The debate continues — and in fact is heating up amid the financial turmoil rocking North America’s economy — over how hard businesses and Canada’s economy will be hit by the exodus of retiring boomers.
The current financial crunch is taking a toll on older workers and their ability to make an easy transition to retirement and there is no doubt more older workers are planning to stick around a bit longer than anticipated.
But boomers want to remain in touch with work and the workforce, to some degree — current financial circumstances notwithstanding — rather than choosing the traditional seniors’ scenario of total leisure.
Still, workforces are facing dramatic changes wrought by boomers. Some will stay on the job as long as they can. Others will look to innovate and work flexible schedules. Others might prefer to remain connected in a consulting capacity. And, yes, some will depart with a flourish, never to be seen anywhere near an office again. The bottom line — as boomers hit retirement age, the lifestyle changes they seek could certainly mean employers face a critical void in workplace knowledge and expertise.
Some companies are already taking action to develop and implement workforce plans and incentives to address any shortfall that may loom amid the shifting landscape and the lack of incoming talent. An obvious starting point is to ask currently employed boomers just what they have in mind for the future and who among them is open to the possibility of remaining in the workforce beyond retirement age.
But just how many employers are undertaking the due diligence needed to manage the workforce and prepared for — and able to avoid — a talent crunch?
The impact of retirement by boomers will hit organizations in varying degrees, according to a survey by Life’s Next Steps, a retirement lifestyle planning consultancy, and the Toronto-based Human Resources Professionals Association. About one-quarter (26 per cent) of respondents said they expect retirement levels to hit 20 per cent or higher in the next five years. Another 15 per cent said they expect up to 30 per cent of staff to retire, and eight per cent are expecting up to 40 per cent of the workforce to retire. About one-half said they expect fewer than 10 per cent of staff to retire within five years.
The survey of 627 people — Are Canadian Firms Prepared for the Boomer Exodus from the Workforce? — was conducted in the summer. The majority of respondents represented companies with 50 to 5,000 employees. Nine per cent had fewer than 50 staff, while 13 per cent had more than 5,000 workers.
Companies also had diverse views on how big a threat boomer retirement is, though a good number felt a threat exists. Asked if the level of retirement they face poses a threat to their ability to meet business objectives, more than one-half (56 per cent) of respondents said no. But 39 per cent called the retirement wave “somewhat of a threat” to business objectives while five per cent saw a “big threat.”
The survey also asked employers how well prepared they are for a talent crunch. Only two per cent said they are “on top of this issue” while another 12 per cent claimed to be “well prepared.”
But the majority — 60 per cent — said they are only “somewhat prepared” while 23 per cent admitted to being “poorly prepared” to deal with the impact of boomer retirements. Another three per cent said they are “totally unprepared.”
Many employers, then, see a threat looming, yet many are also failing to respond proactively to this perceived threat. Perhaps it is not surprising, then, that most respondents — 78 per cent — also said they have not surveyed older employees to collect information on their retirement plans, nor have they identified older workers as deserving special attention in light of the changing conditions ahead.
On the question of whether there is interest in retaining older workers as a possible solution to the loss of talent and expertise, 16 per cent said this is “a top HR priority” or “quite important.” But 42 per cent said the issue is one “among many issues we are thinking about,” while 28 per cent said the issue “has not generated much interest in our organization” and 14 per cent said “the issue is not on our radar screen.”
Interestingly, a separate survey conducted by Life’s Next Steps of more than 900 employees revealed fewer than one-third (30 per cent) had a “lifestyle plan” in place for their retirement years, although most (60 per cent) wanted to continue to work into retirement in some form or another. Unfortunately, more than one-half also felt their company was not supportive of retirees wishing to stay on the job longer.
The message to employers seems clear enough: With skilled labour shortages already hitting crisis proportions for some industries in Canada and beyond — and more bad news ahead — boomers represent a valuable talent pool for companies already seeking solutions as jobs go unfilled.
Now is the time for employers to reach out to older workers with initiatives and ideas that benefit both sides of the equation. Boomers are clearly eager for this kind of assistance.
Suzanne Armstrong is the president of Life’s Next Steps in Toronto that helps soon-to-be retirees plan for their future. She can be reached at email@example.com or visit www.lifesnextsteps.com for more information.