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Last updated: 18 March 2004

Workforce ageing: Materials for Human Resource practitioners in the APS

Part 2: Planning for mature-aged employees

Why do workers leave and how can you encourage them to stay?

In surveys undertaken for Organisational Renewal, current employees aged 50-54 years and over 55 years identified the main reasons for leaving the APS as:

• retirement
• financial security
• superannuation scheme design features

Other reasons also identified were: partner's retirement intentions, personal reasons (for example, carers' responsibilities) and health.

The median intended retirement age reported by current employees in the same survey was:

• 60 years for those aged 50-54
• 63 years for those aged 55 and above.

This would indicate that a high proportion of mature-aged employees already intend to work beyond 55, and service-wide data on retention suggest that this is likely to be increasingly the case.

Of those employees who indicated they intended leaving the APS at a particular time, some reported that their intention was a response to long periods of service, while others specifically referred to change fatigue and burnout.⁸

Sources of job satisfaction

A recent survey of a large sample of APS employees conducted for the 2002-03 State of the Service report provides some interesting insights into the factors which most contribute to job satisfaction amongst employees in different age groups.

Survey respondents were asked to rate the five most important factors from among 15 contributing to their job satisfaction, and then to rate their satisfaction with those factors.

The five most important factors as rated by APS employees across all age groups were:

• good working relationships
• flexible working arrangements
• opportunities to utilise skills
• interesting work
• salary.

For those aged 55 years and over the most important factors vary somewhat:

• good working relationships
• opportunity to utilise skills
• chance to make a useful contribution to society
• flexible working arrangements
• seeing tangible results from work.

The very substantial overlap of reasons for job satisfaction between age groups suggests that the factors that most contribute to job satisfaction remain reasonably stable through life-cycle stages, though their relative importance changes at different times. Those aged under 25, for example, rate the opportunity for skill and career development as important factors contributing to job satisfaction, whereas older workers are more interested in having the opportunity to use their skills, to make a contribution and to see tangible results.

Although data from employee surveys present a reasonably complex set of factors affecting job satisfaction and intentions to leave, most mature-aged employees are satisfied with their work-and are generally more satisfied than their younger colleagues. Employees over 55 tend to be even more satisfied than most other mature aged employees-most of them have made a conscious decision to continue working in the APS, even though their experience and financial situation would in many cases allow them to explore other options.

Some respondents to the Organisational Renewal survey cited poor management and supervision, workload and the perception that their work was undervalued as factors that may encourage their departure from the APS earlier than otherwise intended.

Of course employee experiences and motivations may vary considerably between agencies. Even though mature-aged workers, on average, have generally higher levels of job satisfaction than younger workers, the issue for agencies is to identify those areas that influence leaving and retirement intentions and to act to influence valued employees to stay longer. These may include, for example, learning and development, recognition for effort, flexibility and superannuation.

Understanding employees' intentions and the reason for those intentions

Having developed a profile of its workforce, as recommended above, an agency may see a clear business case for surveying its employees in order to get an agency-wide picture of retirement intentions and factors which may influence those intentions. Agencies should take care that in collecting personal information from their employees, they adhere to the information privacy principles. Employees should be advised of the rationale for the survey, the purposes for which it is to be used, and the fact that their participation in the survey is voluntary.

HR practitioners may want to gather agency-wide data for their mature-aged workers on a number of matters, such as:

• the age they intend leaving the agency
• why they intend leaving the agency at that age
• what would keep them working beyond the age when they currently intend to leave
• whether they have preferred working time arrangements (employees should be encouraged to respond in a realistic way, bearing in mind that superannuation can facilitate part time work and working at a reduced classification level)
• possibilities for re-joining the agency at a later time.

A mature-aged workers' survey was prepared for the MAC Organisational Renewal project and distributed to employees over 50 years old in a selection of agencies taking part in the project. The survey was prepared by the Australian Bureau of Statistics and addresses the set of issues listed above. Participation was voluntary and responses from all agencies were aggregated for use in Organisational Renewal. A copy of the survey questions is attached as a resource at Appendix B. Agencies may find it a useful basis for designing their own surveys. The questions seek demographic information and information on employee intentions and motivation, and provide a wide range of possible responses to the issues listed.

