One-quarter of firms concerned about boomer retirement: Survey

Potential retirees postponing retirement helps to reduce succession concerns
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 09/26/2011

One-quarter of firms concerned about boomer retirement: Survey

Have boomers become workplace pariahs? (Analysis)

One-quarter of firms concerned about boomer retirement: Survey

By Amanda Silliker

More than one-quarter (25.4 per cent) of HR professionals think retiring baby boomers will cause significant challenges in filling positions at their organizations, according to the latest Pulse Survey.

“A lot of candidates we’ve spoken to, they have all the right credentials, the education, the right attitude, except they don’t have the hands-on experience that comes with age,” said Elisa Romaniello, HR manager at bearing manufacturing company NSK Canada in Mississauga, Ont., which has 76 employees.

Finding the right people to fill the shoes of retiring baby boomers at the management level is of particular concern.

“I can see the 40-year-olds (eventually) being in those leadership positions but, right now, I find it would be too risky because they would be learning as they go,” said Romaniello. “To lead the company, you need to be able to assess the risk because you’ve been there before — and I don’t think we have a big enough pool of people who have been there before.”

And 47.3 per cent of HR professionals think there will be some challenges but they will be manageable, found the survey of 393 Canadian HR Reporter readers and members of the Human Resources Professionals Association (HRPA).

While boomer retirement isn’t a major concern for Jennifer King, employee relations officer at the Thames Valley District School Board in London, Ont., a solid succession plan is something she thinks will help her organization handle the transition.

“I’m in an industry where we have educators and so forth and there’s an oversupply right now — if anything, people are dying to get into teaching,” said King whose organization has 7,500 permanent and 3,000 casual employees. “Yes, we do need to have a succession plan in place for people in a senior level who are retiring but if that’s all done in advance, it can go a lot more smoothly.”

More than one-fifth (22.6 per cent) of survey respondents said the exiting of the boomer generation will not create any significant problems for their organization.

Some employers, such as Sturgeon County in Alberta, don’t have a difficult time replacing positions, said Treena Whittier, HR advisor for recruitment and employee relations at the municipal government, which has 147 full-time and 60 seasonal employees.

“Probably our biggest boomer generation would be the heavy equipment operators,” said Whittier. “And there are lots of highly skilled people that are not necessarily a part of the boomer generation that can, without too difficult a transition, take over from them.”

So far, baby boomer retirement has had either a small impact or somewhat of an impact on 52.6 per cent of organizations. Only 6.4 per cent said it has had a big impact, while 41 per cent cited none at all, found the survey.

But the impact is expected to be felt later on, said King.

“In terms of our projected retirement dates, when it gets to 2020, there’s almost double the retirement,” she said. “Our boomer retirement is projected to increase each year… but the fact we know that will allow us to plan for it.”

More than one-third (37.2 per cent) of survey respondents said boomer retirement over the next five years presents a threat to their organization’s ability to meet its business objectives, while 6.5 per cent said it poses a big threat.

The loss of knowledge is most concerning for NSK, said Romaniello.

“With the retiring of boomers, you lose the ‘why’ behind certain policies or reasons why we do certain things,” she said. “And it will only be through trial and error (that the next generation) will learn the value of certain things that are in place.”

But 56.3 per cent of respondents said boomer retirement doesn’t pose a threat to their organization.

Thames Valley District School Board has training and development programs in place that prepare teachers to be principals and principals to be superintendents, which help reduce the threat of boomer retirement, said King.

“A school site is a multimillion-dollar business in a way… so it’s important to make sure we are developing potential leaders to take over those positions and develop them into senior management roles.”

At Sturgeon County, employees are required to provide four months’ notice of retirement. This creates a “recruitment buffer” for the municipal government and gives it time to identify whether or not it has key employees who can be promoted internally, said Whittier.

Postponing retirement

More than one-fifth (22.4 per cent) of survey respondents have seen “a lot” of evidence to suggest boomers nearing retirement want to postpone their retirement.

And 53.5 per cent said they have seen “some” evidence, found the survey.

“Several of our retirees went to part-time work before they retired because the transition was easier and financially it was easier,” said Romaniello. “They could earn extra money and still have time off in semi-retirement.”

Retaining older workers is important to 21.7 per cent of respondents and 31.9 per cent said it is one of the many issues they are thinking about.

