New Zealand harnessing economic power of older workers
PwC has released its Golden Age Index this week which rates success of countries in harnessing the economic power of older workers. It compares employment of older workers across 34 OECD countries with countries able to add billions of dollars to a country’s coffers if they follow best practice in harnessing the potential of their older workers.
The Golden Age Index is a weighted average of indicators – including employment, earnings and training - that reflect the labour market impact of workers aged over 55 in 34 Organisation for Economic Co-operation and Development (OECD) countries.
PwC Partner and business adviser Scott Mitchell says, “From our Golden Age Index, we can say New Zealand is leading the way, along with Iceland, Israel and countries in Scandanavia, in harnessing the economic power of older workers. This is increasingly important for the New Zealand economy to boost growth and support organisations in sourcing talent.”
PwC Golden Age Index – key results:
“Dynamics will change within the next five years as older workers consider their financial choices and businesses should be thinking about how they can utilise the experience and skills of this generation. Increased flexibility, job redesign, career breaks and role shifts could help engage older workers to keep them in the workforce for longer.
“More should be done to focus on how we can drive innovation and productivity by harnessing the diversity that results from having a broader range of generations working together,” says Mr Mitchell.
There are several opportunities and challenges posed by the Golden Age Index for businesses:
· Businesses making better use of the skills and experience of older workers can gain a competitive advantage at a time when the average age of customers is rising.
· Employers may need to rethink their attitudes to training for older workers, so this does not ‘stop at 50’.
· An ageing workforce may demand different approaches to reward in terms of the balance between salary, pensions and healthcare benefits.
· Companies would benefit from doing a comprehensive audit of their age profile that covers recruitment, retention, training, reward and performance.
About the Survey
Methodology: The PwC Golden Age Index combines national performance on the following labour market indicators (with relative weights shown in brackets): Employment rate 55-64 (40%), Employment rate 65-69 (20%), Gender gap in employment, 55-64: ratio men/women (10%), Incidence of part-time work 55-64 (10%), Full time earnings 55-64 relative to 25-54 (10%), Effective average exit age from labour force (5%), Participation in training 55-64 (5%)
These indicators are normalised, weighted and aggregated to generate index scores for each country. The index scores are on a scale from 0 to 100, with the average value in the base year of 2003 set to 50. However, the average index values for 2007 and 2013 can be higher or lower than this 2003 baseline. All data are taken from the OECD. We focus mostly on the 55-64 age group as this is the only one where standardised data are available for a broad range of OECD countries.
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