Agencies will need to analyse the information they have collected and consider how it will influence workforce planning, including the development of strategies.

Using learning and development

It is not surprising that highly experienced and often senior employees appear to be more interested in using their skills than in acquiring new ones. However, it is in the interests of both employers and employees to ensure that the desire to use skills remains closely associated with the desire to maintain and upgrade skills, and that all employees are encouraged to do both.

Although the APS has undergone a structural change towards a more highly skilled workforce, all skills require, over time, to be adapted, extended, or even replaced. A first qualification is no guarantee of lifelong employment. Agency business structures and needs are changing, and with them the work environment and the technology it uses. It is increasingly important that all workers have access to relevant training.

Research suggests that there are no particular styles of training delivery that are particularly suited to mature-aged employees. Training methods developed to target the performance of older employees have been found to have the same positive impact on the performance of all employees.⁹

However, it is important to ensure that the learning and development agenda for mature-aged employees is closely linked to the broader organisational performance agenda. Of course such links should be established for all learning and development activities, but it is particularly critical with individuals in this group that neither managers nor employees should assume that mature-aged workers are or should be choosing to run down their investment in training or any other developmental opportunity.

It is therefore critical to ensure that training and development for mature-aged employees, like that for all others, is:

• linked to the agency's future capability requirements
• linked to the individuals career development plan
• linked to the employee's performance plan and feedback.¹⁰

It is a matter of concern that among those over 45 who responded to the 2003 State of the Service employee survey and identified career development as a key contributor to job satisfaction, there was a high level of dissatisfaction with the career development opportunities being provided.

Using rewards and recognition

Data collected for Organisational Renewal showed that for mature-aged workers 'recognition for effort' was the area in which there was the greatest gap between the workplace factors that were important to them and their level of satisfaction with those factors. This gap existed for those who were still in the workplace and those who had already left it.

Recognition for effort is a key part of a performance management system. It is important to ensure that mature-aged employees remain full participants in an agency management system. Less than full participation because of unspoken assumptions related to their age will be counter productive.

For all employees, performance management should be used to sustain a formal career planning process with access to learning and development opportunities. It should not be assumed that mature-aged employees have waning interest in training or new job challenges. On the other hand, direct discussions with employees about their career desires and intentions can assist both managers and employees to design arrangements which suit and reward them both.

In this context there is scope to use performance management systems to plan for different types of work (for example, a shift from management to mentoring) or for different work timing (for example, part-time or task-specific timing) or interrupted work (for example, allowing for a sabbatical, or for caring responsibilities). A number of these options are raised below and canvassed in Flexible working arrangements for older workers, which is part of this package of materials. Changes should be integrated with appropriate skills and capability development and remain forward-looking.

Making work work for mature-aged workers

Organisational Renewal reported that most APS employees aged 50 and over intend to work beyond age 55. The report also found that flexibility around working arrangements and type of work undertaken can significantly influence the decisions of mature-aged workers about the timing of their retirement.

While superannuation is considered separately below, it is important that both agencies and employees understand the superannuation implications of flexible employment options, especially in the context of distinguishing between retaining valued employees and re-engaging former employees.

Where employees have a planned retirement date and the agency is negotiating to extend the period of APS employment on, say, a part-time basis and/or at a lower classification level, superannuation can be presented as a positive factor for the large majority of employees. This is because most employees who extend their APS workforce participation will experience a positive impact on the level of their superannuation benefit.

Where this is not the case (most notably in the shrinking group of employees affected by the 54/11 retirement incentive) agencies have available to them options for counteracting any negative impact that valued employees might otherwise experience.

Flexible-working arrangements

Agency-level agreement making has underpinned a shift from APS-wide conditions of employment to agency-specific arrangements. This devolved environment provides APS managers with the opportunity to promote flexible working options that assist mature-aged workers to combine employment with personal responsibilities and lifestyle choices.

