by Tim Lohman

Australia to hit “peak labour” in 2011

Sep 03, 2010
CareersFinancial Services Industry

Managing organisational risks related to changing demographics, particularly around aging, will soon become a major focus of management, according to social researcher and futurist, Mark McCrindle.

Speaking at the recent Security 2010 Conference in Sydney, McCrindle said that similar to the concept of peak oil – the point where the maximum rate of petroleum extraction is reached ­– Australian industry was facing the point where the maximum number of labour could be extracted.

“Next year in Australia marks the point of peak labour… from 2011 there will be more people exiting full time roles than there will be entering fulltime roles,” he said.

“It’s not so much peak labour, but peak easy labour. We have to work harder from now on to really sell the industry to the next generation, to train them, retain them and create raving fans who can encourage other successful and competent young people to join.”

Compounding this problem was the emerging pattern of job tenure, particularly among Generation Y (Gen-Y) employees, who were eager to jump between roles in a bid to gain rapid career expansion, often at the expense of experience and training, McCrindle said.

“Your average Gen-Yer stays an average of two years in a job in Australia today – that doesn’t build the experience and doesn’t bring the skills required for the leadership of the future,” he said.

In contrast the current national normative tenure per employer was four years. In turn this contrasted to some 12 years per employer back in 1970.

“That churn rate just won’t do if we are trying to build up the leadership, the knowledge and experience…” McCrindle said.

At the top end of the skills market, the trickle of Baby Boomer staff now beginning to retire would within 10 years turn into a flood.

“One third of today’s senior leaders, business owners and senior managers across industry in Australia today will be of retirement age within a decade,” McCrindle said.

“If you have a third of your leaders walk out the door in a ten year time window that is a massive loss of knowledge. That means training, leadership succession, transitioning and ensuring that that next generation can be attracted and retained.

To address this organisations should look to create roles for older staff to encourage them to stay in the workforce well beyond retirement age, McCrindle said.