Australian’s are getting older. Australia’s elderly population (officially defined as those over 65 – I hear you saying that’s not that old!) is expected to more than double by 2054-55.
When the baby boom generation kicked off in 1946, their life expectancy at birth was 66.1 years for a male and 70.6 for a female. That’s only 1.1 years and 5.6 six years in retirement respectively. Fast forward, and the life expectancy of a male born in 2015 has increased to 80.3 years and 84.4 years for a female¹ (Figure 1). It is no wonder the government is progressively increasing the retirement age from July 2017.
There are only six other countries worldwide where both men and women have a life expectancy over 80 years. Joining Australia are Japan, Italy, Switzerland, Iceland, Israel and Sweden.
We’re living longer as a result of more healthy lifestyles and advances in medical treatment, better education, rising wealth and improved public safety. The last point is worth reflecting on. No doubt we’ve felt at times the “nanny state” has taken over and the Australian ethos of “she’ll be right mate” has been suppressed, but just think how many lives have been saved because of the introduction of seat belts in cars and random breath testing, not to mention better workplace safety measures.
When the first of the baby boomers reached the retirement age in 2011, it was clear that this group was more educated, opinionated and wealthy than any previous generation and they were set to redefine what it means to be in retirement.
The baby boom wave entering retirement over the past five years is a mere trickle compared to what is coming over the horizon.
Within ten years, Australia’s population will be approaching 28 million, up from 25 million now and double the population in 1975. By 2055 when Generation X (those born between 1963 and 1980) enter retirement, the population is forecast to increase to circa 40 million².
In 2025, there will be 4.9 million Australian’s aged over 65, 600,000 of which will be aged over 85. The over 65’s will represent 17.4% of the population (Figure 3). At the same time, the 0-14 year olds will represent 19% of the population. By 2055, 22.6% of the population will be over 65 (17.7% aged 65-84 and 4.9% aged over 85).
Back in 1975, the over 65’s represented just 8.7% of the population, while the 0-14 year olds represented a massive 27.5% of the population.
What are the ramifications of an ageing population? The two most critical being: 1) the changing composition of our workforce and 2) the increase in costs of servicing the growing demand for health and aged care services.
The ratio of working age people (people aged 15 to 64 years old) to support every person aged 65 and over is shrinking. Back in 1974-75 there were approximately 7.3 eligible workers to every retiree, by 2014-15 this had fallen to 4.5 and by 2024-25 it is expected to fall to just 3.7 (Figure 3). Look ahead to 2054-55, and it is forecast to be a mere 2.7.
Despite the headline ratio numbers declining, recent employment numbers show that Australians, whether because they are healthy and have an active mind, or want to generate extra income (for many, compulsory super came late in their life and as a result they may not have saved enough to fund their retirement lifestyle), are opting to stay in the workforce longer – even if it is on a part-time or casual basis.
According to the latest employment data³, participation in the job market of the 65 years and over is 12.3% – a record high (Figure 4). The number of Australians aged over 65 still working totals 456,000, of which 198,300 are working full-time and 257,300 are working part-time. By 2054-55, Treasury expect the participation rate to increase to 17.3%.
Australia’s growing elderly population is set to drive up health and aged costs as a result of higher utilisation of health services and the cost of providing aged care services – both accommodation and home care.
According to the recent Federal budget, health costs are expected to increase from $69.1 billion to $79.3 billion by 2019/20 – a 14% increase, while aged care assistance is forecast to increase from $60.0 billion to $73.0 billion – a 22% increase°. The principal drivers of the substantial increases in aged care costs comes from income support for seniors (the pension), which is forecast to rise from $43.2 billion to $51.9 billion – a 20% increase, and payments for aged care accommodation support which is forecast to rise from $10.7 billion to $13.5 billion – a 26.1% increase over the next four years.
An ageing population won’t be without its challenges. But, we cannot afford to let the considerable experience, skills and wisdom of older Australian’s go to waste. We should embrace older Australian’s as being more active and productive than previous generations rather than ‘a burden’ upon society. Also, the sheer number of retirees coming through will increase demand for a range of service industries including tourism, financial services, aged care, and personal care services to name a few.
Article by Adrian Harrington who is the Head of Funds Management at Folkestone. Folkestone is an ASX listed (ASX code: FLK) real estate funds manager and developer providing real estate wealth solutions. For more information visit their website folkestone.com.au.
Sources:
[1] ABS Deaths, Australia, 2014 – Cat 3302.0 and https://www.aihw.gov.au/deaths/life-expectancy/
[2] 2015 Intergenerational Report: Australia in 2055 – Federal Treasury
[3] ABS – 6291.0.55.001 Labour Force, Australia, Detailed – April 2016
[°] Budget Paper No. 1: Budget Strategy and Outlook 2016-17 – Federal Government – May 2016
The Supanova pop culture expo is a fan convention which focuses on science fiction, fantasy films, television, comic books, anime, gaming and all things collectable. It is held annually in the Sydney, Brisbane, Melbourne, Perth, Adelaide and our own Gold Coast.