The challenge for agencies will be to develop flexible working arrangements that support the retention of mature-aged workers and the capacity of managers to use those employees effectively. While agency capacity may vary, there is still considerable scope to introduce flexible working arrangements into the APS. Australian private sector employers of individuals in occupations similar to those of the APS are, for example, managing a workforce which is 33% part-time, while their APS equivalents are currently managing a workforce which is only nine per cent part-time.

Agencies need to ensure that there is no tacit belief that policies currently applying to flexible working arrangements only relate to particular sub-groups of employees. Comments made in response to the State of the Service Report 2002-03 employee survey suggest that significant numbers of employees believe that the flexible working time arrangements in place in their agency are skewed to support working parents, to the exclusion of others, or are only available in principle.

Some of the flexible working arrangements currently available in APS agencies which may contribute to the retention of mature-aged employees include:

• flex time and span of hours
• part-time work, variable on a weekly, monthly or seasonal basis
• job sharing
• home-based work (telecommuting)
• purchased leave
• career breaks (leave without pay)
• working at a reduced level.

Other effective flexible working arrangements identified in private sector studies include full or part-time sabbaticals (providing opportunities for further education, travel etc.) and alternative attendance patterns.

Resign and return

Rather than changing their existing working arrangements, some employees resign and seek at some later point to return to some form of employment on either a full-time or a part-time basis. Re-engagement of former APS employees on different arrangements such as contracts, or as non-ongoing employees, has become common. Such an option can provide valuable flexibility for agencies as well as for the former employees concerned.

Such re-engagement should occur only in genuine circumstances, and agencies should not engage in contrived arrangements to provide for the continued employment of employees.

One aspect of an employee's decision whether or not to return to employment in some form is the impact this decision may have on their superannuation entitlements. Employees should be advised to consult their superannuation scheme and to seek financial advice prior to finalising any such arrangements, particularly in circumstances where payment of a person's deferred pension has not commenced and that person proposes returning to public sector employment. This issue is canvassed in Superannuation and mature- aged APS workers: information on retention options and phased retirement in this package of materials.

There are a number of measures that agencies can use to keep in touch with former employees and to enable those employees to express interest in re-employment. Agencies may simply choose to establish registers which enable former and departing employees to register their interest in certain types of work and employment arrangements. This could be incorporated into standard exit surveys or separation procedures. There is scope for agencies to use interactive website-based databases which will allow people to update their own details and, by opening or closing certain fields, keep in touch with line managers as well as HR areas either directly or indirectly should they so choose.

Depending on the type of work involved, making best use of former employees may call for tailored management approaches to keep them up-to-date and project ready. FaCS has undertaken to establish an alumni network that will enable employees to be contacted post-retirement when employment opportunities arise, to be invited to seminars on family and community issues and to receive workplace newsletters.

More detailed information about flexible strategies, and how they can be used to maximise the performance of mature-aged workers can be found in the resource material prepared by the DEWR, Flexible working arrangements for older workers, which is included in this package.

Using workplace agreements

A number of APS agencies have included in their workplace agreements commitments to the development of strategies to retain their mature-aged workers, and have specifically identified flexible working arrangements as a means of achieving this. Flexible working arrangements for older workers provides examples of agency agreements that have articulated a commitment to using such arrangements. DEWR has put together a database of family-friendly agreement clauses that agencies can use in their agreement making. It is at http://www.wagenet.gov.au/FFAC.

Phased retirement and changing job roles

Employees may wish to phase in their retirement by changing their roles in the workplace. Depending on their personal circumstances, they may choose to do this before retiring or following retirement, for example by returning as a contractor.

Typically, phased retirement may involve shedding management responsibilities in order to focus on project or mentoring work, perhaps in conjunction with more flexible working time arrangements. But it can also involve 'handover' work such as that identified above under knowledge management. That is, employees aiming to retire might be encouraged to stay on in an agency for a period of time to:

• focus on mentoring and coaching employees being targeted through succession management plans
• job-share with an employee who may be staying, in order to hand on skills, knowledge and networks
• enter into a handover role, partnering with consultants who may be taking over a function.

