The government has released the 2023 Intergenerational Report, which paints a picture of what Australia might look like in 40 years’ time. A range of workplace experts share their thoughts on how employers should respond.

You’d be forgiven for feeling that the Government’s latest Intergenerational Report was filled with doom and gloom. An ageing population, climate-related challenges, our aged-care and disability needs outpacing the resources available today by double and further complications in the geopolitical space – it feels like the synopsis of a dystopian novel.

But these are just predictions based on current trends. 

“While [these predictions] can be cause for concern, the very nature of the report should give us hope. It gives us a 40-year outlook as to what the future might look like if we follow the same pattern as today. We’ve given ourselves plenty of time to fix it,” says Dr Ben Hamer CPHR, AHRI board member and Chief Futurist at CreativeCubes.Co.

It’s worth considering reports like this with healthy scepticism, as some people perceive it as a vehicle to push the agenda of the current government or that the numbers aren’t as scary as some might have you think.

Despite this, the Treasury’s Intergenerational Report, the sixth released since 2002, still holds some interesting predictions for the future of our workplaces, which are worth attention and conversation.

Here are five predictions from the report paired with insights from a range of HR experts.

1. Ageing population

Prediction: Australians are expected to live longer and spend more years in full health. Despite the report showing a three per cent decline in working age, this could mean some employees are working later into life.

“[The ageing workforce] should form a key component of any future-of-work strategy, with HR framing the discussion around the risks and opportunities of demographic change,” says Alison Hernandez,  JPAC Lead at HSM Advisory and Ambassador for Family Friendly Workplaces.

Some of the business risks, according to Hernandez, are:

• Loss of legacy skills and expertise as subject matter experts retire
• Inadequate succession planning and knowledge transfer
• Inability to backfill critical roles
• Potential increase in WH&S costs.

We have a great opportunity right now to redesign work through the lens of a longer working life, she says. Based on conversations with thousands of late-career professionals over the past 20 years, she says these changes could look like:

• Flexible career pathways enabling employees to work longer, but differently
• Internal mobility and relocations across Australia or overseas, so people can “embrace their inner grey nomad”
• Continuous learning, development and reskilling in digital literacy
• Mentoring and multi-generational knowledge sharing
• Career breaks for care giving, travel or as a wellbeing reset.

Read more on Hernandez’s thoughts on redesigning work here.

“The key to success is understanding what employees want and need, now and into the future, and letting go of traditional employment structures that no longer serve us well,” she says. “HR leaders are grappling with the next 40 hours and 40 days, let alone the next 40 years, but it is so important to keep an eye on the horizon and reimagine the future of work.”

“By the time we hit 40 million people in Australia, we’ll proportionally have two times as many people aged over 65 and three times as many people 85+ [as we do today].” – Dr Ben Hamer CPHR

2. Productivity rates 

Prediction: Productivity rates are predicted to be in line with average growth rates of the past two decades, at 1.2 per cent a year. The future path of productivity is not a foregone conclusion, and will be influenced by decisions taken by governments, businesses and investors, as well as the big shifts underway in the global and domestic economy.

The report paints a picture of the “lowest levels of productivity since World War II,” says Hamer.

The biggest driver of reduced productivity will be the ageing population, he says, which will be driven by lower birth rates and improved healthcare, which will see Australians living longer, as outlined above.

“By the time we hit 40 million people in Australia, we’ll proportionally have two times as many people aged over 65 and three times as many people 85+ [as we do today].”

“This becomes tricky because we’ll have less working-age people to pay taxes to fund critical areas such as health, education, defence and infrastructure.”

HR professionals will be critical in supporting a productivity uplift, he says.

“A lot of this uplift will come from engaging and retaining older workers. In the past, I’ve seen organisations put an ageing workforce as a risk in their strategic workforce plans. Instead, we need to look at it as the norm and, in many ways, an opportunity.”

He cites a UK study on McDonald’s workers, which found that employees over the age of 60 were responsible for a 20 per cent higher customer satisfaction rate.

“McDonalds went out looking to actively recruit older workers. It’s this kind of mindset that we’ll need to see more of, as well as the creation of new job roles that better cater to the skills, expertise, expectations and life stage of this important cohort.”

Hamer adds that organisations should also continue to invest in new technology and reskill their workers to boost productivity rates.

AHRI’s most recent Quarterly Work Outlook highlighted the importance of Hamer’s points, with respondents reporting that one in five employees are currently not proficient in their roles, and only 20 per cent stating they were investing in AI/technology to boost productivity.

