The effects of career development practices on expected retirement age of injured older workers

Abstract

BACKGROUND:

Work injury can put older workers at higher risk of disability and early retirement. Rapid population ageing has raised questions about the ability of older workers to continue working, especially for those who have experienced work injury. Career development practices have been highlighted as a form of rehabilitation support to enable longer working lives of injured older workers.

OBJECTIVE:

The purpose of this study was to explore whether career development practices contribute to higher expected retirement age for injured older workers (aged 45 and above).

METHOD:

A total of 274 older Australian workers employed at large organisations completed a survey about their health, retirement intentions, work injury, and engagement with career development practices. Hierarchical multiple regression and two-way analysis of variances were used to analyse the data.

RESULTS:

Work injury contributed to significantly lower expected retirement age for older workers. Work training and development predicted a significant amount of variance in expected retirement age of injured older workers, and enabled them to work to later retirement ages. There was no statistically significant difference in injured older workers’ expected retirement age for those who participated in career discussion with their managers and those who did not participate.

CONCLUSION:

Lack of career development support can affect injured older workers’ ability to participate in employment. The findings highlight the importance for rehabilitation and human resource professionals to have a proactive and educative role in providing career development support to injured older workers.

Keywords

Work injury career development older workers human resource management retirement

1 Introduction

Experiencing a work injury can put older workers at particular risk of disability and early retirement, which has significant costs to the individual, their workplace productivity, and wider society [1, 2]. Older workers forced to retire early due to their difficulties at work are more likely to have reduced post-retirement income or fall into poverty due to reduced employer retirement benefits and increases in mandated age to access social benefits [3]. Work injuries are also costly to employers and the economy. The Australian Institute of Health and Welfare found that claim costs have been rising over the past decade and in 2017-18 the nation’s workers compensation agencies spent $1.8 billion on work-related injuries and diseases [4]. A systematic review of return-to-work outcomes among injured older workers (aged 45 and above) has found that they are likely to sustain more severe and costly injuries, are less likely to receive occupational rehabilitation support, and are also less likely have modified work available than younger workers [5]. It also found that older workers were more likely to require additional support for retraining to enable them to continue working in different jobs or modified work to reduce their risks of injury [5]. However, injured older workers were less likely to be offered rehabilitation support, despite having more severe injuries [6]. These findings are supported by studies on 15 years of workers compensation claim data in South Australia [7] and comparative analysis of workers compensation claim data across eight Australian states and territories [8].

1.1 Population ageing and costs of work injury among older workers

Provision of rehabilitation support and making working lives more sustainable for people until older ages will be increasingly important to protect the socioeconomic welfare of ageing nations [9]. Across all Organisation for Economic Co-operation and Development (OECD) countries, old-age dependency ratio (the ratio of the population aged 65 years and over to the population aged 15-64 years) is projected to increase from 26 percent in 2018 to 43 percent in 2050 [10]. In Australia, the number of working-age people (15 to 64 years) to the number of people aged 65 and above has been falling. In the 1970s, the ratio was 7.3 to one, today it is four to one, by 2060 it will only be 2.7 to one [11]. It is estimated that population ageing will reduce the budget balance by around $20 billion and increase spending by around $16 billion by 2029 [12]. The net effect of ageing is greater than the projected costs in the same year for any other key expenditure categories such as Medicare, National Disability Insurance Scheme, funding for schools and hospitals, family tax benefit and the disability support pension [12]. This presents challenges for long-term economic growth and fiscal outlook because the impact of ageing on the budget arises through an increase in spending (such as age pension) and a decrease in revenue (such as income tax collection).

