In Conversation With Peter Mills, HRD Sydney Water

In Conversation with

Peter Mills General Manager HR

Sydney Water

“Challenges faced by an aging workforce”

April 2011

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Peter Mills, Sydney Water April 2011

Introduction

Welcome to the latest in the, “In Conversation with” series of White Papers. Firstly we would

like to introduce and thank our guest speaker Peter Mills from Sydney Water.

Peter Mills has over 25 years experience in Human Resources in a range of industries

including engineering, manufacturing, investment, business equipment/IT and petroleum. He

has held senior HR roles for such organisations Canon Australia, Warman International,

Caltex Australia and Mitsui Co. For the last 6 years Peter, has been working for Sydney

Water Corporation. As the General Manager Human Resources, Peter has lead a team that

has been strategically focused on resolving issues on managing today‟s workforce. This has

resulted in Sydney Water winning many awards including:

2008 Women in Leadership (winner) - Diversity@Work Awards

Work life balance (winner) - Diversity@Work Awards

Graduate intake Program (winner) HR Leadership Awards

2009 Best Change Management strategy (winner) - HR Leadership Awards

2010 Entry Level Program (2nd Runner up) - International Water Association - Professional

Development Award

Best HR Strategic Plan - HR Leadership Awards

Best Talent Management Strategy - HR Leadership Awards

Best Employment Branding Strategy - HR Leadership Awards

Employer of Choice (over 1000 staff) - HR Leadership Awards

Best Recruitment and Retention Strategy (Highly Commended) - HR Leadership Awards

Trainee of the Year (Rachael Cowan) - Group Training Awards NSW

Setting the scene

The topic of the ageing workforce and the wider challenges we face in Australia and globally

from the changing demographics and behaviours caused by this is well documented and as

our conversation flowed clearly was viewed as of importance to all business leaders.

Why is it so difficult to manage the challenge presented to us by an ageing population and in

turn the impact on our workforce?

Should we not be asking the question when; it is hard to figure out as retirement age is not

predictable regardless of the statutory guidelines.

At Sydney Water 25% leave at the official retirement age (65) and 47% don‟t know when

they are going to retire. You may think this is a good problem to have but it creates

uncertainty and makes it extremely difficult in regard to workforce planning and the risks

associated, especially with critical roles, in having improper succession planning in place.

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Why are people working longer?

There are some common reasons for people working longer and they are well documented,

below are some examples.

The average age at which women are starting a family is now 30 years old and even

going beyond that in the working environment which in itself changes the dynamics

considerably.

As more and more students move on to further education and the associated tuition fees

– parents can‟t afford not to work and need/choose to support their children.

Consequently children are leaving home at a much older age now and in relative terms

are more dependent on their parents financially than ever.

Carer responsibilities for older parents - adult children are caring for their elderly parents

which is now impacting their decision to retire at an „early‟ age, this is a double edged

sword; on the one hand people may retire early to spend time with their aging parents

and on the other they are being forced to work longer to pay for parents facilities and

caring.

Health issues are becoming more apparent and people are working longer to support

their partner / families

Inadequate retirement savings means that people are working longer as they have to

from a financial stability perspective.

The skills shortage

Labour Shortages mean it is hard to predict the workforce in the future and that there is the

opportunity to draw upon the ageing workforce to fill some of the supply gap.

Alternatively the idea of a job for life has changed dramatically over recent years. Peter Mills

“remembers thinking 20 years ago are there going to be jobs for our children in the future”,

this creates additional pressure for people to work longer as they may need to support their

children for longer.

The above is compounded by the emergence of Gen Y and Gen X groups who have a very

different mindset in relation to work and more recently in relation to money and corporate

behaviour post GFC.

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The health impact of the ageing workforce

Catherine Cahill talking in relation to her role and observations from The Cancer Council

gave us an additional view of the challenges faced by an ageing workforce:

Health issues are problematic for example, 1 in 2 people in Australia are diagnosed with

cancer of some kind. We need to start thinking about long term illness leave for our

workforce not just parental leave. This is a much bigger issue that the government needs to

address. There needs to be more flexibility in the workforce.

The impact of significant health issues in the workplace is dramatic as the timing is

impossible to diagnose, severe illness could affect people at any time and although this is

not specific to the ageing workforce it is more prevalent with age. It is also common that as

we age our prioritisation of what is important to us changes and should a family member

become critically ill it is more likely that people will step away from work to treat family as a

priority.

Staff turnover and how this affects the ageing workforce

At Sydney Water 30% of the employees have been with the organisation less than 5 years

12 % less than 10 years

so 58% more than 10 years

Peter explained that there is a lower turnover rate in the utilities sector, in part due to the

nature of the work and also due to excellent pension schemes that are in place.

At Sydney Water the impact of the ageing workforce is a real issue and particularly in regard

to critical roles – Water Engineers and Civil Engineers, these are high risk and when they

leave the workforce there is a real issue around replacing them with the same quality and

experience.

In a lot of companies the staff perception of Length of Service is that “everyone has been

here forever”. In Sydney Water‟s case nearly 30% of employees have been there for less

than 5 years.

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Workforce audit – Where to stat and what to measure?

As with most strategic problems presented to organisations the first port of call is to

understand your base line metrics and statistics and look at risk and impact so you can then

start to create solutions. This is no different in regard to the impact of the ageing workforce.

Identify your issues – segment the workforce, identify critical positions etc

Resourcing strategy –it is important to build in the effects of the ageing workforce to your

overall resourcing strategy and risk profile

Look to innovative programs, for example at Sydney Water their Graduate Scheme has a

97% success rate in retaining graduates beyond their initial stations

Fit for work issues – sometimes it is not just about the base line metrics but about the

environment people working and the pressures of work, physical, mental and emotional.

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Employee Value proposition and branding

The emergence of the EVP has been gaining increasing speed and attention, this is an

excellent way to address the challenge of the ageing workforce and be proactive to

responding to that segment of your workforce.

An extension of the EVP is regular communication and internal advertising; Marilyn Smith

from Brookfield said this was a great topic since her company doesn‟t advertise internally

and would build this into her strategic plan.

Summary

It was clear to everyone that the issues we face regarding the ageing

workforce should not be tackled in isolation but should part of the overarching

HR and talent acquisition and retention strategy. It was also clear that many

organisations have not addressed this issue and in fact do not have the base

line metrics to fully understand the risk and therefore potential solutions.

1. Managing and ageing workforce is only one part of capability development

2. Know your workforce – facts and myths

3. Identify your issues – Loss of knowledge/skills or inability to do the job

4. Have a plan and give it focus

5. Build processes and integrate them into the business

6. Start now as it takes time – years

Business

In Conversation With Peter Mills, HRD Sydney Water