An investigative report has found more than one-third of Australian businesses believe the current superannuation system should be overhauled for the future generation of workers and more than half want the system adjusted to remain relevant.
The Mercer research report, “Keating’s super meets the digital natives: The next generation of super”, launched in Sydney today, was compiled with the help of social demographer Bernard Salt.
The survey of 80 business leaders also predicted big changes for the future of the labour force, including a sharp spike in part-time workers, both men and women, as well as more employees aged 60 and older.
In addition, 53 per cent expect an increase in female employees, 41 per cent expect a decrease in male employees and 54 per cent are forecasting a rise in the use of contractors at the expense of permanent staff.
The business executives also believe the government and super funds are failing to engage young workers, with more than half saying workers under the age of 30 do not consider superannuation important.
Mercer chief executive Ben Walsh said it was time to reassess an outdated superannuation guarantee system to ensure it was “fit for purpose” for a modern workforce.
“Today’s workplace is no longer recognisable from the workplace of 1992, which was predominantly nine to five, Monday to Friday, with full-time positions largely held by men,” Walsh said today.
“Wide-ranging changes driven by the adoption of technology and automation have revolutionised businesses’ needs and how employees chose to work.
“A savings scheme structured 28 years ago to reward a lifetime of uninterrupted employment with one firm no longer reflects the trend towards casualisation and contract work, and the job flexibility increasingly being demanded by emerging generations.”
He said the report findings were further evidence the super system required a major review.
“We know the current system doesn’t work well for women taking career breaks or working reduced hours, or for contractors and those reliant on the growing gig economy,” he noted.
“If we don’t act now, more and more employees will be left out of pocket when they will need their money the most.”
Salt added the time was right to re-examine the super system to ensure it is “still on track” to deliver to its original charter.
“Superannuation of the future needs to be portable within Australian workplaces and even globally,” he noted.
“It needs to be ‘pauseable’ so that women, and men, can come into and out of the workforce as they deem appropriate to their life choices. The next generation of super needs to reflect the agility, the diversity, the globalness and the lifestyle choices of Australians today, that indeed the workplace now recognises.
“The nature of work has changed, as has the gender mix, the ethnic mix and technology skills of the workforce. And yet, throughout these profound changes, the essence of superannuation has not changed substantially.”
The report found almost all the business leaders surveyed expect the workplace transformation to continue, with 49 per cent predicting the work space will be extremely different in 30 years’ time.
It also said major trends identified by the executives are demand for more flexible working arrangements, including flexible hours, working remotely and job sharing, more staff turnover and shorter job tenure.
