By Claudine Kapel
The path to achieving a sustainable talent pool may include challenging some long-standing assumptions about older workers.
For example, the C.D. Howe Institute suggests that since people are living longer, we need some new thinking about older workers and the role they can play in the labour force.
The implications of longer life expectancies are illustrated in the institute’s new report, The Main Challenge of Our Times: A Population Growing Younger. C.D. Howe says in 1950, a 35-year-old Canadian had a remaining life expectancy of 38.6 years. In 2010, however, a 35-year-old had a remaining life expectancy of 46.8 years – which represents a gain of 8.2 years.
“Viewed so, the Canadian population is not getting older in the traditional sense, but ‘younger,’ because many workers are approaching retirement age more able, and willing, to work longer than were previous generations of Canadians.”
C.D. Howe notes the aging population has been fuelling a variety of fears as the number of retirees per active worker continues to climb. “Absent a significant increase in productivity, GDP growth is bound to slow down, which would exacerbate stress on public finances, in particular through health expenditures.”
But C.D. Howe argues although these issues are real, “population aging is part perspective” because life expectancies are increasing.
Its model suggests someone who turned 65 in 2010 would have a life expectancy of a 59-year-old in 1950.
C.D. Howe acknowledges its analysis does not address all the important issues relevant to the topic of aging. Instead, it is meant to “launch the debate about the contribution of a growing group of 60-plus Canadians with much to add to the labour force.”
It suggests “new and more flexible labour market arrangements will be necessary” if we want to encourage labour force participation beyond age 65. “Because many older Canadians are already deciding to retire later than the arbitrary age of 65, public policy should aim to provide Canadians with the instruments to better manage retirement decisions.”
Some of C.D. Howe’s suggestions for achieving this include:
- Increasing the age requirement for public benefits like old age pensions.
- Encouraging phased-in retirement with changes to tax and pension rules, for example, to permit workers to work and receive pension benefits while contributing to a pension plan.
- Reducing clawbacks on earned income for Guaranteed Income Supplement recipients, which provide strong disincentives to work.
- Adjusting employment insurance programs to better cater to the needs of workers who are laid off late in their careers, and particularly those willing to make a career switch.
- Helping older workers go back to school, which could include revisiting education entry requirements to take into consideration on-the-job experience rather than strictly academic credentials older workers may not have
Employers should also consider revisiting their talent strategies to ensure they address the role of older workers in both near-term and longer-term talent solutions.
What has been your organization’s stance with regards to older workers? Do you see older workers as a viable – and possibly growing – part of your talent base? Have you revisited your total rewards strategy to ensure it can help you attract, retain and engage older workers?
Because if 60 is the new 50, there’s never been a better time for fresh thinking on the aging workforce.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.