AHRI’s CEO, Sarah McCann-Bartlett, said at the time, “Australia’s productivity is falling short of many of our OECD competitors… Australia’s future prosperity will be built upon a skilled workforce that helps our nation to remain globally competitive.

“Now is the time to invest in workplace training and the broader set of HR practices that boost organisational performance.”

3. Climate change impacts

Prediction: Climate change will have profound impacts on the economy and society. It will affect where and how Australians choose to live and work, food and energy security and our environment.

Jonathon Woolfrey FCPHR, AHRI board member and West Australian State President and Managing Partner of Talenting, says that, although the 40-year horizon set out by the report seems distant, there are some immediate actions that employers need to consider.

“With regard to its statements about climate change, which can be overshadowed by politically-charged debate, employers should focus on pragmatic workplace responses to manage external risks.

“One of the most immediate impacts is on the psychological contract,” he says. “Modern employees expect their employers to be environmentally responsible. This expectation isn’t a distant concern; it’s a current necessity that should be communicated through the employee value proposition and internal engagement tools.”

Those working in outdoor settings, such as tradespeople, miners and first responders, will need special consideration, he adds.

“Employers must address both their physical and psychological safety, and consider strategies such as job redesign and psychosocial risk assessments and actions.”

“Now is the time to invest in workplace training and the broader set of HR practices that boost organisational performance.” – Sarah McCann-Bartlett, AHRI CEO

This might look like changing shift times to be outside of peak heat periods or shortening work hours to minimise exposure.

“In the medium-term, sectors such as retail and hospitality may also be affected. For example, retail workers could bear the brunt of supply chain disruption, while changes in tourism and lifestyle preferences stemming from changing climate could impact the nature and locations of hospitality jobs.”

To prepare, Woolfrey suggests employers:

• Define and communicate their environmental commitments
• Assess and address risks related to climate change for different occupational groups
• Evaluate the psychosocial risk elements across their workforce.

4. Digitisation of work

Prediction: Digitalisation will change how we work, raising productivity, improving workplace safety and providing us with the agility we need to face the challenges of the future.

Timothy Bartram, Professor of HR Analytics and Head of Department HRM & Industrial Relations at RMIT, says digitisation and AI present both opportunities and challenges for HR.

“Such technology is in its infancy in HR management, [but] there is an expectation of the growing use of AI in HRM in the future,” he says.

“However, most HR departments are generally not aware of how to implement and use such technological tools. Organisations and HR professionals need to invest in greater education and skill development around HR analytics and AI. 

“This represents an important opportunity for universities and other education providers to develop programs that engage with HR analytics, AI and HRM with the emphasis on ethical governance, the engagement of key organisational stakeholders and the consequences for human beings.”

Dr Gerry Treuren, senior lecturer in UniSA’s School of Management, says employers will face challenges in “systematising new work processes to capture the efficiency gains”, and says internal and external training will be important.

“Some skills will become irrelevant and disappear via attrition or by management design, but new skills will be added to existing roles as needed, and as new roles are created. Over time, many more jobs end up getting created.

“[It] will be a turbocharged and larger-scale version of the office automation of the 1970s. Yes, typists lost their jobs, but whole new types of more interesting, high-skill, career-path jobs then emerged.” 

5. Gender pay gap

Prediction: Australia’s gender gap is expected to narrow as further labour market opportunities increase and contribute to a more inclusive workforce.

This was a sliver of good news to come out of the government’s predictions. In order to work towards eliminating that gap entirely, employers need to lay the groundwork for gender-inclusive workplaces now.

“If HR want to prepare workplaces for the future where gender inclusivity is not a nice-to-have, but a necessity, they may want to consider a few different things,” says Renee Alexander, AHRI Northern Territory State President and Group HR Manager at Primary Resources Investment Group.

She suggests assessing your policies and processes to see if they are skewed towards one gender.“Parental leave is a good example. There may be medical reasons why the birth-giver requires a period of leave. However, this does not necessarily mean that they will be the primary caregiver. Do your policies have flexibility in this space?”

Employers can conduct a benchmarking assessment to see how family friendly their organisation is with this free tool from Family Friendly Workplaces.

Read HRM’s article: 37 per cent of men face “discrimination and harassment” for working reduced hours.

She also says it’s worth auditing processes to see if any are “stuck in the 80s” and thinking about how/if you should set gender targets, noting that there are many arguments for and against this.

“At the end of the day, the best advice I can give HR is to meet your organisation where they are at. Incremental change in the right direction is better than no action at all.”

Learn how to incorporate business strategy into your workforce planning and mitigate future risk with this short course from AHRI.