Wave of retirements coming, few organizations getting ready

Organizations may say they want to hang on to older workers, but few are putting in place programs to offset a looming skills shortage.

Ask Trish Clark. As HR manager filling in for a maternity leave at the Winnipeg-based law firm Aikins MacAulay & Thorvaldson, she has put the question to the executives about their plans to capture the knowledge of the legal assistants, many of whom have clocked more than 15 years of experience. What she’s hoping to see is a mentoring program to pair up new legal assistants with the more experienced ones.

“But nothing has been done yet. And the legal assistants are going to leave with all this knowledge,” said Clark.

“The ones just coming out of school have only scratched the surface in their studies. They wouldn’t have the intricate knowledge of the law, the precedents that are out there. And the legal assistants with 15 years of experience would also have built a certain rapport with the clients, and all that would be gone too.”

According to a survey of 150 HR executives by The Conference Board in the United States, two out of three don’t even have an age profile of their workforce. Only a minority of organizations offer programs that enable the transfer of knowledge or entice mature workers to stay, according to this study, titled Valuing Experience: How to retain and Motivate Mature Workers. Just one out of 20 ask their older workers to mentor younger employees, and only 12 per cent of organizations used job rotation as a motivator.

Perhaps the concern has abated somewhat with more and more workers voicing their inability to retire after dismal performances of their pension plans. According to a poll of 1,000 Canadians, conducted on behalf of Desjardins Financial Security, only 16 per cent said they have a high degree of confidence in their ability to save for retirement. A much higher proportion of people, 46 per cent, said they will not be able to set aside enough money for post-retirement life. Only six per cent said they were confident in government pension plans.

But Taylor Train, vice-president of marketing of Desjardins Financial Security, cautions organizations against feeling too complacent about workers delaying their retirement. According to the poll, 68 per cent said they would not consider returning to work once they retire, even if they received an ideal offer to work full-time in their dream job. In Quebec, this figure is 87 per cent. “Working to death is not an option for Canadians,” said Train.

However, due to financial reasons, retirees are open to coming back to work on a part-time or contractual basis. In the poll, 59 per cent said they will seek to be self-employed and work about 20 hours a week so they can remain active.

“So there has to be a lot more flexibility on the part of companies in the future to be able to retain knowledge workers,” said Train.

If organizations simply take advantage of older workers’ need to stay employed without offering them intrinsic reasons to engage in the work, this would only lead to poor morale, he added.

“Companies have to treat older workers as valuable assets and put them into situations where they can transfer their knowledge effectively, where they’re approached because they are wise and have experience.

“Once that environment is established, then the issues around the financial problems that people may or may not have would tend to be ameliorated.”

His comments would seem to be borne out by another study of 1,600 U.S. respondents, conducted by The Conference Board in the U.S. According to Voices of Experience, Mature Workers in the Future Workforce, 45 per cent of those over 55 said they intended to retire within five years, but of this group, 62 per cent were interested in part-time work.

When asked what would keep them from retiring, respondents checked off a higher salary (46 per cent), flexible hours (46 per cent), a promotion (33 per cent), and less pressure (25 per cent).

Linda Barrington, labour economist at The Conference Board, said she was surprised by the number of people saying they wanted to retire because they weren’t valued at work. “To have a quarter of the respondents not feeling respected was startling,” said Barrington.

“When people say that training, or telecommuting or flexible hours might keep them from retiring, that means they’re not so turned off of work that they’ve made up their mind. It seems that a lot of people are saying, ‘maybe if I was a bit more valued, I might stay a bit longer.’”

Organizations may be tempted to feel complacent about this issue because, with a flagging economy, they’re not noticing a skills shortage, she said.

“Our answer to that is, you may not be feeling the pressure right now, but this is the time to be planning. When the economy picks up, and people’s pensions rebound and they have worked a few more years, then they would really be ready to go. So what we may be seeing is a bottleneck, but it’ll be followed by a big retirement wave.”

She said organizations should take a good look at their workforce and do a profile of retirement risks. Assessing the risk may be more difficult than it looks, because looking across the organization, managers might not recognize pockets of risks.

“A big company that has different divisions, different subsidiaries may have pockets of risk that they don’t even realize, because they may have taken over a company in a region that had a slow down and just hasn’t expanded in the last decade,” said Barrington. “So companies need to look across all their operations and say what divisions do we have retirement risks, and in what functions? Do we have whole levels of middle managers who were downsized 10 years ago and we haven’t ever built up the pipeline, so that we have a cohort that’s moving out and no one coming up to replace them?”

To read the full story, login below.

Not a subscriber?

Start your subscription today!