White Paper produced by Robertson Executive Search on The Challenges faced by an ageing population

1. In Conversation with
Peter Mills
General Manager HR
Sydney Water
“Challenges faced by an aging workforce”
April 2011

2. Introduction
Welcome to the latest in the, “In Conversation with” series of White Papers. Firstly we would
like to introduce and thank our guest speaker Peter Mills from Sydney Water.
Peter Mills has over 25 years experience in Human Resources in a range of industries
including engineering, manufacturing, investment, business equipment/IT and petroleum. He
has held senior HR roles for such organisations Canon Australia, Warman International,
Caltex Australia and Mitsui Co. For the last 6 years Peter, has been working for Sydney
Water Corporation. As the General Manager Human Resources, Peter has lead a team that
has been strategically focused on resolving issues on managing today‟s workforce. This has
resulted in Sydney Water winning many awards including:
2008
Women in Leadership (winner) - Diversity@Work Awards
Work life balance (winner) - Diversity@Work Awards
Graduate intake Program (winner) HR Leadership Awards
2009
Best Change Management strategy (winner) - HR Leadership Awards
2010
Entry Level Program (2nd Runner up) - International Water Association - Professional
Development Award
Best HR Strategic Plan - HR Leadership Awards
Best Talent Management Strategy - HR Leadership Awards
Best Employment Branding Strategy - HR Leadership Awards
Employer of Choice (over 1000 staff) - HR Leadership Awards
Best Recruitment and Retention Strategy (Highly Commended) - HR Leadership Awards
Trainee of the Year (Rachael Cowan) - Group Training Awards NSW
Setting the scene
The topic of the ageing workforce and the wider challenges we face in Australia and globally
from the changing demographics and behaviours caused by this is well documented and as
our conversation flowed clearly was viewed as of importance to all business leaders.
Why is it so difficult to manage the challenge presented to us by an ageing population and in
turn the impact on our workforce?
Should we not be asking the question when; it is hard to figure out as retirement age is not
predictable regardless of the statutory guidelines.
At Sydney Water 25% leave at the official retirement age (65) and 47% don‟t know when
they are going to retire. You may think this is a good problem to have but it creates
uncertainty and makes it extremely difficult in regard to workforce planning and the risks
associated, especially with critical roles, in having improper succession planning in place.
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Peter Mills, Sydney Water April 2011

3. Why are people working longer?
There are some common reasons for people working longer and they are well documented,
below are some examples.
The average age at which women are starting a family is now 30 years old and even
going beyond that in the working environment which in itself changes the dynamics
considerably.
As more and more students move on to further education and the associated tuition fees
– parents can‟t afford not to work and need/choose to support their children.
Consequently children are leaving home at a much older age now and in relative terms
are more dependent on their parents financially than ever.
Carer responsibilities for older parents - adult children are caring for their elderly parents
which is now impacting their decision to retire at an „early‟ age, this is a double edged
sword; on the one hand people may retire early to spend time with their aging parents
and on the other they are being forced to work longer to pay for parents facilities and
caring.
Health issues are becoming more apparent and people are working longer to support
their partner / families
Inadequate retirement savings means that people are working longer as they have to
from a financial stability perspective.
The skills shortage
Labour Shortages mean it is hard to predict the workforce in the future and that there is the
opportunity to draw upon the ageing workforce to fill some of the supply gap.
Alternatively the idea of a job for life has changed dramatically over recent years. Peter Mills
“remembers thinking 20 years ago are there going to be jobs for our children in the future”,
this creates additional pressure for people to work longer as they may need to support their
children for longer.
The above is compounded by the emergence of Gen Y and Gen X groups who have a very
different mindset in relation to work and more recently in relation to money and corporate
behaviour post GFC.
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Peter Mills, Sydney Water April 2011

4. The health impact of the ageing workforce
Catherine Cahill talking in relation to her role and observations from The Cancer Council
gave us an additional view of the challenges faced by an ageing workforce:
Health issues are problematic for example, 1 in 2 people in Australia are diagnosed with
cancer of some kind. We need to start thinking about long term illness leave for our
workforce not just parental leave. This is a much bigger issue that the government needs to
address. There needs to be more flexibility in the workforce.
The impact of significant health issues in the workplace is dramatic as the timing is
impossible to diagnose, severe illness could affect people at any time and although this is
not specific to the ageing workforce it is more prevalent with age. It is also common that as
we age our prioritisation of what is important to us changes and should a family member
become critically ill it is more likely that people will step away from work to treat family as a
priority.
Staff turnover and how this affects the ageing workforce
At Sydney Water 30% of the employees have been with the organisation less than 5 years
12 % less than 10 years
so 58% more than 10 years
Peter explained that there is a lower turnover rate in the utilities sector, in part due to the
nature of the work and also due to excellent pension schemes that are in place.
At Sydney Water the impact of the ageing workforce is a real issue and particularly in regard
to critical roles – Water Engineers and Civil Engineers, these are high risk and when they
leave the workforce there is a real issue around replacing them with the same quality and
experience.
In a lot of companies the staff perception of Length of Service is that “everyone has been
here forever”. In Sydney Water‟s case nearly 30% of employees have been there for less
than 5 years.
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Peter Mills, Sydney Water April 2011

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Peter Mills, Sydney Water April 2011

6. Workforce audit – Where to stat and what to measure?
As with most strategic problems presented to organisations the first port of call is to
understand your base line metrics and statistics and look at risk and impact so you can then
start to create solutions. This is no different in regard to the impact of the ageing workforce.
Identify your issues – segment the workforce, identify critical positions etc
Resourcing strategy –it is important to build in the effects of the ageing workforce to your
overall resourcing strategy and risk profile
Look to innovative programs, for example at Sydney Water their Graduate Scheme has a
97% success rate in retaining graduates beyond their initial stations
Fit for work issues – sometimes it is not just about the base line metrics but about the
environment people working and the pressures of work, physical, mental and emotional.
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Peter Mills, Sydney Water April 2011

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Peter Mills, Sydney Water April 2011

8. Employee Value proposition and branding
The emergence of the EVP has been gaining increasing speed and attention, this is an
excellent way to address the challenge of the ageing workforce and be proactive to
responding to that segment of your workforce.
An extension of the EVP is regular communication and internal advertising; Marilyn Smith
from Brookfield said this was a great topic since her company doesn‟t advertise internally
and would build this into her strategic plan.
Summary
It was clear to everyone that the issues we face regarding the ageing
workforce should not be tackled in isolation but should part of the overarching
HR and talent acquisition and retention strategy. It was also clear that many
organisations have not addressed this issue and in fact do not have the base
line metrics to fully understand the risk and therefore potential solutions.
1. Managing and ageing workforce is only one part of capability development
2. Know your workforce – facts and myths
3. Identify your issues – Loss of knowledge/skills or inability to do the job
4. Have a plan and give it focus
5. Build processes and integrate them into the business
6. Start now as it takes time – years
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Peter Mills, Sydney Water April 2011