Population ageing has raised questions about the ability of older workers to continue working, especially for those who have experienced work injury [9]. Most OECD countries, including Australia, have increased statutory retirement age and delayed entitlement to public pension benefits to cope with an ageing population and encourage more people to remain in the workforce [11 , 13–15]. However, research has shown that work injury often results in older workers experiencing longer length of disability and absenteeism, as well as never achieving sustained return to work [2, 16]. In Australia, 12 percent of women and 21 percent of men over 45 retire early due to injury or disability [17]. Older workers aged between 45 and 65 also have the highest incidence of serious work injury compensation claims compared to all other age groups [18]. As the average age of the workforce rises, it is likely that there will be more workers with various impairments and functional limitations. Without appropriate support, work injuries will have significant social and economic consequences because adequate pension and social benefit provisions can only be provided in the future if longer working lives become a reality for the majority of people [15, 19].

1.2 Career development practices and extending working life of injured older workers

While chronological age is an important definition to regulate social benefit systems and access to superannuation funds, factors associated with biological, social, and cognitive aspects of ageing were found to have more significant impacts on older workers’ ability to extend their working life [20]. Many injured older workers have permanent impairments or have ongoing medical restrictions that require more intensive support via vocational rehabilitation programs [21]. Career development has been highlighted as a form of rehabilitation support to enable longer working lives because they address these other domains in ageing [22 –24]. It can range from training and skill development opportunities to career planning activities with their managers which can lead to further work opportunities [25]. Research on vocational retraining programs has found that injured older workers who participated had better employment outcomes and were more satisfied with their employment compared to those who did not participate [24]. Similarly, research has also found that career planning activities that encourage older workers to undertake new projects, tasks, and mentor others on the job improve job performance, increase job satisfaction, and provide incentives to remain in the workforce for longer [26]. These career development practices are helpful for older workers looking to extend their working lives because it prompts them to be more reflective about factors (e.g., injury) that can contribute to functional decline, be more strategic in looking for ways to defer or compensate for potential deterioration, and optimise function and value in alternative abilities [24, 27].

Research has shown that supportive career development practices can influence injured older workers’ perception of their ability to perform the same type of work at 60 and beyond [2 , 28–30]. Career development benefits both workers and organisations. When workers become more knowledgeable about their organisations and work, their job performance, innovation, and managerial talent are likely to increase [31]. This contributes to organisations getting more value from their human capital through providing career development opportunities. Older workers also have valuable skills and knowledge that only come from years of work experience which cannot be easily replaced by younger or less experienced workers [32]. Organisations that develop and retain older workers are also more effective at facilitating knowledge transfer (e.g., mentoring, classroom training led by older workers, and story-telling) within multigenerational workforces and preventing loss of key knowledge that is customised to their operations, structure and culture [32, 33].

1.3 Large organisations and career development practices

Larger organisations (>300 workers) usually have more personnel capacity and financial resources to provide career development practices to older workers [34, 35]. Smaller and medium-sized organisations have comparatively less resources and range of jobs which often limit their ability to provide career development practices for older workers [36]. In contrast, larger organisations accustomed to dealing with an ageing workforce are more likely to have experience in accommodating their workers’ needs and to have resources to invest in improving their capabilities [37]. Those with higher proportion of older workers also tend to expect an impending wave of retirement and they are more likely to offer career development options to help them do succession planning and mitigate a sudden exit of their older workers who have valuable organisation-specific knowledge [38]. Hence, this study will only include large organisations with half of its workforce aged 45 or above because they have more capabilities to provide career development practices for older workers. Furthermore, the age profile also mirrors the workforce ageing trajectory in Australia [11].

1.4 Defining the older worker

There is ongoing debate in the literature about who is considered an ‘older worker’. Research has used different methods to differentiate who is an older worker, including chronological, subjective, functional, psychosocial, organisational, and life-span approaches [39]. In this study, we define older workers using chronological age (45 years and above), which is justified based on the way Australian government entities and academic researchers used it to define ‘older workers’ in administrative data [7, 8]. The age of 45 is also used by the Commonwealth Age Discrimination legislation, United Nations and the World Health Organisation to classify older workers [40, 41]. The chronological age perspective is more practical, compared to the other approaches, because there is consistency in the way individuals report their age in years and it provides a clear criterion on which workers can be included in this study (i.e., 45 years and above).