We decided to take our Expression Coffins along to the expo and show a new demographic our amazing superhero-themed designs.
We had a super fun time at the Supanova festival on the Gold Coast. The response to our superhero Expression Coffins was absolutely amazing as you’ll see in the video.
The crisis: JetBlue’s operations collapsed after an ice storm hit the East Coast of the US, leading to 1,000 cancelled flights in just five days.
The company’s response: CEO David Neeleman never blamed the weather. He wrote a public letter of apology to JetBlue customers, introduced a customer’s bill of rights, and presented a detailed list – which included monetary compensation – of what the company would do to help all the affected passengers.
The result: JetBlue managed to quash much of the uproar by being as public and straightforward as possible. Neeleman went on YouTube, the Today Show, Letterman, and Anderson Cooper, not pleading his case, but apologising for his company’s faults. Though there was much reputational damage done, JetBlue’s comeback allowed it to regain some of its luster. For an airline that differentiates itself so heavily on customer service, it was crucial that they did. Taco Bell’s ‘seasoned beef’ meat filling lawsuit (2011)
The crisis: Yum! Brands, Taco Bell’s parent company, was sued over the contents of its taco meat filling. The lawsuit alleged that the company’s ‘seasoned beef’ contained only 35% beef, and that Taco Bell was lying in its advertising.
The company’s response: Taco Bell explicitly declared the claims false, and shared with the public its percentages (88% beef, 12% secret recipe), along with the ingredients in the secret recipe itself. The company quickly fired up a multi-platform PR campaign to shoot down the allegations and get the word out about its “not-so-secret” recipe. It included traditional local market newspaper ads, but focused on online marketing with a YouTube channel, Facebook page, and more.
The result: Taco Bell’s existing consumer base responded overwhelming well to the campaign. The social media platforms shined, with the vast majority of commenters supporting the company’s stance. Less than four months later, the lawsuit was dropped, and Taco Bell had completely averted a potential PR disaster.
Johnson & Johnson’s cyanide-laced Tylenol capsules (1982)
The crisis: Seven people died after taking extra-strength Tylenol capsules that had been laced with potassium cyanide, a deadly poison.
The company’s response: The company put customer safety first. It quickly pulled 31 million bottles of Tylenol – $100 million worth – off the shelves and stopped all production and advertising of the product. It also got involved with the Chicago Police, FBI, and FDA in the search for the culprit, and offered up a $100,000 reward. Post-crisis, the company reintroduced Tylenol with new tamper-resistant packaging and $2.50-off coupons.
The result: A go-to case study in MBA classes worldwide, Tylenol’s response to the tragic 1982 crisis is regarded as one of the most successful sequences of crisis management in history. The media appreciated the lengths the company went to and its concern for the public interest, so the company was portrayed generally in a good light, helping the Tylenol brand to recover.
Ideally every funeral home should have a comprehensive public relations and communications plan that will be enacted in the event of a crisis. In developing these plans, it would be helpful to prepare scenarios of possible disastrous events to allow management and staff to determine how to deal with them before they eventuate. The reality is that most funeral homes will not have such a plan in place and therefore we offer some insight into the 6 steps to take to manage a crisis situation.
Define the extent of the crisis
Take time to identify what has happened and why is has happened.
Try to understand how widespread the backlash will be. Local, regional or national.
How have other businesses responded in similar situations? Could you use a similar strategy?
Establish a unified response
Do not distance yourself from the issue. Own the problem and be upfront if you have made a mistake.
Develop and maintain a unified position and supporting messages and keep the messages simple, clear and consistent.
Be sincere when making apologies; empathy goes a long way in crisis management.
Designate one person as the company spokesperson for media and public contact. This can be the business owner/manager or a specialist consultant.
Staff should be made aware that they are to refer all incoming contact to the dedicated spokesperson.
Act promptly
Cooperate with media. Target communications to those affected by the crisis and those who can effect action (staff, stakeholders, government officials, media etc).
Immediately make a simple statement indicating awareness of the situation, action being taken and willingness to inform media and public of details when they are known.
Openly and honestly provide as much detail as possible.
If appropriate, arrange for a news conference for the designated spokesperson as soon as facts are known.
Offer help to those suffering where possible.
Use facts to quash rumours.
Keep stakeholders informed of developments (staff, funeral associations, media etc)
Establish media response policy
Schedule briefings to relay data, correct misconceptions and maintain positive media relations.
Do not stonewall or deny that there is a crisis.
Treat all media equally; no ‘exclusives’.
Stick to the facts.
Keep details well documented
Keep records of all replies (for example: media outlet, reporter name, date, time, respondent, summary of response, follow up requests etc).
Conduct a post-crisis review
Look to learn from the crisis. Get together with your team and breakdown the events to fully understand the how’s and why’s of the situation. Use this time to put policies and procedures in place to mitigate the likelihood of the issue reoccurring.
It is not always possible to avoid a crisis occurring, however if a situation eventuates, then the key to a good public relations strategy is to take responsibility of the issue; be sincere in your concern; and be available to speak with the media and public throughout the ordeal.
