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Age diversity

An emerging issue in workplace diversity over the last few years has been the importance of creating a workplace environment that is attractive to, and draws on, the skills of employees of all age groups. It is essential that intergenerational issues that arise are handled effectively in the workplace if agencies are to attract and retain employees from a broad spectrum of ages. This is particularly important as the impact of the ageing of the workforce becomes stronger.

This section looks at the age diversity of APS employees, particularly young employees, aged less than 25 years; mature-aged employees, aged 45 years to 54 years; and older workers, aged 55 years and older. Younger employees have relatively low rates of representation in the APS, although their representation has increased recently. The APS, however, is increasingly reliant on employees aged 45 years and over. In the past 10 years the 45 plus age group has grown from 33.9% of all ongoing employees at June 1998 to 41.0% at June 2007, although there is significant variation in the representation of employees aged 45 years and over in different agencies. There have been particularly high rates of growth for employees in the 55 years and over age group, which has grown from 5.9% to 11.2% during the same period.

There is also evidence that employees in the 55 years and over age group are increasingly returning to the APS on a more flexible basis after retiring or resigning—51.8% of non- ongoing employees in the 55–59 age group and 47.5% in the 60 and over age group have previously worked as ongoing employees. A Merrill Lynch survey reports that about three-quarters of baby boomers want to continue to work in some capacity after they reach retirement age.¹⁵

Employee survey results suggest that older workers who have recently joined the APS (i.e. those with less than one year’s service) were most attracted to the APS by the opportunities it offered them to contribute to making a difference to the lives of Australians, job security, and geographical location (including commuting costs and time). Their reasons for staying in the APS were the ability to contribute to making a difference to the lives of Australians, a team-oriented and collaborative work environment, and senior leadership of a high quality.

A number of other issues are also likely to affect the ability of the APS to retain employees aged 45 years and over. These include access to flexible working arrangements, the earnings rates of the superannuation funds, which affect the benefits available to those who resign before age 55, and general levels of job satisfaction.

Figure 5.8 shows trends in the separation rate¹⁶ for APS employees in the 50–64 age range in 1997–98 and 2006–07. It shows that in the earlier period there was a steady rise in the separation rate for older workers, with a dramatic peak at 64 years because of the impact of compulsory retirement. For the latter period, there is a clear peak in separations at age 54 (the 54/11 effect caused by the operation of the CSS) but otherwise lower separation rates at all ages compared with 1997–98.

Figure 5.8: Separation rates for ongoing employees aged 50 to 64, 1997–98 and 2006–07

Figure 5.8 compares the separation rates for ongoing employees aged 50 to 64 in 1997–98 and 2006–07. The separation rate fell between the two periods except for those aged 54 where the separation rate in 2006-07 exceeded that in 1997-98. In general, the separation rate increased with age.

Source: APSED

Last year’s report noted a reversal in the declining employment of younger people in the APS. The reversal continued this year. The representation of young people at June 2007 was 5.0%. Looking at the long-term trend, however, the proportion of young people in the APS is still lower than it was in 1993 (8.7%).

Young employees have a different profile to the overall APS. They are more likely to be employed on a non-ongoing basis, and their separation rate is higher. Separation rates for young employees have shown a trend to increase over time (6.3% in 1998 to 11.0% in 2007). Employees aged under 25 years accounted for 7.3% of all ongoing separations during 2006–07.

Employee engagement and job satisfaction

Younger employees (aged under 25 years) were slightly more satisfied with overall job satisfaction than mature-aged employees (45–54 years) this year, but results for both groups were not dissimilar to that for the general APS. Older workers (55 years and over) were much more positive about overall job satisfaction (87% compared to 81% for the APS overall).

In contrast to the job satisfaction results, younger employees were much more satisfied with a range of measures relevant to employee engagement than both mature-aged and older workers. Their satisfaction with the summary employee engagement measure described in Chapter 3 was 78% compared to 59% for mature-aged employees and 63% for older workers.

Reflecting this result, young employees were more satisfied with the majority of the individual employee engagement factors that make up this summary measure (see Figure 5.9). Young employees were more satisfied with Agency Culture, Senior Leaders, Learning and Development and Career and Development Opportunities than mature-aged employees and older workers. Young employees were less satisfied with the factor, Current Job, and slightly less satisfied with the factor, Understanding Current Role. Interestingly, in contrast to the general trend, older workers were more satisfied than either young or mature-aged employees with the factors Current Job, and Understanding Current Role.

Figure 5.9: Employee satisfaction with factors identified through factor analysis—young employees (under 25 years), mature-aged employees (45 years to 54 years) and older workers (55 years and over), 2006–07

Figure 5.9 shows employee satisfaction with factors identified through factor analysis for young employees (under 25 years), mature-aged employees (45 years to 54 years) and older employees (55 years and over) in 2006–07. Young employees generally had higher levels of satisfaction than either mature-aged or older workers. However, older workers were more satisfied than both young and mature-aged employees for the factors Understanding Current Role and Current Job.

Source: Employee survey

The low level of satisfaction by mature-aged employees and older workers with the majority of the employee engagement factors needs to be seen in the context of their higher overall rates of job satisfaction. Nevertheless, it suggests that agencies may want to focus on how they can address the concerns reported by this group, especially given that increasing the retention of older employees is an important part of the response to an ageing workforce.

Attributes important to overall job satisfaction varied between the age groups (see Table 5.12), although good working relationships and flexible working arrangements were important to all three groups.

Attributes distinctive to young employees were regular feedback/recognition for effort and opportunities for career development, and good manager was a distinctive attribute for mature-aged employees. Attributes unique to older workers were chance to make a useful contribution to society and seeing tangible results from my work. Salary was in the top five for young and mature-aged employees but fell just outside the top five for older workers. Its importance, however, declined with age. This contrasts with the results for attraction factors, reported in Chapter 4, where remuneration increased in importance with age.

Consistent with the results from the employee survey, research suggests that young people are more interested in jobs that have flexibility, and opportunities for impact, as well as for skills development and personal growth.¹⁷ If agencies are to attract and retain young employees they will have to invest in their skills development and provide them with job opportunities that challenge them.

Of the attributes in common, older workers were more satisfied than both young and mature-aged employees with good working relationships, but had the same satisfaction level for flexible working arrangements. Young employees were also slightly less satisfied with good working relationships and salary than the APS overall.

15 G. Ruiz, ‘Age Wave: Adapting to Older Workers’, Workforce Management, 27 March, 2006, pp. 32–6, <http://www.workforce.com.au>

16 The separation rate is calculated as the proportion of employees separating at a particular age during the year, divided by the average number of employees at that age at the beginning and end of the financial year. The separation rate for those aged 64 and over in 1997–98 was inflated due to compulsory age 65 retirements at that time. This meant that the number of separations was artificially high, and the number of employees at the beginning and end of the financial year (used in calculating the separation rate) was lower than is the case now. The number of voluntary redundancies, particularly for older employees, was also much higher that year.

17 Z. Patton, ‘The Young and the Restless’, Governing’s, September 2007, <http://www.governing.com>