1.5 Research aims and research questions

The purpose of this study was to explore whether career development practices contributed to higher expected retirement age for injured older workers. The research question was: If we control for the possible effect of work injury, do career development practices (training and skill development, career discussion with manager) predict a significant amount of the variance in older workers’ expected retirement age?

2 Method

2.1 Research design

This study used a cross-sectional design to examine the impact of career development practices on expected retirement age of injured older workers. Participants completed an online survey on organisational culture, workplace practices, and retention strategies. The online survey is convenient for participants because they can choose to respond at any time and location that suit their needs. It reduced the costs of administering the survey because the researcher does not have to mail out the survey or attend face-to-face encounters to assist the respondent in answering the questions.

2.2 Sample

A total of 274 older workers (155 men; 119 women), aged between 45 to 71 years (M = 53.16, median = 53, SD = 4.94), participated in the study from three large Australian organisations in local government administration, construction materials mining, healthcare and social assistance industries. The response rate of 30 percent was consistent with other studies which surveyed older workers and their experiences of workplace practices [42]. All organisations had half of their workforce over the age of 45 years. Table 1 shows the demographic profile of respondents. Among the 274 respondents, 155 or 56.6 percent were male, 197 or 71.9 percent were married, 174 or 63.5 percent were employed in full-time jobs, and 79 or 28.8 percent had experienced a work injury. Two responses were excluded from the analysis because they did not meet the eligible age requirement (i.e., 45 years and above) and did not provide an expected retirement age.

Table 1
Demographic profile of respondents (n = 274)

Variables Number of Percentage

respondents

Sex

Male 155 56.6%

Female 119 43.4%

Marital status

Married/partnered 197 71.9%

Single 39 14.2%

Divorced 27 8.8%

Widowed 7 2.6%

Prefer not to say 4 1.5%

Employment status

Full-time 174 63.5%

Part-time 100 36.5%

Education

High school 86 31.4%

TAFE 88 32.1%

University 100 36.5%

Occupational group

Managers 33 12.0%

Professionals 36 13.1%

Associate professionals 34 12.4%

Community and personal service workers 38 13.9%

Clerical and administrative workers 47 17.2%

Technicians and trades workers 27 9.9%

Machinery operators and drivers 41 15.0%

Labourers 18 6.6%

Work injury

Yes 79 28.8%

No 195 71.2%

Variables	Number of	Percentage
Sex
Male	155	56.6%
Female	119	43.4%
Marital status
Married/partnered	197	71.9%
Single	39	14.2%
Divorced	27	8.8%
Widowed	7	2.6%
Prefer not to say	4	1.5%
Employment status
Full-time	174	63.5%
Part-time	100	36.5%
Education
High school	86	31.4%
TAFE	88	32.1%
University	100	36.5%
Occupational group
Managers	33	12.0%
Professionals	36	13.1%
Associate professionals	34	12.4%
Community and personal service workers	38	13.9%
Clerical and administrative workers	47	17.2%
Technicians and trades workers	27	9.9%
Machinery operators and drivers	41	15.0%
Labourers	18	6.6%
Work injury
Yes	79	28.8%
No	195	71.2%

2.3 Survey procedures

Human resource personnel at the participating organisations distributed study invitations on staff noticeboards and online staff newsletters. The work, retirement and health survey consisted of an eighteen-item scale on organisational culture and retention strategies for older workers. The survey asked participants about their demographic details (e.g., age, gender, occupation, employment status, marital status, education, and expected retirement age). The survey also asked participants about their knowledge of their organisation’s workplace practices and whether they have used any of these practices to support their work and retirement planning. Further questions asked participants whether they have experienced any work injury. The full survey is detailed in the Appendix. The work, retirement and health survey was administered as a Research Electronic Data Capture (REDCap) online survey. REDCap is a secure electronic data capture application designed to collect and manage participant data and administer online surveys. The local government and construction materials mining organisations administered the survey between January 2019 and April 2019. The healthcare and social assistance organisation administered the survey between May 2019 and August 2019. In accordance with ethics approval, all participants were de-identified and participation was voluntary.

