Gallagher explores risk management strategies for Australia’s ageing workforce
Gallagher explores risk management strategies for Australia’s ageing workforce | Insurance Business Australia
Professionals Risks
Gallagher explores risk management strategies for Australia’s ageing workforce
Brokerage giant identifies factors leading to older workforce
Professionals Risks
By
Roxanne Libatique
With Australia’s workforce ageing, Gallagher advises businesses to assess how this shift impacts their risk profiles and find ways to mitigate potential exposures.
Over the next decade, Australia’s population is projected to become older and smaller than pre-pandemic predictions. By June 30, 2033, the population is expected to reach 29.9 million, reflecting a growth rate of about 1.2%, which is slower than before the pandemic. A smaller young workforce may present economic challenges, but the older demographic could provide a solution.
Factors leading to Australia’s older workforce
In Australia, more people are working into older ages. The participation rate for those over 60 more than doubled in the 20 years up to April 2021. For men over 60, it nearly doubled from 10% to 19%. While for women, it almost quadrupled from 3% to 11%.
greater flexibility in knowledge-intensive roles
tighter labour markets
better health and education
larger mortgages
later family formation
a casualised workforce
the rise of technology enabling remote work
Business risks 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 necessary to address age-related vulnerabilities. Duty of care obligations may increase, requiring adjustments in safety training, job assignments, and manual task designs.
Gallagher said clear health and safety policies are crucial to prevent regulatory and civil litigation.
“For example, if an employee working in a noisy environment makes a claim for noise-induced hearing loss, the employer would need to have sufficient evidence to make a case that the hearing loss was age related and not a direct result of workplace conditions,” it said.
Supporting the physical and mental wellbeing of all employees is essential, particularly with a wider age range in the workforce.
Age discrimination considerations
Australia does not have a compulsory retirement age, making it illegal to force retirement based on age.
Gallagher said employers must navigate the line between realistic business needs and potential legal actions.
“For example, if a 75-year-old wants to remain in a client-facing role and is responsible for selling products and services to individuals who are much younger, there is potential for a cultural disconnect. An employer may feel they risk losing business if they do not move a younger person into that role, but it could expose the business to a discrimination claim. Any necessary change must be negotiated carefully,” it said.
The ageing workforce can also affect mergers and acquisitions. Under the Fair Work Act’s transfer of business provisions, buyers inherit the seller’s collective agreements when an employee’s employment is terminated, they start new employment with the buyer, or if the work remains the same.
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