For decades, baby boomers have outnumbered other generations in the workforce, with many rising through the ranks to take on senior positions in business. Today, these workers are getting older, making the maturing workforce a topic of interest among business leaders.
For many successful businesses, investing in retention strategies for older employees makes sense given the skills, knowledge and experience these workers bring to the table.
And that’s certainly been the experience of the FMP Group Australia, which has adopted a range of strategies to bring out the best in their maturing workforce (Hint: it took a cultural transformation to get them there).
Cultural transformation at work
For FMP, what began with a relatively narrow focus on reducing WorkCover claims, has taken them through a transformation in corporate culture, and towards a far more flexible approach in accommodating the needs of older workers.
At the core of the transformation is the use of Transition to Retirement (TTR), now written into the company’s latest Enterprise Bargaining Agreement. Designed to give workers who’ve reached their preservation age (usually 56 and above) the option to use a portion of their super, TTR provides the choice to either save more or work less without changing take home pay.
Getting to this point involved a twin focus: persuading the management team to allow more flexible working arrangements, and giving older employees access to information and support to help them shape their own transition to retirement.
The path to a more flexible workplace
FMP has been manufacturing brake pads and other brake components in Ballarat since 1955, and (as Bendix Mintex) was once the city’s biggest employer.
In such a challenging period for the entire automotive industry, FMP readily acknowledges the know-how of their workforce is a significant competitive advantage that has helped the local operation survive.
But this hasn’t always been the case. Eight years ago, the mature average age of the FMP workforce was thought to be responsible for a series of rises in WorkCover premiums.
What followed was an age-based analysis of workforce metrics before any action was taken. Surprisingly, the results showed it wasn’t necessarily the older workers making the claims. In fact, they were less likely to claim than people in mid-career – largely because they were too concerned about job security to reveal any underlying health problems. This concern was underpinned by anxiety about being unhappy in retirement because of financial insecurity or having ‘nothing to do’ in retirement.
Many of these issues were the knock-on effects of a relatively inflexible commitment to ‘the way things were always done’ and limited awareness of what was possible with a more flexible mindset.
It’s an approach that’s really paid off for FMP. They’ve found that a TTR-friendly culture has encouraged openness about financial and health issues, reduced injuries, improved morale and extended careers.
It’s an impressive list of benefits, but it’s the emotional ones that most hit home, according to the lead initiator, Susan Honeyman, FMP’s HR Manager. “We’re giving people who’ve been working for us for decades a more dignified exit from the workforce – one that’s more on their own terms.”
“That’s something everyone in the company can be proud of.”
The positive impact of good advice
Part of the solution implemented by FMP was a series of retirement planning workshops Susan arranged with AustralianSuper. The workshops covered a range of topics and allowed employees to make follow-up appointments for personal advice.
“Finance was one area where people really needed help,” says Susan. “There were no questions in the first year because people didn’t know what to expect, but now they come along with really good questions already written down.”
Shona Kelsey from the education team at AustralianSuper says when they first started running workshops they were overwhelmed by the level of interest – especially in TTR. “People are mostly looking for ways to grow their super, but they’re not confident to enter into it without some support.”
“Hearing information first-hand provides both immediate reassurance for the employees and validation for the AustralianSuper team: “The vibe in the room is just that there’s a weight off people’s shoulders, which is very satisfying.”
MORE INFORMATION ABOUT TTR
You and your employees will find information on TTR(including videos) at australiansuper.com/TTR
Statements made by representatives of FMP Group (Australia) Pty Ltd have been reproduced with their continuing consent.