How Companies Can Adjust to Avoid a ‘Boomer Bust’
For decades, baby boomers fueled Canada’s economic and corporate growth. But now, the generation is leaving the workforce—in droves. As they retire, what could follow is an economic slowdown, strains on healthcare and pension plans and a shrinkage in the labour force, experts say. To counteract these effects, Canadian employers need to find a way to retain their aging employees.
“A lot of companies are starting to wake up to the risk, and realize their need to hold onto senior workers,” says Chris Farrell, author of Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community, and the Good Life.
Back in 2015, an estimated 250,000 baby boomers retired each year. Over the next few years, retirement rates for the age group will nearly double, reaching 400,000 annually, as reported by The Globe and Mail. To hold on to older workers, Farell argues flexibility will be key. Companies need to consider offering flexible hours and part-time work to their senior employees.
“The theme of workplace flexibility is only going to grow in significance and power across generations,” he says. “People want to work but also need that flexibility built into their schedules.”
Many companies are looking at ways to attract boomers as employees. McDonald’s recently announced plans to hire 250,000 new employees over the age of 55 this summer through a partnership with the American Association of Retired Persons (AARP). It’s a move partly driven by a shortage of a younger workers—a challenge also faced by Canadian employers.
But hiring older workers isn’t just about filling a gap in the job market. As more baby boomers trickle out of the job market from positions of seniority, they take with them their skills and experience.
“There are certain areas and professions where we’ve failed to train younger workers adequately,” says David Dodge, a former director for the Bank of Canada who studied economic and demographic trends.
While employers have historically relied on immigration to fill these spots, Dodge says the “end solution” should be training the next generation of employees.
Parisa Mahboubi, senior policy analyst with the C.D. Howe Institute, says training and recruitment programs will help equip the post-boomer generations with the skills needed to be as successful as their labour force predecessors. These training programs also allow senior employees to upgrade their skills and stay relevant. Mahboubi warns most employers haven’t yet provided these resources in way that leads to a “meaningful impact.”
For that reason, Mahboubi favours a multifaceted approach to address the boomers’ retirement. In addition to retaining senior employees and training new ones, she says maintaining a healthy stream of immigration and reducing barriers for marginalized groups to enter the workforce are also needed.
“There is no one solution to mitigate the impact of an aging workforce,” she says. “But each solution contributes to a certain extent.”
Yet implementing these pre-emptive measures takes time and planning. And according to experts like Dodge, Canadian companies have been slow in addressing the risks to inevitably accompany the impending boomer bust: “I wouldn’t call it a disaster, but we’re not doing as well as we should be.”
Still, as employers plan to counteract these risks, they should bank on having some seniors sticking around. “The notion that you would go to school, work hard for 30 years, then retire just doesn’t exist anymore,” says Farrell.
Now that people live longer and healthier lives, many seniors are staying in their cubicles longer. At the age of 77, Keith Ambachtscheer sits as director emeritus of the Rotman International Centre for Pension Management, a research-based company. (He forfeited his previous role as director when he was “only 72”.)
Ambachtscheer also acts as president of KPA Advisory Services, which he launched in the 1980s. These days, he’s working on the company newsletter, writing 2,000 words each month, just like he’s been doing since 1985.
“With jobs like mine, there really is no such thing as retirement,” he says, chuckling. “I just go from one thing to the next.”