Budget

Eds:With vars BC-Census. Moves Business and General, please guard against duplication

See Photo

INDEX:Business, Finance, FinServices, Labour, Retail, Social

HL:Employee shortage predicted as boomers slide into retirement: census

By David Friend

TORONTO (CP) Canadian businesses could be slammed by an employee shortage as baby boomers hit retirement age, which will leave some corporations begging staff to stay while some financially unprepared workers realize they can't afford to say goodbye.

More workers will leave the country's labour force than enter it within 10 years, Statistics Canada predicted Tuesday as it released the latest figures on aging from the 2006 census.

That could mean a dearth of experienced workers on the job as the baby-boomer brain drain hits its peak and too many people retire.

The first wave of boomers entered their 60s last year, and some will head off into retirement sunset. But financial planners suggest that more and more will be forced to stay in the workforce simply because they can't afford the cost of living.

Chalk it up to better medial care, technological innovations or just healthier living but Canadians are surviving longer than ever, Statistics Canada says, and, for some, better health means they will outlive their money.

Combine extended life expectancy and children staying at home longer and suddenly it seems as if baby boomers are under siege, said David Cravit, vice-president of marketing at the 50 Plus Group, the online arm of the Canadian Association of Retired Persons.

"It's a tsunami of all these different forces. It's a very real problem," Cravit said.

"We're travelling, going back to university, there's all this stuff I can do. I'm in better shape than ever before. There's this wonderful opportunity I'm actually redefining aging in a positive way, but yikes, do I have enough money to do this? It's a very split verdict," he said.

The 2006 census found we're living longer than ever before. More than one million Canadians are 80 or older, about 3.7 per cent of the population.

The number of Canadians living beyond 80 is up by one-quarter since 2001 and the number of people living to 100 rose by 22 per cent.

A study released in June by the University of Waterloo found two-thirds of Canadians in their early to mid-40s will struggle to meet basic household expenses in retirement unless they boost their savings rates or work past the age of 65.

Soon enough, both retirees and their former companies might need to lean on each other to serve their needs, a move that could give the Canadian workforce a facelift.

Liz Wright, an expert in compensation for global consulting firm Watson Wyatt, said the change could be welcome, since many older Canadians aren't yet ready to settle down into a life of quiet contemplation.

"I don't see the boomers necessarily doing what their parents have done . . . toiled away many of their lives and are basically in the rocking chair, so to speak. That's not where the boomers are at. I think as long as their intellectual and physical capacities are there, they will want to carry on," she said.

"From a knowledge standpoint, there is so much in the brains of these boomers that you don't want to lose that for the next generation. Corporate Canada today needs to start realizing that."

Many of Canada's biggest companies are still sitting on the sidelines instead of crafting a plan to combat the aging workforce problem, Wright said.

A study to be released by her firm this fall suggests that only about 3.2 per cent of nearly 100 companies surveyed believed they were taking steps to manage the workforce requirements that will develop from the huge transition of workers to retirement.

The surge in boomer retirements has attracted the attention of governments across the country, with many provinces making quick moves to quash forced retirement at 65.

Ontario, Manitoba, Quebec, Alberta, Prince Edward Island Yukon and the Northwest Territories have all banned mandatory retirement, while Saskatchewan and British Columbia are planning to do away with it by the new year.

Bank of Canada governor David Dodge has recently voiced concern over how the aging Canadians rushing out of the workforce could seriously challenge the country's economic growth and boost inflation and interest rates.

Wright said the Watson Wyatt study found that a handful of businesses have started tweaking their human resources system to accommodate older workers.

"Companies that have very flexible work arrangements are very attractive to employees and organizations are also recognizing that this helps from a productivity standpoint," she said.

"This helps the boomers because, as they get older, they'll need help with their own flexible work arrangements."

Royal Bank (TSX:RY), considered a leader in dealing with the retirement quandary, is attempting to soften the blow to its internal operations through a job-sharing program that eases longtime employees into retirement, rather than just cutting them off.

The hope is that, instead of sending retirees off to sandy beaches with years of experience, they can use their knowledge to train replacement workers.

Norma Tombari, senior manager of diversity and workforce solutions at the bank, said the program has found success with many new workers who are juggling their own lifestyle challenges. In one case, a young mother was partnered with a soon-to-be retiree to help make a seamless transition, as well as accommodate the shorter work week both had requested.

Tombari said the setup let the young mother care for her child and the retiree work a schedule that was more relaxed and convenient.

"When you have two people job sharing, it is a little more expensive because the organization is supporting benefits for two individuals. But the fact you have two individuals, the quality of service outweighs the negative," Tombari said.

Royal Bank estimates that about 1,000 workers are enrolled in some form of job-sharing program.

Large corporations seem to be taking the lead in accommodating workers at retirement age. McDonald's, Home Depot and Wal-Mart have all taken initiatives to hire more older workers.

Computer company IBM Corp. has made inroads by creating an on-call program for retired workers that pays them to work either part-time or whenever they're needed.

These efforts might only be putting a Band-Aid on a much bigger problem, suggested Terence Yuen, a research economist at Watson Wyatt. He said even if more older workers keep working, it still won't compensate for the number of people retiring.

"All of the discussions seem to suggest that if we encourage more older workers to stay in the workforce then we would be fine, but in fact this is not true at all," he said.

Yuen suggested that means the problems we're predicting today could only be the start of a longtime shake up of the Canadian workforce.