How to Guide: Retain Older Near Retirement Employees in Workforce to address labour shortages
24 December 2024
Retaining older employees who are nearing retirement is a strategic approach to addressing labor shortages. Here’s a guide based on a StatsCan survey and various studies, including solutions to potential barriers:
- Offer Part-Time Transition Options
StatsCan Survey Insights: 55.1% of employees expressed a desire to prolong working lives with part-time options.
Implement Flexible Hours: 48.9% would continue working with fewer hours if they had the option without affecting their pension. - Reduce Job Stress and Physical Demands
Adapt Roles: 43% of employees would stay if offered less stressful or physically demanding jobs. - Provide Interesting Work and Upskilling
Career Enrichment: 37.6% consider extending careers for more interesting work, including upskilling or reskilling or redeployment - Financial Incentives
Pay Raises: 34.2% cite a pay raise as a motivator to remain in the workforce. - Health and Disability Accommodations
Support Health Challenges: Accommodate health-related issues and disabilities, as these often lead to early retirement. - Foster Workplace Integration
Combat Exclusion: Address exclusionary behavior and bullying, especially prevalent among employees aged 55+. - Continuous Training and Opportunities
Invest in Training: Offer training in new technologies and skills, countering the trend of fewer career conversations and training opportunities for those nearing retirement. - Semi-Retirement and Consultancy Roles
Flexible Work Arrangements: Bring back retirees on a part-time, semi-retirement, or consultancy basis.
Only 25% of Canadian employers offer semi-retirement despite the growing number of retirees and labour shortages
Among companies offering semi-retirement, 33% reported an increase in the number of employees choose semi-retirement over the past 2 years, and 52% of employees who retired in the past 2 years were younger than 65, 27% younger then 60. - Address Financial Barriers
Tackle Income Support Program Claws Backs: Address issues with OAS, GIS, and provincial supplements that penalize additional income.
Pension Plan Adjustments: Ensure pension plans don’t discourage later retirement due to service credit accrual or earnings cap.
Employees cannot contribute to RRSPs after 71, eliminating benefits from continued employment. - Improve Working Conditions
Ergonomic Solutions: Use ergonomics to enhance working conditions.
Task Automation: Exploit automation to reduce physical strain.
Frequent Rest Breaks: Implement breaks to prevent fatigue. - Lifelong Training and Expanded Benefits
Continuous Learning: Provide ongoing training and learning opportunities, which usually exclude older workers
Enhanced Health Benefits: Offer comprehensive health benefits for workers aged 65+.
Private employer sponsored occupational pension plans can include subsidies for those taking early retirement and penalties for those delaying early retirement, both of which discourage continued employment - Case Study: BMW’s Approach
Technological Tools and Design: Focus on equipping older workers with technology and designing workplaces considering their needs.
Blended Work and Remote Options: Offer tech training and remote work opportunities, especially for those with mobility issues.
Pension Plans for Later Retirement: Encourage and reward delayed retirement with a combination of pension and work income. - Address Workplace Culture
Combat Age Discrimination: Actively address bullying and age discrimination.
Skill Development: Encourage continuous skill development.
Employment Assistance: Provide assistance for older adults in job finding.
By implementing these strategies, employers can effectively retain older, experienced employees, contributing to a diverse and skilled workforce while addressing labor shortages.
How to Guide: Retain Older Near Retirement Employees in Workforce to address labour shortages