National Post – Toronto – Tuesday, May 9, 2006.
More Canadians may soon be working from their homes -- their retirement homes. Like it or not.
Whether they start their own business, consult or commit full-time to corporate life, thousands -- and possibly even millions -- will be re-entering the workforce in their golden years.
As a matter of fact, it's already happening. Almost 25% of people who retired between 1992 and 2002 at the age of 50 or older went back to some form of paid work, and another 4% said they looked for a job but hadn't been able to find one, according to a 2005 Statistics Canada study. Financial concerns were by far the most common reason for returning to work and were cited by more than 33% of survey respondents.
"The whole concept of 'Freedom 55' -- that people hit 55 and they're going to head straight into retirement -- simply isn't based in reality," says Barry Witkin, the national director of Prime50 Employment Services, a human resources consulting firm and employment service for people aged 50 and older, which was recently acquired by Drake International. "People want to work and, in some cases, people have to work well past when they are eligible for retirement. That's the way it is and that's the way it is going to be."
According to Canada's Urban Futures Institute, almost 10 million Canadian Baby Boomers are approaching retirement and, by 2020, the number of Canadians retiring each year will exceed 400,000. The question is: Will it really stick? While many people will either be unwilling or unable to retire even if they want to, at least now most won't be legally forced to do it.
Province after province is retiring mandatory retirement, and Ontario hopped on the anti-mandatory retirement bandwagon just last year. Last December, the Ontario government brought in The Ending Mandatory Retirement Statue Law Amendment Act, which ended the right of employers to require employees to retire at age 65.
In Canada, labour laws do not specify a retirement age for employees, although some exceptions exist for professionals such as airline pilots, military personnel and judges.
Three provinces, however, have human rights codes that place an age limit at 65, so beyond that age, the code does not apply in those jurisdictions. In British Columbia, Saskatchewan and Newfoundland, this limitation effectively allows for mandatory retirement because an individual cannot contest a policy that requires an employee to retire after reaching the age of 65.
While many people may not be in a position to retire, mandatory retirement does appear to shove some willing workers out of employment. A recent Statistics Canada survey found that more than one in 10 retirees would not have retired if mandatory retirement policies had not been in place.
Even organizations that do not subscribe to mandatory retirement, however, are not doing a very good job of recruiting or retaining mature workers, says Sarah Welstead, founder of the Toronto-based Retired Worker. "Companies may say they value their older workers but I really don't think many of them are showing it or are doing anything about it," Ms. Welstead says. "If they were, there would not be so many people looking for work after retirement."
Many companies are finally picking up on these trends and investing in their workers aged 50-plus in an effort to aid retention and improve workplace diversity. They are even beginning to push aside some stereotypes and hire older workers. "We expect that by now, most companies are starting to address their potential labour shortages as the workforce ages and are re-examining the myths and misconceptions regarding the mature worker," says Eric Vengroff, the Canadian Association of Retired Persons (CARP) vice-president of marketing.
One of Mr. Witkin's favourite topics just happens to be myths and misconceptions, of which he says there are plenty. He says employers are often reluctant to hire or keep older workers, for example, because they feel they will be "expensive." But more than 80% of job seekers aged 50 or older are actually willing to take a pay cut, according to a 2004 Prime50 survey. The same survey also found that 78% are prepared to work on contract with no benefits or pension obligations. Mr. Witkin says he has found a niche hiring older workers and then hiring them out on a contract basis to buffer employers from these costs.
He says employers also worry about the expense of investing in older workers just to watch them turn around and retire. On average, however, workers between the ages of 45 and 54 stay on the job twice as long as those between 25 and 34, according to a 1998 report by the U.S. Bureau of Labor Statistics.
It's one thing, of course, to lose someone to retirement and then rehire them or someone else of equal experience, but many instead are working hard to retain these individuals longer. The Royal Bank recently earned a Best Employers Award for 50-Plus Canadians from CARP along with several other companies, including The Home Depot Canada and Avis Rent A Car. Programs such as phased retirement have contributed to the Royal Bank's success with older workers, but Gary Dobbie, Royal Bank senior vice-president of human resources, says retaining older workers is simply an added benefit to being an employer of choice.
"We don't need to bribe people to come to work," Mr. Dobbie says. "They come and they stay because they want to, because we keep them engaged and offer a supportive environment. We have many people who stay with us well into their 70s."
Whether phased retirement packages could be considered a bribe, incentive or show of "support" is not the point. The point is that is a good strategy. So is offering flexible work hours, as do many employers including another CARP award winner, Merck Frosst Canada. About 15% of employees at Merck Frosst are 50 or older.
A Statistics Canada survey found that more than 25% of people who retired between 1992 and 2002 would have continued working had they been able to reduce their work schedule, either by working fewer days or shorter days without their pension being affected. Similarly, 28% would have continued working if they had been offered part-time employment.
People will simply have to revise their vision of Freedom 55, experts say. Instead of sharing a glass of champagne on the boat to toast their retirement, they'll just have to tote home a sof drink from the vending machine on the third floor to toast their flexible work schedules and a darn good dental plan. Dare to dream.
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