to address with its life-long learning strategy. “This is not just an employer’s responsibility. There’s a tendency among employees within Australia to see their employers as parents. So they haven’t taken responsibility for keeping themselves employable – keeping their skills up-to-date, keeping their CV right and keeping their way of thinking up-to-date. I think this will be a big thing for Australia and there will be dual responsibility for this,” says McCarthy.

Super models

Superannuation schemes are still geared towards encouraging people to leave work early. With two super schemes in operation at Australia Post, the Commonwealth scheme encourages people to leave just prior to 55, while the Australia Post Super Scheme is a defined benefits fund which promotes the importance of making super contributions. “The Australian psyche was that you left work at 55 and we’ve found that this is very much the case at Australia Post. The actuarial studies we’ve looked at suggest that this will take some time to change,” says McCarthy.

“Defined benefits are changing to defined contributions, which are forcing people to work longer. But if they’re going to work longer, we need to make sure that they’ve got their skills up.”

However, as Australia Post has already found out, people are largely not keeping their skills up-to-date.

Talking proves the answer

So, what to do with such complex issues? Australia Post says that it has discovered the answer lies in the most old-fashioned of solutions: talking about the issue. “I feedback research, give talks, provide knowledge about the subject. Unless people are talking about something you can’t change it. We’ve been actively encouraging discussion,” says McDonald.

Australia Post has also talked up the benefits of its diversity policy and McDonald points out that it’s “being reinforced very vigorously. A diverse workforce made up from people of different ethnic backgrounds and age groups is a real competitive business advantage.”

With a heavily unionised workforce, McDonald has nothing but praise for unions and the ACTU in regards to the levels of support they have delivered on these initiatives. “This is something that unions and employers can agree on, it’s like OHS – it makes sense for both sides.”