3 Results

The expected retirement age selected by the respondents varied in age from 55 to 76 years (M = 64.85, median = 65, SD = 3.41). Table 2 showed the usage of career development practices among respondents, in which a quarter of older workers participated in career planning with manager and slightly less than a quarter of older workers participated in training and skill development programs. Table 3 shows the average expected retirement age of injured older workers for those who participated in career planning with their manager, training and skill development programs, and vice versa. Table 4 displayed the correlations of the variables used. It was found that the variables used as mediators (i.e., career planning with their manager, training and skill development) in the model were highly correlated with each other. In order to address the possible problem of multicollinearity, a separate regression analysis was conducted for the predicted mediators.

Table 2
Usage of career development practices (n = 274)

Career development practices Number of Percentage

respondents

Career planning with manager

Yes 71 25.9%

No 203 74.1%

Training and skill development

Yes 60 21.9%

No 214 78.1%

Career development practices	Number of	Percentage
Career planning with manager
Yes	71	25.9%
No	203	74.1%
Training and skill development
Yes	60	21.9%
No	214	78.1%

Table 3

Average expected retirement age of injured older workers and participation in career development practices

Career development practices	Mean age	SD
Career planning with manager
Yes	62.00	2.33
No	62.80	2.73
Training and skill development
Yes	64.86	3.67
No	62.52	2.51

Table 4

Correlations of independent variables and dependent variable

	1	2	3	4
1	1
2	–0.175*	1
3	–0.298*	0.352*	1
4	0.398*	–0.229*	–0.201*	1

Note 1: 1 = expected retirement age; 2 = career planning with manager; 3 = training and skill development; 4 = work injury. Note 2: * indicates p < .05.

Hierarchical multiple regression was used to assess the ability of career development practices (training and development, career discussion with their manager) to predict expected retirement age after controlling for the influence of work injury. Preliminary analyses were conducted to ensure no violation of the assumptions of normality, linearity, multicollinearity, and homoscedasticity. Table 5 showed the impact of career development practices and work injury on expected retirement age. In Step 1, the R² value of .16 revealed that work injury explained 16 percent of variance in expected retirement age with F (1, 272)=51.33, p < .001. The findings revealed that work injury positively predicted expected retirement age (β=.40, p < .001). In Step 2, the R² value of .21 revealed that work injury and training and development explained 21 percent of variance in expected retirement age with F (2, 271)=35.69, p < .001. The findings revealed that work injury (β=.35, p < .001) positively predicted expected retirement age, training and development (β=-.22, p < .001), and career discussion with manager (β=-.02, p > .05) negatively predicted expected retirement age. The R² change value of .05 revealed 5 percent change in the variance of the Model 1 and Model 2 with F change (2,270)=8.52, p < .001. The regression weight for work injury subsequently reduced from Model 1 to Model 2 (.40 to .35) but remained significant which confirmed the partial mediation. More specifically, work injury has direct as well as indirect effect on expected retirement age. Training and development contributed to the increase in expected retirement age and career discussion with manager did not contribute to this outcome.

Table 5

Regression analysis for mediation of career development practices between work injury and expected retirement age

Variable	B	95% CI	SE B	β	R ²	Δ R ²
Step 1					0.16*	0.16*
Constant	59.73*	[58.26, 61.19]	0.74
Work injury	2.99*	[2.17, 3.81]	0.42	0.40*
Step 2					0.21*	0.05*
Constant	63.84	[61.17, 66.51]	1.36
Work injury	2.63	[1.80, 3.46]	0.42	0.35*
Training and development	–1.83	[–2.77, –0.882]	0.48	–0.22*
Career discussion with manager	–0.13	[–1.03, 0.77]	0.46	–0.02

Note: * indicates p < 0.001.

