Whilst youth unemployment has risen to record levels in recent times, the level of unemployment for workers over 50 years old has also steadily increased. And it is about to get worse in the next 2-3 years as several large automotive manufacturers close shop. There will be a flow on effect for smaller manufacturers who supply parts to the car industry as well. Many of these workers have spent their entire working life in one company or one industry and there are very few jobs being created in this country that require the limited skills of these people. So is this a crisis or an opportunity for the country to take a good hard look at itself, its policies and the future of work?
We are “glass half full” people so we are going to take the approach that it is an opportunity but it will require us to think differently about just who is suited to what job. It may also require us to rethink the typical working week in terms of hours, to rethink the concept of job sharing and put some science to the selection process. Employers may also be surprised at how profitable it is to employ older workers. We have seen a trend to employing mature age workers by companies like Bunnings but the fact is that people in these age brackets are becoming unemployed faster than employers are hiring them. This is despite all the desirable attributes of older workers such as:
· Reliability (On time and few sick days)
· Communication skills
· Efficiency and productivity
· Prompt and polite
· Life experience
· Coping skills
· Flexibility
· Unlikely to consider the job as a “stepping stone”
So, with these attributes, mature aged workers are more suited to jobs that have a larger customer service component. That is why Bunnings have taken their stance and provided opportunities to mature aged workers. We have also seen instances of supermarkets and fast food chains take on older workersOddly enough, many of these types of jobs are earmarked for younger people. The jobs we are talking about are in hospitality, fast food stores, convenience stores, retail shops, call centres and the like yet employers are far more likely to plump for the minor savings in gross wages rather than consider the impact on their bottom line. Can we quantify the costs? You bet we can. The example we will use is that of a retail fashion store, many of which hire younger workers as a rule. The difference in base wages (a Level 1 lowest experience) is quite substantial, $721.50 for the older worker versus $432.90 for a 17 year old. Over the course of a year, that equates to $15,007 so it is easy to see why retailers would make that decision in the first place. But is it a sound business decision for this type of operation? It depends on a number of things but, before making the decision, the shopkeeper would be wise to ask the following questions:
· Can I rely on the worker to be on time every day?
· Can I rely on the person to have minimal sick days?
· Can I leave the worker unattended or unsupervised?
· How much time will it take to train this worker?
· Can I rely on the worker to stay in the job?
· Can the worker close sales?
· Can the worker relate to the customers (by that, we refer to the decision maker in the sale NOT necessarily the end user)?
· Will the worker bring repeat business?
· Will the worker be conscientious and report slow moving or fast moving stock?
Let’s see how you could quickly burn $15,000 in a retail business. For the purpose of the exercise, we will look at a genuine example of a store in Southland, Victoria. The proprietor was looking for a young person when I approached him with a female candidate 54 years old. Asking the right questions led the employer to offer her a trial because:
· He had hired 3 other juniors in the preceding 12 months, all of who had left. The result was 5 weeks without an assistant and at least another 2 weeks recruiting and training them.
· The three juniors had missed a further 5 days in sick leave and several other hours arriving late.
· Whilst the end users of his products were young females, the buyers were their mothers.
· He did not trust the juniors to open or close the store, or to be left unsupervised.
· In quiet times, the juniors needed to be told what to do and showed no initiative, especially when it came to stock monitoring.
The end result is that this store owner made an additional $32,000 profit in the first year after hiring this worker. Much of that was due to her ability to close sales, retain customers, increase business because of word-of-mouth and not least because she did mini stock-takes every week so that slow selling items could be heavily discounted to make way for faster moving items. This has a dramatic effect on both cash flow and profitability in the retail sector. The huge increase in profitability meant that the owner could promote her to manager of the store whilst he established another shop at Chadstone.
Don’t get us wrong, we are not saying that all mature age workers are great or that all young workers are slack, not by a long shot. What we are saying is that business owners should consider all factors and analyse what is important to their business before making a knee-jerk decision based on raw cost. You may be pleasantly surprised.
We are “glass half full” people so we are going to take the approach that it is an opportunity but it will require us to think differently about just who is suited to what job. It may also require us to rethink the typical working week in terms of hours, to rethink the concept of job sharing and put some science to the selection process. Employers may also be surprised at how profitable it is to employ older workers. We have seen a trend to employing mature age workers by companies like Bunnings but the fact is that people in these age brackets are becoming unemployed faster than employers are hiring them. This is despite all the desirable attributes of older workers such as:
· Reliability (On time and few sick days)
· Communication skills
· Efficiency and productivity
· Prompt and polite
· Life experience
· Coping skills
· Flexibility
· Unlikely to consider the job as a “stepping stone”
So, with these attributes, mature aged workers are more suited to jobs that have a larger customer service component. That is why Bunnings have taken their stance and provided opportunities to mature aged workers. We have also seen instances of supermarkets and fast food chains take on older workersOddly enough, many of these types of jobs are earmarked for younger people. The jobs we are talking about are in hospitality, fast food stores, convenience stores, retail shops, call centres and the like yet employers are far more likely to plump for the minor savings in gross wages rather than consider the impact on their bottom line. Can we quantify the costs? You bet we can. The example we will use is that of a retail fashion store, many of which hire younger workers as a rule. The difference in base wages (a Level 1 lowest experience) is quite substantial, $721.50 for the older worker versus $432.90 for a 17 year old. Over the course of a year, that equates to $15,007 so it is easy to see why retailers would make that decision in the first place. But is it a sound business decision for this type of operation? It depends on a number of things but, before making the decision, the shopkeeper would be wise to ask the following questions:
· Can I rely on the worker to be on time every day?
· Can I rely on the person to have minimal sick days?
· Can I leave the worker unattended or unsupervised?
· How much time will it take to train this worker?
· Can I rely on the worker to stay in the job?
· Can the worker close sales?
· Can the worker relate to the customers (by that, we refer to the decision maker in the sale NOT necessarily the end user)?
· Will the worker bring repeat business?
· Will the worker be conscientious and report slow moving or fast moving stock?
Let’s see how you could quickly burn $15,000 in a retail business. For the purpose of the exercise, we will look at a genuine example of a store in Southland, Victoria. The proprietor was looking for a young person when I approached him with a female candidate 54 years old. Asking the right questions led the employer to offer her a trial because:
· He had hired 3 other juniors in the preceding 12 months, all of who had left. The result was 5 weeks without an assistant and at least another 2 weeks recruiting and training them.
· The three juniors had missed a further 5 days in sick leave and several other hours arriving late.
· Whilst the end users of his products were young females, the buyers were their mothers.
· He did not trust the juniors to open or close the store, or to be left unsupervised.
· In quiet times, the juniors needed to be told what to do and showed no initiative, especially when it came to stock monitoring.
The end result is that this store owner made an additional $32,000 profit in the first year after hiring this worker. Much of that was due to her ability to close sales, retain customers, increase business because of word-of-mouth and not least because she did mini stock-takes every week so that slow selling items could be heavily discounted to make way for faster moving items. This has a dramatic effect on both cash flow and profitability in the retail sector. The huge increase in profitability meant that the owner could promote her to manager of the store whilst he established another shop at Chadstone.
Don’t get us wrong, we are not saying that all mature age workers are great or that all young workers are slack, not by a long shot. What we are saying is that business owners should consider all factors and analyse what is important to their business before making a knee-jerk decision based on raw cost. You may be pleasantly surprised.
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