Phased retirement could also involve remaining with, or returning to, an agency but dropping back one or more classification levels and perhaps also working a reduced number of hours. To the extent that such an option is a response to burnout, agencies will need, as a matter of priority, to review their arrangements for managing leave and excessive hours. But to the extent that phased retirement is chosen as a mutually beneficial approach to leaving the APS workforce, it can offer a constructive means of making the best use of the skills and abilities of employees nearing departure.

Elder care

While mature-aged employees are less likely than their colleagues to have young dependents, they are more likely to have adult relatives, particularly parents and partners or spouses, who may require short-term or longer-term care.

Some of the stress and difficulties faced by care givers who are trying to juggle caring and work responsibilities could be relieved if they were able to access flexible working arrangements, or changes in the overall design of work, such as those outlined above.

Agencies can also adopt targeted strategies that can assist employees with elder care requirements, including the provision of short-term facilities and advice on longer-term support.

Staff may also need to be able to take time off after a relative dies in order to help wind up their personal affairs.

Providing advice to line managers

As the FaCS case study indicates, it will be important for HR practitioners to build the capability and confidence of line managers to use the flexible policies available in an agency and generally designed to be 'family friendly' in order to retain older employees. Line managers need to be aware of the implications of the ageing of their agency's workforce, and the strategies available to them to respond to those issues. Line managers should also be encouraged to use their agency's performance management and feedback arrangements to ensure that valued employees are aware that they are valued and that there are options which can be used to encourage them to stay.

The Commission has prepared a short pamphlet for line managers addressing the key issues raised in this package of materials. This pamphlet can be adapted by HR areas to address demographic and operational issues specific to the agency. Managing ageing in the workplace: advice for APS managers is at Appendix 3.

Superannuation

While a number of factors influence decisions to separate from the APS, 15% of current employees surveyed by the MAC gave superannuation as the main driver underlying their decision to leave the APS. In addition, 47% indicated retirement and 21% gave financial security as their main reasons for leaving-both of which are also more than likely linked to superannuation.

As the separation intentions of older employees are highly influenced by superannuation-related issues, it is crucial that agencies understand how superannuation rules impact on the retention of employees approaching retirement age.

Organisational Renewal examined factors specific to the Public Sector Superannuation Scheme (PSS) and the Commonwealth Superannuation Scheme (CSS) that encourage mature-aged workers to leave the APS. The report found that agencies need to understand and provide accurate information on these schemes and the options that exist to encourage mature-aged workers to remain in, or return to, the APS. The report also found that the impact on agencies of superannuation arrangements is manageable if they develop strategies and policies to address these factors as part of their workforce planning.

To assist agencies to deal with the potential impact of superannuation on the retention of older workers, the Department of Finance and Administration (Finance) developed guidelines for setting superannuation salary, which were issued to APS employers in August 2003. The guidelines set out circumstances in which it may be appropriate for an employer to set a higher superannuation salary for PSS or CSS members (without increasing take-home pay) to address the financial incentive that the member may have to cease APS employment.

Finance has also developed guidance material for this package, as have the PSS and CSS Boards. The Finance material, Superannuation and mature-aged APS workers: information on retention options and phased retirement, and the PSS and CSS Boards’ fact sheets address:

• the design features of the PSS and the CSS and their implications for early retirement
• strategies for agencies wanting to retain employees affected by the 54/11 or maximum benefit limit issues
• for both schemes, the availability of retirement benefits from age 55, and in particular the fact that superannuation is not a barrier to having a phased retirement such as by working part-time or at a reduced classification level.

Additional information for human resource practitioners on these issues can also be found:

• at Appendix C of Organisational Renewal
• by emailing Comsuper at employer.help@comsuper.gov.au
• for employees who are not members of the PSS or CSS, by telephoning Finance on (02) 6215 3479.

