Retaining older workers
Janine Szczepanowski
Vice-president of leadership and entrepreneurial development,
EllisDon
Construction firm EllisDon is based in London, Ont., but its 1,100 employees work on projects in Canada and around the world, including Dubai, Abu Dabi, Greece and the southeastern United States.
At EllisDon, where the majority of employees have specialized construction expertise, the main concern around older workers is ensuring the London, Ont.-based construction firm doesn’t lose that knowledge when employees retire, says the company’s head of HR.
“We all know that we carry so much of our experience in our head,” says Janine Szczepanowski, vice-president of leadership and entrepreneurial development at EllisDon.
To ensure the firm continues to thrive, HR has to be certain there is someone in line with whom older workers can share their expertise and they have the time and ability to do so effectively.
That’s why the firm starts succession planning early. It identifies critical roles in the company, regardless of age, then looks specifically at those roles held by employees approaching retirement (assumed to be at age 60).
“Our ideal is that we would have two candidates lined up to fill that role,” says Szczepanowski.
Then the company looks at the replacements’ skills and knowledge to find out where there are gaps, which become part of the younger employees’ development plan.
Once the older employee is about two years away from retirement, the company chooses the successor and the two employees begin to work together.
In the first year, the older employee shares his knowledge and expertise with his successor. After one year, the successor takes the lead role and the retiree takes a more supportive role.
Instead of trying to replace a retiring worker at the last minute, EllisDon’s process allows for an easier and more effective transition, says Szczepanowski.
Taking two years makes for a smoother transition, but sometimes the older employee is reluctant to let go of the reins. In these instances, the management team has to be patient but find ways to keep the successor involved until the older employee is more comfortable in passing along his expertise and letting go of his responsibilities, says Szczepanowski.
EllisDon University, where internal and external experts hold sessions on certain “hot topics,” such as how to level a concrete floor, is another way the company encourages employees to learn from each other.
“The whole idea is to impart knowledge. It’s not classroom training. It’s really knowledge and experience sharing,” says Szczepanowski.
To further that knowledge sharing, the company created an intranet “knowledge library” of tasks and projects so other employees will always have a record to learn from.
Even before Ontario abolished mandatory retirement, the company never had such a policy and it’s not unusual for employees to work past age 65 and one even worked until age 72, says Szczepanowski.
Those who do retire often come back and work on a consulting basis. Many don’t want to work an entire year, preferring to work projects that fit into their lifestyle, such as in the summer so they can travel south for the winter.
Retirees tend to be more flexible about where they’ll work, which makes it easier to staff projects outside of central Ontario.
“Some of our retirees are far more mobile. They’ll go anywhere in the country because they know it’s for a short period,” says Szczepanowski.
Unlike many other companies, EllisDon’s has nearly equal numbers of baby boomer and Generation-X employees (42.78 per cent and 43.38 per cent, respectively).
“Overall, we’re in pretty good shape,” says Szczepanowski. “From the number of people we are forecasting to retire or who have told us they’re going to retire, we actually don’t have a concern.”
The one thing EllisDon can’t plan for is the unexpected. While succession planning is done well in advance of planned retirement dates, if an employee or his spouse suddenly becomes ill, then he will probably retire early, says Szczepanowski, which could throw a wrench into well-laid plans.
Something else that could trigger an early retirement is an employee’s desire to live his life while he can still enjoy it. For one employee, this meant moving to Mexico at age 50 to learn Spanish with his wife, says Szczepanowski.
That experience raised the idea of a formal sabbatical program at the last benefits review, but the committee rejected the idea.
“But I can guarantee you it will be something that we will talk about each and every year as we look at our benefits,” says Szczepanowski.
John Evans
Vice-president of human resources and corporate communications,
British Columbia Automobile Association (BCAA)
BCAA, based in Vancouver, is a member services organization that provides emergency roadside assistance, insurance products and travel services. It has 1,300 employees in 28 locations in British Columbia.
The British Columbia Automobile Association (BCAA) isn’t just worried about retaining older workers. It’s worried about attracting and retaining workers of all ages as more and more B.C. employers face labour shortages, says John Evans, vice-president of HR and corporate communications at BCAA.
