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Retiring baby boomers and the looming workforce shift
July 14, 2003
By Louise Chatterton Luchuk
Anticipating summer holidays and a step back from the usual work pace?
Perhaps this brings thoughts of what life after retirement could be
like? For 9.8 million baby boomers in Canada - those born during the
two decades following World War II - retirement will be a reality in
the next six to ten years. That means another soon-to-be reality for
their employers - a large exodus of skilled employees who will be taking
their years of experience and knowledge with them. What does this mean
for the nonprofit sector and what can we do now to start preparing?
Canada's aging workforce
It's no secret that we have an aging workforce. In 2000, workers aged 35 to 54
represented half of the workforce in Canada, compared to one-third of
the workforce 25 years ago. Specifically in the nonprofit sector, 39%
of employees were age 45+ in 1999. And these soon-to-be retired baby boomers,
because of their educational attainment and length of time in the workplace,
are often the ones holding professional and managerial positions within
our organizations. In fact, one-third of paid employees in the nonprofit
sector hold professional or managerial positions (as compared with only
10% in the for-profit sector). We are potentially poised for a major upheaval.
Consider your organization's composition. How will it be affected if skilled
employees with "organizational memory" retire from your ranks? How will
you operate without those skills and without the historical context and
information that long-term employees currently provide?
The lost logical succession plan
Stable, permanent positions within organizations are often filled by employees
in the baby boomer bracket. "The logical replacement for retiring baby
boomer managers would be slightly younger middle managers that had worked
up the ranks," remarks Lynne Toupin, director of the Developing
Human Resources in the Voluntary Sector (HRVS) project. "But due to
funding cuts in the recent past, most of these positions have been eliminated."
The even younger cohort, employees in their 20s and 30s, may not yet have
acquired the skills and/or organizational knowledge to effectively fill
the managerial vacancies. These younger employees often fill temporary
contract positions and move around from organization to organization.
So what can be done?
If we are going to be losing a critical and large group of employees, and their
replacements may not yet be fully groomed to fill the void, what are nonprofits
to do? The critical challenge for organizations will be effective recruitment
and retention, says Kathryn McMullen, the Canadian
Policy Research Network's (CPRN) senior researcher for the Work
Network - which specifically explores the cutting edge of labour market
and workplace change, including a research series on human resources in
the nonprofit sector. It will be important to recruit enough new employees
to fill the vacuum of vacated positions. However, as McMullen points out,
in the past couple of decades the nonprofit sector has benefited from
rapidly rising labour force participation rates among women. Participation
rates among women are now very high "so growth in the number of women
entering the labour market will no longer provide a readily available
recruitment pool," warns McMullen.
Attracting new talent
When baby boomers retire there will be much competition for talent to fill the
vacancies. It will be imperative that organizations understand what is
attractive to today's up and coming employees. "For instance," says
Toupin, "the younger cohort is attracted to portable retirement benefits
as well as training and learning opportunities. Younger employees will
need to be supported into positions of leadership." The aim of the HRVS
web site is to help organizations, particularly small to medium-sized
ones, to attract, support and keep skilled and committed employees by
providing practical HR tools and information. The site provides access
to legislation, policy examples, templates and plans (including a section
to be released at the end of the summer on retirement plans).
John Anderson, vice president of research at the Canadian
Council on Social Development suggests that employers look at more
gradual retirement options or retaining those over 65 years of age on
a part-time basis. These scenarios allow for the transfer of important
skills and organizational knowledge through mentoring between baby boomers
and their younger replacements. This might be just as important for the
retiring employee adds Toupin: "Baby boomers were the idealist of the
1960s and 1970s. They got involved in the nonprofit sector because they
wanted to make a difference. It is often difficult for them to leave,
especially if they were foundational leaders. It is incumbent upon us
to ease the transition to retirement."
If recruitment is important for finding the talent, equally important
will be retaining those new employees by following through with adequate
training budgets and plans for peer learning opportunities, mentoring,
etc. Retention will also be important in the short-term as Toupin relates
anecdotal evidence that the nonprofit sector is losing employees to the
private and government sectors - perhaps because employees in their 40s
are realizing that they cannot afford to stay on at nonprofit sector rates
of pay and with nonprofit sector retirement benefits.
A forward-thinking organization
Two years ago the Canadian Conference of the Arts,
the voice for Canadian arts and culture, embarked on a process to deal
with the fact that the pioneer generation of Canadian cultural managers
was approaching retirement age within the next decade. They were also
dealing with the immediate situation of losing managers to positions within
other higher-paying nonprofits or to the private sector. They knew that
the impending labour shortage and competition to attract skilled professionals
had to be addressed. "We wanted to raise the profile of arts management
that is behind the scenes while the artists are in the limelight" explains
Megan Davis Williams, national director. The result is the recently
released report Creative
Management in the Arts and Heritage: Sustaining and Renewing Professional
Management For the 21st Century, which includes 18 recommendations
to retain long-term managers and also to start recruiting qualified new
arts managers to prepare to fill the positions vacated by retiring baby
boomers. The action plan includes imperatives to improve and/or provide
workplace-based career development opportunities, such as internships,
professional development, and peer networking opportunities.
"There is a really big group preparing for retirement," concludes Anderson,
"and the effects will be amplified in the nonprofit sector." As he points
out - and as everyone involved in the nonprofit sector knows firsthand
- funding uncertainties plague the nonprofit sector and that makes long-term
planning difficult. But long-term planning is exactly what is needed in
anticipation of the looming demographic shift of large numbers of baby
boomers heading into retirement.
Louise Chatterton Luchuk is a freelance writer and consultant who combines
her love of writing with experience at the local, provincial and national
levels of volunteer-involving organizations. For more information, visit
www.luchuk.com.