To examine whether career discussion with manager has an interaction effect with work injury, a two-way ANOVA was performed to examine the effects on expected retirement age. Participants were divided into two groups according to their usage of career planning opportunities with their manager (Group 1: had undertaken career planning with manager; Group 2: had not undertaken career planning with manager). There was a statistically significant main effect for work injury, F (1, 270)=30.63, p < .05, and the effect size was medium (partial eta squared = .10). However, the main effect for career planning with manager was not statistically significant, F (1, 270)=.012, p > .05. The interaction effect between injury and career planning with manager was also not statistically significant, F (1, 270)=1.92, p > .05.

4 Discussion

This study aimed to find out whether career development practices (training and skill development, career discussion with manager) predict a significant amount of variance in expected retirement age after controlling for the possible effect of work injury. In support of previous studies, the results indicated that work injury did contribute to a significantly lower expected retirement age for older workers [1 , 16]. In support of previous studies, the results also indicated that training and development predicted a significant amount of variance in expected retirement age of injured older workers [24]. Training and development enabled injured older workers to continue working to later retirement ages. However, contrary to previous research, the results indicated that there was no statistically significant difference between the expected retirement age of injured older workers who participated in career discussions with their managers and those who did not participate [26, 27].

Work injury has significant negative consequences for older workers. Research has found that having a work injury is associated with longer length of disability and absenteeism, earlier retirement, lower post-retirement savings, and increased likelihood of falling into poverty at older age [1–3 , 17]. Results in this study indicated that work injury, by itself, predicted a significant amount of variance in expected retirement age for older workers. This is concerning because older workers also have the higher incidence of serious work injury compared to younger workers [18]. As OECD countries age, work injuries will have more serious social and economic consequences because the majority of people will either need to be able to self-fund their retirement or continue working for longer to sustain adequate pension and social benefit provisions [15, 19]. Prevention of work injury is the preferrable solution to address the social and economic inequalities for older workers. However, for those who do experience work injury, it is recommended that they are offered training and development support by their organisation to enable them to transition to more suitable jobs or duties and prolong their working lives.

Training and development activities contribute to higher expected retirement age because they are more targeted at older workers’ motivations to continue working. A Dutch study has found that, as workers get older, their motivation to remain at work shifts from a more extrinsic, competitive pattern to a more intrinsic, mastery-related pattern [42]. Training and development activities address this shift to a mastery orientation by facilitating more meaningful evaluation of progress and improvement and encouraging the learning process in work and training programs. It is recommended that organisations provide more training and development activities to enrich jobs and facilitate a constructive managerial style that addresses the motivations of their older employees.

The results indicated that only a quarter of older workers were offered career development and training supports. This is consistent with previous research on Australian and European organisations which also found that few provided these supports to older workers [41, 43]. A meta-analytic study has found that organisations and human resource professionals often assume older workers are less motivated, less willing to change, and less willing to engage in training and career development [44]. It found that the only stereotype consistent with empirical evidence is that older workers are less willing to engage in training and career development activities. Older workers whose preferred language is not English, have lower pre-injury wages, are not in white-collar occupations, and have less education are less likely to seek out career development supports [24]. In this study, 63.5 percent of older workers only had high school or vocational diploma levels of education and 62.5 percent were not in management or professional occupations. It is possible that education and occupational characteristics also contributed to the lower uptake of career development supports and less initiative to request career discussions with managers. It is also possible that this contributed to less offers of career development supports to injured older workers by their organisations. Organisations and rehabilitation professionals are better equipped to support individuals who are able to express their career development needs, so it will be important for injured older workers to be informed about the supports available and coached in appropriate ways to request such supports.