“I think the challenge for employers as the labour pool shifts and shrinks is to get the attention of those folks who we want to attract and retain who may not have us on their radar screen,” he says.
To address that challenge, BCAA is looking at recruiting people with less experience and developing them in-house. The association also wants to make better use of its current workforce, which means encouraging older workers to stay on the job longer or to come back after retirement. BCAA has also begun offering recruitment and retention bonuses.
“Five years ago we didn’t do that. We have to do that in today’s world,” says Evans.
B.C. abolished mandatory retirement in January. BCAA followed suit by eliminating its mandatory retirement policy at the beginning of 2008 and has been looking at how to make itself a more attractive employer for older workers.
“We’ve had to design an appropriate benefits package for people who choose to work past age 65 or choose to come back to work after age 65,” says Evans.
The package is a health spending account with coverage for dental and extended health benefits and a life insurance option. The only thing the plan doesn’t cover is long-term disability because most insurance companies won’t offer it for people over 65.
The health spending account, and lack of long-term disability, allow BCAA to offer a similar benefits package to both younger workers and those over 65, without making the cost prohibitive to the association, says Evans.
“If we’re going to attract and retain those workers we’re still going to have to have a competitive benefits package, but it is going to be different than the benefits package that we offer to younger workers,” he says.
Another benefit employees of all ages are looking for is flexibility. Because BCAA offers many of its services — roadside assistance, insurance and travel support — around the clock, it’s difficult to offer employees flexible work arrangements.
But the association is looking into how it can offer greater flexibility, such as no-work weekends or summers off, while still meeting its business demands. Telework is another option BCAA is considering and it will run a pilot project this year with a group of call centre employees.
“I think that might be attractive to a lot of different people,” says Evans.
Telework might also help BCAA staff traditionally hard-to-fill shifts, such as split shifts. Employees should be more amenable to working a few hours in the morning and a few hours in the evening if they don’t have to travel to and from work in between, he says.
Since January, only a handful of workers have chosen to stay on at BCAA past age 65. But Evans foresees more older workers choosing to stay on the job, as long as they can set the terms, such as part-time or contract work.
“I think that’s going to be our biggest challenge, to match (their terms) with the needs of the organization,” says Evans. “It’s difficult to develop a specific policy around that.”
Instead, employers will probably have to come up with customized arrangements to meet the specific needs of individual workers, which could include higher compensation and retention bonuses. “It’s up to us to decide how far we want to go,” he says.
One of the options BCAA is considering is phased retirement. Under the association’s pension plan, employees can retire as early as 62 if their age plus years of experience equal 85. Phased retirement would allow employees to start drawing their pension while still working and accruing pension benefits.
“It’s definitely on our agenda” and will be discussed at an upcoming pension meeting, says Evans
Anne Duncan
Vice-president of human resources, Americas region,
JTI-Macdonald
The Canadian arm of the Japanese tobacco company is headquartered in Mississauga, Ont., and employs 465 staff.
Despite the fact 283 of its 465 employees are over 40, JTI-Macdonald isn’t worried about being able to replace older workers as they retire, says the tobacco company’s vice-president of human resources for the Americas region.
Employees genuinely enjoy working at JTI-Macdonald and their engagement scores have landed the company on Hewitt Associates’ 50 Best Employers in Canada list for nearly a decade, says Anne Duncan.
“Being in the tobacco industry, some may think it’s difficult to recruit. But we have been a best employer for the past eight years and we certainly have a good reputation,” she says.
The company’s turnover is about two per cent, with many employees staying at JTI-Macdonald all the way until retirement, she says.
One of the reasons they stay so long is the pension gold at the end of the career rainbow. The company offers a defined benefit pension that employees can access as early as age 55 when their age plus years of service equal 85.
“I would say our pension plan is one of the most generous in the country,” says Duncan, but the company doesn’t encourage employees to stay just because they want to collect a full pension and generous retiree benefits.
