HR and the workforce 10 years from now

Expect changes but not necessarily labour shortages

An aging workforce may not translate into massive labour shortages but will still present major challenges for HR over the next 10 years, according to a recent survey of Canadian HR professionals.

“(Most of us have) heard that the so-called baby boomer generation will fade away and go off to the golf course and… there will be lots of space for the so-called younger worker,” said John Withenshaw, senior vice-president, Canadian operations for DBM, the HR consulting firm that conducted the survey of 500 HR professionals. “But what our survey showed is that the baby boomer generation will not be leaving the workforce in the numbers that were predicted.”

Just 46 per cent or respondents said an aging workforce will mean more job opportunities for younger workers. “There is obviously a misconception out there,” said Withenshaw of the popular predictions of massive labour shortages.

Many older people want to keep working because they can, while others can’t afford to retire, he said. This is good news for organizations that need older workers to help prepare younger people to take over.

The study found that HR people believe that leadership, mentoring and the ability to work well in teams will be even more important than they already are. “They see the baby boom generation as being people who honed these skills to perfection and they see an inherent weakness in these areas in the coming workforce,” he said. The hope is baby boomers will stay on board to impart these skills to younger workers.

About one-quarter of respondents said an aging workforce will translate into an increased demand for good management skills among younger workers.

However, just because HR practitioners don’t believe older people will be pouring out of the workforce en masse, doesn’t mean there won’t be major changes to the Canadian workforce in the next 10 years. Far from it, said Withenshaw. The influx of younger people into the workforce combined with the pressure to hold onto older workers for longer represents fundamentally new recruitment and retention challenges for HR professionals. Employers need to understand that this changing workforce is going to necessitate much more flexible HR policies. “Companies will find that one size doesn’t fit all in terms of managing their workforce.”

HR people also believe the changing workforce means increased pressure to provide strategic input and less time and energy on HR administration (see chart page one). “Career development in human resources will require business education and experience,” states the report. “Related expertise in sales or marketing, for example, will be an asset for human resources professionals aspiring to a more strategic role in their organizations.”

Asked how an aging workforce will affect HR policies, respondents most often (22 per cent) said more workplace flexibility policies. More flexible retirement options was cited by 19 per cent of respondents and 16 per cent said more aggressive recruiting. Just six per cent said there will be a greater need for qualified immigrant workers. “That really blew us away also,” said Withenshaw.

The government is looking to bring in more immigrant workers but the survey seemed to show that most companies do not need this kind of worker.

Of course the effects of an aging workforce will differ by sector. There is going to be a wealth of opportunity for young people in the steel industry, said Brian Mullen, director of HR for Hamilton-based steel manufacturer Dofasco. “We’re looking at, over the next 10 years, probably 75 per cent of our workforce will be eligible for retirement.”

However, Dofasco has been working for almost five years to get ready. They started with a demographic study of the workforce to figure out where potential shortages could arise. From that study they came up with plans to replace those skills, he said. But it also pushed them to rethink how they do much of their work. “When you are faced with the exit of X individuals, you have to think about how I can do my business differently,” he said. “It is not a matter of simply replacing one for one, you have to get creative.”

The changes will also force HR to be much more involved in training and development and in particular, leadership development, he said.

With the use of technology more of our administration work is being pushed to the front lines. “Though to be quite candid there is always a push back,” he said. “Our focus in HR is on the recruitment side, our strategy and planning side and on our workforce development.”

As a company in the high-tech industry, Nexinnovations isn’t particularly worried about an aging workforce but it will still face significant challenges in the next few years, said Frank Price, vice-president of HR. “The aging workforce is not so much the issue, as the ability to adapt.”

The technology industry will continue to change constantly and rapidly, which puts continual pressure on workers to improve and expand skills. That in turn puts new and greater pressure on managers to help those employees, he said. Managers have to support their employees and manage them better. “We expect our front-line people to be better human resources managers. So from a standpoint of where we (the HR department) can add value, a lot of what we can do is change management and knowledge transfer,” he said. “The demand on the HR group is really going to be the coaching side.”

Managers may feel like HR is dumping HR work on them, but tools like good performance management systems are going to become invaluable in the years ahead. It’s up to HR to help managers understand that and adapt, he said.

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