Giving older workers a second chance

Many of those facing redundancy in the current round of industry restructurings are the over-45s, who find it more difficult to find new jobs. How can we help them get back to work?

For over 80 years, Newcastle was known as a steel city. The BHP steelworks was the region’s biggest employer, with a 13,000-strong workforce at its peak.

By the late 80s the plant was losing money and in 1999 it closed altogether, resulting in job losses for all 1,800 employees and a further 1,000 contractors. With the average worker being 44 years old and having spent 21 years at the plant, finding a new job would have been challenging.

However a co-ordinated program by BHP, the unions and the government in the two years prior to the closure helped workers to adapt and retrain, with many going on to build new careers.

The BHP experience is highly relevant today, with Australia in the midst of a new round of industry restructuring and mass redundancies. According to Professor Victor Callan, a skills expert at UQ Business School, we need to understand how best to help these workers make the transition into new industries – particularly the older, less skilled employees who may otherwise end up unemployed or retiring by default.

Almost 4,000 jobs were lost in the Hunter Valley region in 2014 and, while the official unemployment rate was 9.1 per cent in January 2015, the true figure may be as high as 16 per cent when taking account of the ‘hidden workforce’ – those who have given up looking.

In Geelong in Victoria, evidence suggests that over 1 in 10 of all jobs in the region has been lost or is scheduled to go. Meanwhile in South Australia the closure of GM Holden in 2017 will result in almost 15,000 job losses and the potential loss of $1.2 billion in revenue.

Professor Callan says a disproportionate amount of such job losses are in manufacturing, where there is also a high proportion of mature workers. “Forty-two per cent of manufacturing workers are 45 years or older, and of these 36 per cent do not hold post-school qualifications. They also have low language, literacy and numeracy skills,” he explains.

“These older workers, especially those in lower skilled jobs, face greater challenges in finding a new job. As conditions for manufacturing become tougher each year, it is clear than many will have to look outside the industry. We need to put in place effective skills transfer, reskilling and training strategies to help them make the transition.”

A key element of BHP’s success was its Pathways Program which allowed employees to train in almost any area if it was likely to help them find work. Each employee was interviewed about his or her aspirations and BHP would cover whatever was required, including university or course fees, textbooks and flexible working to allow time for study.

Meanwhile the Hunter TAFE laid on taster courses to provide an introduction to different careers. Many staff went on to work in the mines or the power plants, others moved into fields ranging from nursing and teaching to flying and public relations.

Professor Callan says: “Career transition services make good commercial sense as they allow departing employees to leave with dignity and quickly resume their career with another employer.

“However research shows it is imperative that these programs are structured in a logical fashion – first assessing the worker’s capabilities, one-on-one discussions about their career aspirations and then planning targeted training.

“Older workers are generally focussed on finding a new job as soon as possible, but they can lack knowledge of the wider labour market so need to be informed about their options, and can slip into unemployment if not assisted with their job search.”

Support services should not ignore the psychological impact of losing a long-term job – an experience which one worker compared to ‘falling off a cliff’.

Partnerships between businesses and different support agencies in an area are crucial to putting an effective strategy in place and connecting all the different services, such as unemployment benefits, career counselling, training and job search.

Training programs should take account of the specific needs of older workers. Professor Callan adds: “Displaced older workers are discriminating about what new learning they will undertake. They will not tolerate inappropriate or seemingly irrelevant content in re-training programs.

“Training should be modified to acknowledge their life and work experiences. It’s good to involve them in the design and development of the course, and allow them to learn among their own age group, at their own pace. Training programs should be planned in a way that saves them time and money and recognise their prior learning.”

Mature workers may have different motivations than younger staff, says Professor Callan. “Whereas younger workers may undergo training to advance their career, older workers may appreciate more the sense of empowerment it brings.

“In many cases personal factors also influence their decisions on what new job to focus on and often they settle for a lower status job compared to their previous role.”

Career support should continue after training has ended as older workers’ success can by influenced by a wide range of factors, not just having the right skills for the job.

According to Professor Callan, failure to address the plight of displaced older workers could be costly, not just for the individuals concerned but also the country’s economy.

“An average duration of long-term unemployment can cost between $50,000 and $150,000 depending on the worker’s age, salary level and circumstances,” he says. “In addition, the loss of all these experienced people from the workforce will have an impact on productivity. There is a lot at stake here if we don’t get this right.”

Last updated:
25 March 2019