“We want them to remain with us feeling happy and valued until the very end,” she says.
One way the company does that is to fully utilize the skills of older workers, most of whom are on the sales team.
“They know the business and they’re great teachers for the new generation of employees. They can still add incredible value to the business,” says Duncan.
Among the sales force, the company starts recruiting a worker’s successor a few months before the worker’s retirement so both employees can work together before the older worker retires.
“That way those who are about to retire get to mentor the new employees, introduce them to customers and make sure the relationship works from the start,” says Duncan.
Another way to keep older workers happy is to ensure they are able to adapt to new technology.
“We think that giving them the best training possible will certainly do that,” says Duncan.
Being in sales, there are often new processes to learn and this year all staff also received new laptops. After they got their new computers, they had two days of intensive training on the new hardware and software.
If employees have a hard time grasping new processes or new technology, they can get frustrated, which makes them less motivated in the workplace, says Duncan.
“We need to make sure they remain motivated at that stage of their career,” she says. If they’re not happy or motivated, that spills over to other workers and brings down the whole company, she adds.
While the company doesn’t offer phased retirement or bridging programs, it does offer flexibility and work-life balance. Currently two employees job share and there’s one employee who works four days a week. The company is also considering a work-from-home option for office staff.
“Work-life balance is becoming an issue for all employees, not just older workers,” says Duncan.
Helena Gottschling
Vice-president human resources, Canadian banking,
RBC Financial Group
The Toronto-based bank has 51,575 employees, of which about 5,400 (10 per cent) are 55 or older.
RBC Financial Group is in an enviable position. While a large number of employees will be eligible for retirement in the next few years, particularly between 2010 and 2020, a large exodus is not expected, says Helena Gottschling, vice-president of HR, Canadian banking.
“Just because they are eligible doesn’t mean they will retire,” she says. “Because, actually, more of our employees are working longer.”
Employees at RBC are eligible to retire at age 55 with 10 years’ pensionable service. But Gottschling attributes an increase in the average retirement age to a number of factors, including better health — “60 is the new 50” — and the motivation to keep working. Because of recent changes in investment markets, employees in middle management and lower levels of the organization are also working longer, she says.
The bank has a few programs in place to retain mature employees including flexible work arrangements (three-day workweeks) and job sharing (in one example, a pair of employees alternate monthly).
“How we structure work is important, too,” says Gottschling, pointing out RBC sometimes bring retirees back on a contract, full-time, part-time or project basis.
While RBC is not yet in a position where incentives are needed to lure employees out of retirement, the contract arrangements are a perk because employees are paid and able to retain their Canada Pension Plan payments. RBC also offers phased retirement plans to employees, similar to flexible work arrangements, but work is reduced and structured to end within a set time period.
“The challenge is that we still have to build a structure that actually works, where the work can get done in a shorter time period and that can be complicated,” she says.
Figuring out a way to transfer knowledge from the older generation is also paramount.
“A good proportion of the employees who will be eligible to retire have been with us for many, many years,” she says. “The knowledge they have, and the experience they have, are invaluable.”
RBC is working hard to dispel one common myth: There are fewer opportunities in an organization for an aging person.
“We recently promoted an individual, who happens to be in his early 50s, to an executive position,” she says. “That, to me, is really encouraging, because it sends the right signal to people that they can be promoted even if it might be into their ‘destination role’ that they end up retiring out of in five or six or 10 years.”
The reality is that encouraging people to work longer really isn’t that complicated, says Gottschling. If you want someone to continue in a certain capacity, simply asking is the first step. And yet one of the biggest challenges for RBC is creating an open environment in which employees feel comfortable discussing their future plans.
“Because, really, that’s all it takes — a good conversation about future plans in the next couple of years and how we can work together to facilitate that,” she says. “Because we’d rather have an employee work part time for us than go work for the competition part time.”
Gottschling doesn’t know why people are always afraid to talk about retirement, and says the bank is communicating with leaders about how to ask about future plans in such a way that employees don’t feel threatened or pressured to make a decision. The approach is part and parcel of the bank’s goal of getting better at workforce planning.