“It’s more informal and on an as-need basis,” said Romaniello, adding her organization is very interested in retaining older workers. “At the time of retirement, the manager and the employee start talking about the possibilities, what the needs are and what the employee is able to do.”

However, 29.8 per cent said the retention of older workers hasn’t generated much interest at their organization and 13 per cent said the topic is simply not on their radar screen.

“We’re probably more focused on developing workers into future roles,” said King. “If knowledge workers want to continue working… that’s great for us but we still have to plan and prepare so it’s not necessarily retaining, it’s making sure we’re planning and passing along that knowledge.”

Have boomers become workplace pariahs? (Analysis)

By Todd Humber

For years, demographers have been running around like Chicken Little warning employers about the year 2011.

This is the year the first wave of baby boomers (born between 1946 and 1964) turn 65. We’ve had this date circled on the calendar and written about it numerous times in the pages of Canadian HR Reporter in the last decade. Labour shortages, a mass loss of institutional knowledge and a dearth of qualified leaders were supposed to be the result.

But all the problems forecast to arrive with the start of the boomers’ exodus from the workforce have arrived with a whimper — something the results of the Pulse Survey clearly back up.

Only one-quarter of the 393 respondents think the exodus will bring about significant challenges. Nearly 70 per cent are either confident they can handle the challenges or don’t think there will be any.

That’s a huge turnaround from three years ago. In October 2008, we reported on a slightly different survey of 627 HR professionals conducted by the Human Resources Professionals Association (HRPA) that came to a far different conclusion. It found only 14 per cent of respondents were fully prepared for the coming talent shortage caused by retiring boomers and the majority — 60 per cent — were only somewhat prepared.

So what happened? Where did this new-found confidence come from? A strong case can be made for three driving forces — the economy, the abolishment of mandatory retirement for most workers and a desire by boomers who love what they do to stick around.

The economy: The global economy has tanked and fears of a double-dip recession are growing. Not only has that caused many organizations to shed staff but it has also put a massive dent in the investment portfolios of boomers.

“I believe that, due to the recent problems with the economy that have affected retirement fund investments, many boomers will work longer than planned,” said one survey respondent.

Another observed a “dramatic” number of individuals who planned to retire have been forced to reconsider and defer retirement because of financial issues.

Mandatory retirement: A number of respondents commented that, with the elimination of mandatory retirement at age 65, many workers are sticking around longer.

And while few would argue with the premise it’s unfair to force a worker out the door simply because of a birthday, comments came through loud and clear about the challenge that’s posing.

Some expressed concern that, in the past, employers would simply accept poor performance from a worker approaching retirement age, knowing she would soon be heading out the door.

“(These firms) will now have to consider commencing a constructive discipline to try and influence output or make a case for termination for just cause — good luck with that,” said one respondent.

Boomers love their jobs: A few of the respondents put the spotlight on how much boomers enjoy working.

“I see a lot of people who are nearing retirement talking about how they really do enjoy their work. They can’t imagine why they would stop doing something they enjoy and which provides financial, social, intellectual and, often, a spiritual comfort all rolled into one. Why would you leave something like that?”

But what was most striking in the survey comments was the common view boomers are actually impediments who are overstaying their welcome.

Here’s a sampling of comments on that front:

• “Our boomers are trickling away despite buyouts to help them exit, the strategy being that we can hire new talent at a much lower cost.”

• “Several employees who could retire are not retiring and this means a blockage of opportunities for younger workers and that we are not getting fresh and new approaches and ideas.”

• “We actually wish many of them would retire now. We are going through a major change in our organization and they are so resistant to any change at all.”

The conversation in some firms seems to have flipped from “How do we keep them around?” to “How can we get rid of them?” — that’s surprising.

Not everyone holds that view, of course. A solid majority touched on issues you would expect — concern about succession planning in the senior ranks, a loss of institutional knowledge and an emphasis on creating phased-retirement programs to keep boomers around.

But it’s a double-edged sword. One respondent from British Columbia might have summed it up best: “With the elimination of mandatory retirement in the B.C. public sector, there are concerns people will stay indefinitely, which has implications for sick leave and increased health insurance costs. On the other hand, it’s good to retain boomers for their knowledge, work ethic and commitment to the organization and work… the newbies could learn a thing or two from their parents.”

The fact the sky didn’t fall this year isn’t surprising. We’ve always known the labour shortage caused by the boomers would be a medium to long-term problem. So don’t get complacent — there are plenty of dark clouds on the horizon.

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