Career development supports are often not on the agenda for most governments and organisations, even though they have the potential to improve older workers’ ability to continue participating in gainful employment [41 , 45]. Many studies have found that most employers do not offer career development activities that support longer working lives [14 , 46]. A study of 3000 Australian workers found that older workers often have an unmet need for training and continuing education with one-third of respondents reporting employer reluctance, affordability, and lack of work flexibility as major barriers [47]. Reduced skill development opportunities are associated with premature workforce exit and they are issues that need to be addressed [25, 48]. As the population ages, it will be more pressing for organisations to consider implementing strategic career development and succession planning programs to help them retain older and experienced workers, remain competitive, and reduce recruitment costs by developing existing workers rather than hiring new ones (who are also likely to be older in line with demographic change).

4.1 Implications for research and practice

Human resource and rehabilitation professionals need to consider the personal and workplace factors that can limit career development support for injured older workers who face increasingly complex options and considerations as they approach retirement age. It is possible that the career development support needs and work capacity of older workers in their 50s will be different to that of those in their 60s or 70s. Age, marital status, and financial situation may also affect these workers’ motivations to engage in career development at their organisations. Further research may be needed to examine these differences for an ageing workforce.

Employers, human resources, and rehabilitation professionals play important roles in promoting career development practices and developing an inclusive organisational culture. Through increased awareness of the need for career development support, rehabilitation professionals can more effectively advise injured older workers and collaborate with human resource professionals to find sustainable and suitable employment options. Rehabilitation professionals are likely to support more older injured workers in the coming years. The effectiveness of rehabilitation support and intervention depends on the active cooperation of human resource professionals because they guide the career development practices in organisations. Future research should consider exploring the human resource experience in designing and implementing career development practices for older workers and investigate the reasons that motivate human resource professionals to provide these supports.

4.2 Limitations

In terms of methodology, the cross-sectional design of the study limited its inferences to causality and effects. While it is helpful in examining the impact of career development and work injury on expected retirement age, it cannot examine the causes for change in retirement preferences or observe the actual retirement decision when older workers choose to exit the workforce. There is currently a lack of longitudinal perspectives on how organisations respond to workforce ageing and development practices targeted at older workers [48]. Future studies should use longitudinal designs to examine how career development practices influence expected retirement age over time for older workers, especially those with work injury. This study focused on older Australian workers employed in large organisations. Larger organisations often have more personnel and financial capacity to provide and implement workplace practices to retain and accommodate injured older workers [34, 35]. Future studies also need to consider the expected retirement age of injured older workers in smaller organisations and those in self-employment.

5 Conclusions

This study found that training and development contribute to significant variance in expected retirement age of injured older workers. Work injury can have long-lasting and negative consequences for older workers. As workforces age, organisations will need to develop better strategies to prevent work injury and invest in training and development activities for their injured older workers, who may not be able to return to pre-injury jobs or duties. Career development supports are still not common practices in most organisations, even when they have a high proportion of older workers. It is recommended that future research examine the reasons that motivate human resource professionals to provide career development support for older workers.

Conflict of interest

None to report.

Footnotes

The appendix is available from .

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The effects of career development practices on expected retirement age of injured older workers

Abstract

BACKGROUND:

OBJECTIVE:

METHOD:

RESULTS:

CONCLUSION:

Keywords

1 Introduction

1.1 Population ageing and costs of work injury among older workers

1.2 Career development practices and extending working life of injured older workers

1.3 Large organisations and career development practices

1.4 Defining the older worker

1.5 Research aims and research questions

2 Method

2.1 Research design

2.2 Sample

3 Results

Table 2 Usage of career development practices (n = 274) Career development practices Number of Percentage respondents Career planning with manager Yes 71 25.9% No 203 74.1% Training and skill development Yes 60 21.9% No 214 78.1%

4.1 Implications for research and practice

4.2 Limitations

5 Conclusions

Conflict of interest

Footnotes

References

Table 2
Usage of career development practices (n = 274)

Career development practices Number of Percentage

respondents

Career planning with manager

Yes 71 25.9%

No 203 74.1%

Training and skill development

Yes 60 21.9%

No 214 78.1%