By Alexandra Lopez-Pacheo
For decades, the 9.6 million Canadians born between 1946 and 1965 have been the single largest demographic in Canada’s labour force. Now, the oldest of the baby boomer generation has reached retirement age. That has employers in every sector bracing themselves for the looming skills and labour shortage that will hit the country over the next fifteen years as wave after wave of all 9.6 million baby boomers reach retirement age. In itself, the boomers retiring could be a manageable challenge if there were an equal number of young people ready to replace them. But there is not. According to Statistics Canada, there is only one worker aged 25 to 34 years for every three workers 55 or older. It’s not an issue that will be resolved anytime soon, either. Statistics Canada estimates that sometime between 2015 and 2021 the number of seniors will outnumber children under the age of 15. That’s never happened in this country before.
Nationally, “In the five years since the start of the financial crisis, the most significant labour market challenge has been creating enough good jobs for workers. Over the next five years, the most important challenge is more likely to be finding enough good workers for jobs,” said Tiff Macklem, Senior Deputy Governor, The Bank of Canada, in an October speech.
In fact, according to the Canadian Chamber of Commerce, Canada’s skilled labour shortage is becoming so dire it represents a threat to the country’s global economic competitiveness. The chamber predicts that over the next decade the country will experience a shortage of 163,000 workers in construction, another 130,000 in oil and gas, 60,000 in nursing, 37,000 in trucking, 22,000 in the hotel industry and 10,000 in the steel trades.
The challenges experienced by companies and organizations could be further compounded by a knowledge gap. The young people entering the workforce with university and college degrees who will be replacing baby boomers lack the practical knowledge that can only be gained from working on the ground. This is particularly the case for industries such as mining, which has struggled in recent years to appeal to younger generations and has an average retirement age of 59.5. All of this has the potential to result in loss of productivity and competitiveness, both for individual companies as well as the country as a whole.
“There are some things you can only learn in the field with experience,” says Ralph Pritchard, a mechanical designer who returned to the workforce in his 70s to work as a mentor and coach for younger engineers and designers at a pipe design and manufacturing company. “The young guys know the software top to bottom, but there is a lot they don’t know. I’m really taking the place of someone who is about 40, but that’s the generational gap that exists.”
While the source of the labour crisis is boomers reaching retirement age, numerous recent studies and polls are making it increasingly clear that many boomers want to be part of the solution. According to the fourth Sun Life Canadian Unretirement Index conducted by Ipsos-Reid between November and December 2011, only 30 percent of Canadians expect to be fully retired by 66. More than half expect to be working until the age of 71. Many will continue to work because they have to but some 39 percent plan to do so because they want to, according to the Sun Life study.
A growing number of companies have zeroed in on this solution. In 2011, ThirdQuarter, a national program designed to assist the matching of skills of mature workers with opportunities, found that 60 percent of the businesses across Canada it surveyed had hired an older worker in the past two years and 79 percent said they were likely to do the same in the future.
One company that has already tapped successfully into the mature labour force is Burlington, Ont.-based Sodexo Canada, where employees 50-plus make up a third of the food and facilities management services company’s 10,000 employees. Sue Black, the company’s head of human resources, told the Globe and Mail earlier this summer that this strategy was paying off—but not just in filling job positions.
“Our employee engagement scores show that our employees who are 50 years old and older are three times more engaged than younger employees, and their retention rate is 100 times better,” she said. “When we look at our data, they confirm why we want to hire and retain older people in our work force.”
Companies that are taking advantage of the opportunity mature workers represent, however, point to the need to develop good recruiting strategies that are geared to appeal to the needs and wants of older people, including flexible or part-time hours and good health benefits, training opportunities, as well as generous vacation time. But according to Strategies and Best Practices for the Recruitment, Retention and Employment of Older Workers in the Construction Industry, a best-practices manual created by the Government of Canada’s Construction Sector Council, one of the first steps to succeeding is to identify and address any ageism that might exist within the HR department and company culture.
“Your recruitment team may be bringing both conscious and unconscious biases to the table when they are involved in the recruitment process,” the best-practices manual says. “These biases could inadvertently lead to discrimination against older applicants.”
It also points out that older applicants are often rejected because they are perceived as being over-qualified and thus not likely not stay with the organization. Quite the opposite is true. “Younger workers tend to change jobs more frequently. Older workers who appear over-qualified may be very effective in positions that they understand well, and, in turn, can train, mentor and coach younger workers,” says the manual.
When mature workers are given roles within an organization that allow them to mentor and coach younger generations, they are helping to close the knowledge gap in that organization. What’s more, the research shows that giving back and sharing the knowledge and experience they have gained throughout their careers is often a prime motivator for older people wanting to get back into the workforce, even after retirement.
From an HR perspective, developing processes designed specifically to effectively manage an intergenerational workforce—and raise awareness and mutual respect of each generation’s perspectives, communication styles and motivators—is essential. That said, older workers such as Pritchard, who is now in his late 70s and still going strong at work, are motivated by the desire to mentor the next generation so they often have the life experience and patience to intuitively understand this. “The young guys speak a different language,” says Pritchard. “If you’ve been of out picture for a couple of years, you have to go in and listen carefully to what they’re saying so you can learn their language, because it’s a whole different approach. You can’t go in and say, this is the way to do it. You have to blend in your knowledge with the ability to put it in a good perspective so they can understand and use what you’re teaching them.”
According to Peter Cappelli, author of “Managing the Older Worker” companies require a different model of leadership and management practices, and in his book, he mentions a few ways for organizations to better work with older workers:
- Tailor your rewards and benefits to their lifestyle and interests: The promotion, bonus or stock options don’t matter as much to older workers, as mentioned above. Instead, provide motivation through meaningful work and social relationships; these factors are a bigger priority for older workers than financial- or career advancement-motivated rewards.
- Consult and empower them: Older workers want to be consulted, so ask them to participate in the decision process on a project or challenge a bit more. They have experience behind them and wisdom to solve many workplace problems, so ask them to get involved.
- Don’t ignore them: Older workers don’t want to be ignored, and they still need to be managed. Remember that managing someone older doesn’t mean you’re giving up authority; older workers must be held accountable, too.
- Initiate mentoring/onboarding: Companies like Deloitte have taken advantage of older workers’ unique talents by asking them to share problems they see in the organization that they’d like to work on and fix. Their attitude is, “If you think it’s a good idea, we will too, almost without exception. We trust you.”
Sometimes, Cappelli says, older workers have to help younger supervisors understand how to best manage them — and to engage younger supervisors in different types of relationships by taking initiative and speaking up for things like what motivates them, the type of environment they want to be in, or their strengths.
Peter Cappelli, Professor at the Wharton School has written the book “ Managing the Older Worker”.
ThirdQuarter (www.thirdquarter.ca) is a Canadian nonprofit organization with a mission to assist companies and mature workers find each other with a unique on-line skills match system.
Alexandra Lopez-Pacheo is an Oakville, Ontario based writer who contributes regularly to “Hire Perspective” an e-newsletter of ThirdQuarter.ca.