Training older workers can offset shortages due to aging: Report

Across the board shortages unlikely, but some areas like nursing and IT may be hit hard

An aging workforce is not a “crisis” but a “challenge” that can be managed with careful planning by employers and governments, according to a report by sociologists at the University of Western Ontario, in London.

An increasingly older workforce is certainly going to be an issue, but not the only issue, said Julie Ann McMullin, one of the authors of Labour Force Ageing and Skill Shortages in Canada and Ontario.

“Talk of a general skills crisis sparked by an aging workforce is inappropriate. Wage levels, working conditions and education and training policies may be just as influential.”

The report was done as part of the Workforce Ageing In The New Economy project, a federally sponsored consortium of academic researchers from Canada, the U.S., Australia and Europe who are looking for best practices in employing older workers in an increasingly knowledge-based economy.

McMullin, along with co-researchers Martin Cooke and Rob Downie, looked at demographic data, as well as the age structures and retirement averages in various sectors, and reviewed previous studies and research. Their findings echo other studies that have warned of staffing problems as the disproportionately large co-hort of baby boomers retire. But McMullin, Cooke and Downie stress that focusing too much simply on the rising age of the workforce paints an inexact picture of the labour supply problem.

“There is no evidence that Canada is facing a looming general shortage of skilled labour as direct result of demographic aging,” conclude the authors.

There is a high likelihood of localized skills shortages in occupations like nursing which faces high retirement rates and a poor recruiting record, and in the IT sector, which has a poor record retraining and retaining older workers.

By having a clear picture of how older workers are being employed and where, better workplace practices can be developed and policies implemented to minimize the impact of an older workforce.

Some of these things have been talked about for a few years, but more needs to be done around issues like promoting life-long learning, phased retirement and greater workplace flexibility to get people to work longer, said McMullin.

“If the average age of retirement in an occupation is 58 and if that was increased to 59, that could have a huge impact on skills supply,” she said.

There are also too many barriers to retraining, she said. Many employers retain a bias against older workers and won’t spend the money to upgrade their skills. “There is a reluctance to invest in people age 45 and older.”

Similarly, immigration has been much discussed as an important source of new workers to replace retiring Canadians. The government has taken some action to meet skills demands through immigration, but more needs to be done to make the programs more effective. “It seems like we go half way,” she said. “People are targeted for their skills, but then we don’t go the next step to make it possible for families to come over with them.”

Among some of the other conclusions and observations in the report:

On immigration: “Automotive industry representatives have suggested that difficulties arranging immigration for the spouses and families of skilled workers has prevented it from attracting the skilled labour needed.”

On encouraging higher rates of labour market participation: “The provision of public child care, for example, may improve the ability of lone mothers to participate in training or skills development.” The authors also highlight current policies that make retraining difficult. “In many provinces, including Ontario, people on social assistance cannot access student loans that would enable them to attend post-secondary schools. In most jurisdictions an unemployed person who is not eligible for employment insurance is also not eligible for any kind of supported education or training.”

On phased retirement: One estimate holds that “if the average age of retirement remained at age 61.5 real GDP per capita could decline by (more than) 14 per cent by 2050. However increasing the average age of retirement by one year would have the effect of increasing real GDP per capita by 3.5 per cent by 2050,” the report states.

“However, the elimination of mandatory retirement will only lead to modest increases in the average age of retirement. For the most part, individuals in jobs that are unfulfilling or stressful and who can afford to retire early will do so.”

On life-long learning: Policies should move away from “placing nearly all formal education at the beginning of working life, to policies that would facilitate training and retraining through life-long learning.”

Misconceptions about the “trainability” of older workers remain a problem. “Yet, research suggests that the relationship between ‘trainability’ and age is not clear. Rather, the ability of older workers to acquire new skills depends on the design of the training.”

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