EXECUTIVE HEALTH : Our workforce is aging – Should companies care?

The greying of the workforce is rapidly advancing fact of life and, while many organisations acknowledge this and its potential challenges, not all have strategies to deal with it.
The changing workforce demographic results not only from the babyboomer bulge breaching its seventh decade, but the reluctance of some of its cohort to exit the workforce. And, given the current skills squeeze, it’s just as well. That squeeze has encouraged some employers to be more imaginative in constructing incentive packages for recruitment and retaining employees, but are employers en masse wooing the aging baby-boomers with promises of perks to help keep them fit and healthy? The answer is ‘not yet’.
Southern Cross Corporate Solutions COO Peter Tynan confirms that the composition of the workforce is showing dramatic change. Unemployment statistics for the June 2006 quarter show the lowest rate of unemployment is in the 55-59 year age group at under one percent (the next lowest was 50-54 years with 1.6 percent – down from 2.2 percent for the same period in the previous year). The highest rate is in the under-19 age group with 14 percent unemployed.
By around 2020 growth in the labour force is expected to be negative, and by mid-century one in four New Zealanders will be aged 65 or older, compared with one in eight today. fall in the labour force has the potential to reduce the rate of economic growth, so politicians and planners will be keen to avoid the dilemma confronting the Australian government: early retirement.
According to Queensland University of Technology researcher Megan Tones, Australians can’t wait to leave the workforce once they hit 50 causing looming labour shortage and the dashing of government hopes that people will work into their 70s.
“[The issue is] not just the labour shortage and cost of paying pensions to people for 30 years or more, it is also the fact that people who are engaged in enjoyable work have fewer physical and mental health problems thus reducing health spending,” said Tones.
And not only does being in work mean fewer health problems for the over 50s but older workers can be more productive than their under 35-year-old colleagues because they actually have fewer health and lifestyle problems. According to research conducted by Australian Health Management, workers over 55 are more productive than under-35s because they suffer less depression and headaches and have no childcare problems. This contradicts common perception that older workers suffer more health-related problems than other age groups.
A survey of public service departments in New Zealand as recently as late 2003 revealed that 30 percent of respondents believed that “health problems” were disadvantage of an older workforce, and that topped the list of perceived downsides.
But HR specialists and those managing health and safety risks in the workplace report that the growing popularity of health and wellness employment incentives is just part of trend towards flexibility and more holistic approach to employment packages rather than specific response to the demographic shift.
Ian Taylor, Sheffield director and partner, says that in the end of the market they operate in – executive recruitment – the issue is talent, not age. “But it’s fair to say that in talent-short market, the skills and experience of an older executive are more appreciated.
“There are many elements to incentive packages including healthcare and gym memberships. The complexity of incentives is far greater now than previously.”
Sheffield has done lot of work in the area of incentives in remuneration packages. Taylor advises that with most organisations what is offered is matter of company policy and that most workers in the corporate sector have access to healthcare packages.
“In our experience there is not definable trend [towards packages designed to attract older executives with health benefits]. In the area we’re dealing with, executives have had those things in place for some time, and have learned to mitigate their own risks rather than look to the employer.”
Director of Auckland-based Frog Recruitment, Jane Kennelly, says health and wellness elements within employment packages are far more prevalent now. “Some organisations are more onto it than others. Employers need to be more future focused and offer employees choice; have range of benefits on offer – that is what they want. They can then choose what is of value to them; health insurance, gym memberships etc.”
She operates scheme at her company whereby staff get an annual allowance to spend on health and well-
being and and it’s been utilised for range of benefits from molemap to prescription glasses.
Frog Recruitment recently conducted research involving HR managers from large New Zealand businesses representing combined New Zealand workforce of approximately 15,000 employees. Results showed that while 83 percent of workplaces recognised the aging workforce as being of high importance to their future staffing, the majority were ill-prepared to deal with the issue. However, said Kennelly, “organisations are now starting to focus on developing dedicated strategies to deal with the older workforce”.
“They need to be thinking about all the options to attract this demographic: part-time; job sharing – the whole raft of alternatives available.”
And she echoed the Australian research’s positive conclusions: “Older workers are likely to stay in jobs for longer and have lower levels of absenteeism than younger workers… and are generally past the age of having young dependent child-ren, and have less social commitments than their younger counterparts, resulting in fewer sick days.
“The direct result for employers is lower turnover costs, reduced absenteeism and increased staff loyalty, all of which impacts directly on profitability.”
Alongside the trend towards flexible health and wellness packages in the workplace is change in focus by health insurers to wellness packages (ie, preventive care) from the more traditional ‘bottom of the cliff’ insurance approach. This is an inevitable response to soaring medical costs with greater range of available interventions and the rapid increase in expensive high-tech medical and surgical solutions.
Southern Cross’ Peter Tynan says the fastest growth area of the group’s activity is in ‘preventive services’. The focus of their corporate business now is “better health outcomes and keeping people out of hospital”. Ironically though, he said that greater participation by older people in the workforce was one of the reasons why there is still ongoing small growth in employer scheme health insurance.
“The older age group ascribes greater value to health insurance than younger workers do.”
Tynan says that third of all companies surveyed by the Equal Employment Opportunities (EEO) Trust were looking to institute wellness programmes. The research shows that the most popular with organisations are vaccination and walking programmes.
Employees are driving the workplace benefits; “Gen Yers [those in the workforce under 28] have been brought up with focus on health and personal wellbeing and work/life balance; whereas Generation X [28-44 years] is still catching up.”
“If companies put these programmes in place, employees will come to you as an ‘employer of choice’ and in skills shortage/low unemployment market this is important.”
Tynan explains that in the surveyed ranking of the value of different aspects of employment and remuneration packages in New Zealand, health consistently ranked fourth or fifth (behind salaries, cars and holidays). Public pressure is now also driving the increased value of health benefits in the workplace. Awareness of health and healthy lifestyle issues is constantly pushed through all media and has become ubiquitous in our society.
Southern Cross deals with two distinctive types of organisations with quite different health management requirements, says Tynan.
1) Prod