Gallagher explores risk management strategies for Australia’s ageing workforce

Given Australia’s ageing workforce, Gallagher advises businesses to assess how this change impacts their risk profile and find ways to limit potential exposure.

Australia’s population is expected to grow older and smaller over the next decade than was predicted before the pandemic. By June 30, 2033, the population is expected to reach 29.9 million, a growth rate of about 1.2%, slower than before the pandemic. Fewer young workers could pose economic challenges, but an older demographic could provide a solution.

Factors leading to an ageing workforce in Australia

In Australia, more people are working into old age. The participation rate for people over 60 has more than doubled in the 20 years to April 2021. For men over 60, it has almost doubled from 10% to 19%, while for women it has almost quadrupled from 3% to 11%.

• greater flexibility in roles requiring extensive knowledge
• more stringent labor markets
• better health and education
• larger mortgages
• later starting a family
• casual labor
• development of technology enabling remote work

Business Risks Associated with an Older Workforce

From a risk management perspective, Gallagher said employing older workers increases exposure to liability claims related to duty of care and the possibility of age discrimination claims. Employment practices liability insurance can help manage these risks.

Broader risk assessments are needed to address age-related vulnerabilities. Caregiving responsibilities may increase, requiring adjustments in safety training, job assignments, and manual task designs.

Gallagher said clear health and safety policies were key to preventing regulatory and civil disputes.

“For example, if an employee working in a noisy environment makes a claim for noise-induced hearing loss, the employer must have sufficient evidence to prove that the hearing loss was age-related and not a direct result of workplace conditions,” the release reads.

Supporting the physical and mental wellbeing of all employees is vital, especially as we consider the wider age range in our workforce.

Reflections on Age Discrimination

There is no mandatory retirement age in Australia, making it illegal to force retirement based on age.

Gallagher said employers need to strike a balance between realistic business needs and potential legal actions.

“For example, if a 75-year-old wants to stay in a customer service role and is responsible for selling products and services to people who are much younger, there is a potential risk of cultural disconnect. An employer may feel they risk losing business if they don’t move a younger person into the role, but that could expose the company to a discrimination claim. Any necessary change needs to be negotiated carefully,” he said.

An ageing workforce can also affect mergers and acquisitions. Under the Fair Work Act’s transfer provisions, buyers inherit the seller’s collective agreements when an employee’s employment is terminated, they start a new job with the buyer, or the job remains the same.