The population debate - Recruitment - Australia faces problem of aging population - Brief Article

Business Asia, April, 2002 by Cliff Stoneman

RECENTLY IN MELBOURNE, Australia, a national summit was held to help shape Australian population targets for the next 50 years.

Why? Because Australia's population is not growing at the rate required to maintain a healthy economic climate, and without policy change it will begin to decline in about 25 years.

The country is also facing the major problem of an ageing and retiring population. This places further pressures on government in terms of superannuation policies, altering the labour market and raising retirement ages. A large proportion of Australia's youth and highly skilled individuals are being sought and are increasingly heading overseas to utilise their skills and further develop themselves in offshore companies that are offering more lucrative packages.

Recently published statistics should be ringing alarm bells for Australian businesses. This emerging issue must be acknowledged and preparation must begin now to prevent detrimental effects in the future. A strategic approach to the issue must be adopted. For example, by 2050 Australia's population is predicted to reach around 25 million, based on current projections. In my opinion this figure is critically low. Recent figures also report that by this time the average age of Australians will be 46 years and 2.8 million will be aged 80+.

Businesses are well progressed when it comes to competing for market share, customers or building a marketing profile. However, competing to attract and retain the people you require to obtain these goals hasn't even touched on the radar screens of many businesses. This proves to be a major issue because human resource advisors or managers have been aware of this creeping crisis for many years, yet nothing has been implemented to manage it for the future.

When it comes to people power, Australia's neighbours are in a situation where they can take advantage of other's failures. Even countries with large populations such as China recognise that people figures are one thing and a country's skill mix is another. China is presently embracing the issue by aggressively training and developing their own human capital and targeting the knowledge and skill resources they need today through business immigration and work visa programs.

For years, Australian companies have headed to the Asian region for the manufacturing and assembly of products due to the more attractive cost structure. Very soon this will alter, with businesses primarily being attracted to these countries for its complete infrastructure, offering a total business solution that includes a strong pool and combination of appropriately skilled human resources.

The Australian labour market is facing major skill shortages in the future, and the negative outcomes they will have on businesses will be major. How much will it impact your business if you can't find, recruit and retain the people with the specific skills you require to achieve your objectives?

Companies can gain an advantage over their local and global competitors by being prepared and strategically planning for the inevitable. They need to effectively manage their present employees, conduct regular and adequate training and development programs, and uncompromisingly adapt new and efficient methods of attracting the high calibre of young people who are presently leaving our shores in droves to excel in overseas markets.

Cliff Stoneman is the managing director of eoc Consulting Asia Pacific.