Contact list

• For information on the National physical activity guidelines, visit the website: http://www.health.gov.au or direct address http://www.health.gov.au/pubhlth/publicat/ document/physguide.pdf
• For information on the changing APS workplace, mature-aged employment in the APS, and the 54/11 superannuation and retirement issue, visit the Management Advisory Committee website www.apsc.gov.au/mac or direct address http://www.apsc.gov.au/mac/organisationrenewal.pdf Management Advisory Committee, Organisational Renewal, 2003.
• If you wish to locate the range of anti-discrimination legislation, visit the Human Rights and Equal Opportunity Commission website: http://www.humanrights.gov.au/legal/legislation.html
• If you wish to locate the database of family-friendly clauses in workplace agreements, visit the Family Friendly Agreement Clauses website: http://www.wagenet.gov.au/FFAC
• If you wish to access the Australian National Audit Office's Better Practice Guide Planning for the workforce of the future, visit the website: http://www.anao.gov.au and navigate via publications > Better Practice Guides
• If you wish to access the Australian Public Service Commission's publication Managing succession within the APS, visit the website: http://www.apsc.gov.au/publications03/ managingsuccession.htm
• To access the Long Service Leave (Commonwealth Employees) Act 1976, visit the following website: http://scaleplus.law.gov.au/html/pasteact/0/293/top.htm
• To access the Superannuation (Productivity Benefit) Act 1988, visit the following website: http://scaleplus.law.gov.au/html/pasteact/0/396/top.htm
• For information on the issue of phased retirement and its implications on superannuation, visit the following websites:
  http://www.pss.gov.au/pss/factsheets/psf10.htm
  http://www.css.gov.au/css/factsheets/csf10.htm
  http://www.pss.gov.au/pss/infosheets/mac_report.htm
• For individual Public Sector Superannuation Scheme and Commonwealth Superannuation Scheme member enquiries, including where a member seeks a projected benefit, the contacts are:
  Phone: 13 23 66
  Email: pss.members@comsuper.gov.au or css.members@comsuper.gov.au
  Mail: ComSuper
  PO Box 22
  Belconnen ACT 2616
  Fax: 02 6272 9801 or 02 6272 9808.

Further reading

Access Economics, 'All in it together', a paper prepared for the Department of Health and Ageing, Canberra, June 2000

ANAO, Managing people for business outcomes, June 2002

ANAO, Planning for the workforce of the future, March 2001

Australian Bureau of Statistics, Labour force projections 1999-2016, Catalogue no. 6260.0

Australian Public Service Commission, APS Employment Database, http://www.aspc.gov.au/apsed

Australian Public Service Commission, Managing succession in the Australian Public Service, 2003

Australian Public Service Commission, State of the Service Report 2002-03 http://www.apsc.gov.au/stateoftheservice/0203

Australian Public Service Commission (APS), Statistical Bulletin 2002-03, http://www.apsc.gov.au/stateoftheservice/0203/statistics

Business Council of Australia, 50+ Age can work: a business guide for supporting older workers, August 2003

Commonwealth of Australia, Intergenerational Report 2002-03, May 2002

Management Advisory Committee, Organisational Renewal, 2003

Management Advisory Committee, Performance management in the APS: a strategic framework, 2001

Wooden M, Cully M, Vanden Heuvel A, Curtain R, Barriers to training for older workers, aged 45 years and over and possible policy solutions, Department of Education, Science and Training, 2001

 

8 Management Advisory Committee, Organisation Renewal, 2003, p.39

9 Mark Wooden, Mark Cully, Adriana VandenHeuvel, Richard Curtain, Barriers to training for older workers, aged 45 years and over and possible policy solutions, Department of Education, Science and Training, 2001, http://infocat.dest.gov.au The researchers undertook: a review of relevant Australian and international literature; statistical analyses of large, nationally representative surveys, including the Australian Bureau of Statistics education and training surveys for 1989, 1993 and 1997, and the 1995 Australian Workplace Industrial Relations Survey; focus groups with older persons, employed and unemployed, and with human resource managers; and three enterprise case studies.

10 See Wooden et al., Barriers to training for older workers, pp. 41 ff.

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