Supply and demand; Australia as an ageing nation

Tuesday, March 21, 2017

DEMAND: AUSTRALIA AS AN AGEING NATION

A CLEAR AGEING TRAJECTORY

Australia is experiencing a baby boom, with births exceeding 300,000 a year. 30 years ago, the over 65s made up just 11% of our population (one in nine persons). Today the over 65s make up 15% of our population (one in seven). Forecasts project that this cohort will make up 18% in 2027 (one in six). By 2047 one in five Australians (20%) will be aged over 65.

AGEING SOCIETY

Our median age is also increasing. Three decades ago the median age of an Australian was 31.3. Today it is 37.4 and in 2047 it is projected to be just under 40.

85+ POPULATION

The over 85s, where there is an even greater need for aged care services, are growing at a faster rate than the over 65s. In 1987 there were 133,448 Australians aged over 85. Today there are four times as many, and in 2047 there will 14 times as many.

INCREASED LONGEVITY

Not only are there more older people in our nation, but Australians are living longer than ever before. Life expectancy at birth in 1987 was 76.3, whereas today it is 81 for a male and 85 for a female. In 2047, it is projected to 89.9.

HEALTH ADVANCEMENTS ARE INCREASING LONGEVITY

The primary enabler of this increased longevity gain has been the health system rather than individual behaviour. Life expectancy increases will continue because of improved medical technologies, public health infrastructure and better public health measures. New and improved medical interventions will also contribute, as will the improved survivability rates of major illnesses and cancers.

A decade ago, dementia and Alzheimer’s disease were the 6th largest causes of death in Australia. Today they are the 3rd leading causes of death with the number of deaths having more than doubled to 9,864. Over the same period of time, deaths due to the first and second causes of death (heart disease and brain disease) have been decreasing. If today’s current trend continues, by 2021 dementia and Alzheimer’s disease will be the leading cause of death in Australia.

EXPONENTIAL GROWTH OF CENTENARIANS WILL KEEP THE QUEEN BUSY

In 1952, the year that Queen Elizabeth II became sovereign, 40 letters of congratulations would need to have been written to Australians turning 100. This year, 2,925 Australians will turn 100 and in 10 years 5,401 will turn 100. In 30 years the number of congratulatory letters written to Australians turning 100 will increase to 25,938 in the year 2047.

SUPPLY: AUSTRALIA AS AN AGEING NATION

THE CHALLENGE OF SUPPLY

Not only is there an increasing demand on the services provided by the aged care sector with the growing number of over 85s, there is also a workforce supply challenge.

RATIO OF WORKERS TO RETIREES DECLINING

The ageing population will place greater demands for productivity on the labour force. In 1975 for every person of retirement age there were 7.1 people in the working age population. By 2015 there were just 4.5 people of working age for every individual of retirement age, and this is projected to decline to just 2.7 people of working age for every individual at retirement age by 2055.

IMPENDING RETIREMENTS

Because of the high median age of an employee in the aged care sector, half of the aged care workforce will be of retirement age in 15 years. There are 350,000 workers in the aged care sector (estimated in 2012), so this equates to an average of 11,667 retirements per year for the next 15 years. This averages to 972 farewell lunches per month!

If we are to keep the current ratio of aged care workers to people aged over 85 in our nation, we need to add 129,945 workers in the next 10 years. This equates to recruiting 1,083 new workers per month, in addition to replacing the 972 retiring staff per month.

That’s a total recruitment goal of 2,055 each month – adding nearly 25,000 individuals to Australia’s aged care workforce each year.

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To find out more about McCrindle's expertise in the aged care industry, or how we can communicate these insights to your team, please get in touch.

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