This article reports the findings of research into the functioning of companies' and organisations' internal labour markets. Four case studies of Australian and United Kingdom public and private sector organisations have been undertaken with two principal aims: to elucidate the challenges and barriers to the employment of older workers, and to demonstrate the benefits to business and to older workers of age-aware human resource management policies. In each of the case-study organisations, age-related assumptions affected the management of knowledge and skills and the ways in which older and younger workers were employed. Managing age relations in organisations requires an understanding of the ways in which workers of different ages are perceived and how these associate with sub-optimal deployment. The article concludes by suggesting that policies directed at older workers alone will ignore the age and age-group dynamics that pervade workplaces. To promote the better deployment of younger and older individuals in rapidly transforming organisations, there is a need for policy makers, employers and employees to be attentive to the age-group relationships that currently inform workplace practices. Organisations cannot ignore these age dynamics, but should adopt ‘age aware’ rather than ‘age free’ practices. The recommended human-resources approach would attend to individuals' capabilities and not stereotype them by age.