By Chris Chipello
A research team led by Prof. Mary Dean Lee of the Desautels Faculty of Management has spent the past four years examining how attitudes and approaches toward retirement are shifting as the oldest Baby Boomers turn 65 and companies prepare for their exodus from the workforce.
Last year, the researchers released a study, based on in-depth interviews with 106 managers and executives from a variety of companies and industries across Canada, that shed light on how Baby Boom managers and corporate leaders are crafting their pathways out of firms and forging new models of retirement.
Now, the team has produced a second report, based on interviews with human-resource executives in 24 Canadian and Australian multinational companies operating in three sectors: natural resources, financial services and high-tech manufacturing. The study explores how these firms are preparing for the retirement of large numbers of experienced professionals and managers.
The Reporter spoke with Lee about the insights she and her colleagues have drawn from this unusual look at how big employers are adjusting their retirement regimes to changing attitudes and demographics.
Are Boomers changing the way we think about retirement?
They certainly are. That doesn’t mean every Baby Boomer who is retiring is doing things differently. But there is a substantial group of people who are not doing what their parents and the past generations were doing. For example, we found that there’s quite a high per cent that retire and then go back and work, either with their original employer, or for other employers, or in other sectors. In some places they call it “bridge employment” – the precursor to the real retirement, which occurs later.
One reason for this is that the retirement age for many years kept getting lower (though it’s going back up now, for many reasons). When people retire in their 50s, you might think you want to play golf five days a week, but the reality after you do it is: ‘Gee, this is a bit boring, I want to do something more meaningful.’ I would say a majority of the managers we interviewed expressed a desire to do meaningful work and make a contribution. Not all of them went to work to be employed for pay. Many got involved in the civic sector, the volunteer sector, but in a more substantial way than just a few hours a week.
What are companies doing about replacing an aging workforce?
This was another big interest of ours. We looked at a small sample of companies, in only a few sectors, so we have to be cautious about our conclusions. But I think certainly that the companies in the natural-resources area were a lot more concerned about the labour force shortages than the financial-services and high-tech manufacturing sectors. One reason is they had a sort of hiring freeze back in the 80s or 70s. So Baby Boomers may account for 45 per cent, 50 per cent of the workforce – in one company it was even 55 per cent. That’s a huge percentage of your workforce to try to replace – especially if there are not Gen-Xers behind them.
And there are certain sectors where there’s a worldwide shortage of expertise. So companies are very much concerned not with getting people out the door in a timely fashion, but just the opposite: How do we convince people to stay a bit longer? What kind of terms can we offer people to continue some kind of involvement that will benefit us as well as them?
How is the shift to defined-contribution retirement plans affecting employer-employee relationships?
We probed companies on that topic quite a bit. Most were very much defending their decision to get out of defined-benefit pension plans. It’s very understandable, based on many societal and economic factors. But it didn’t seem that many of them had thought more deeply about how that way of caring for people in a long-term sense – that they give their
lifeblood to the company and they’re well taken care of – was integral to a certain type of relationship between employee and employer. Some would call it paternalistic, some would call it just a very caring culture. But whatever you call it, it’s disappearing, and the thing that’s definitely disappearing is the defined-benefit feature of what happens after you retire.
I think firms are going to be caught a bit short if they don’t give some thought to the effect that that could have on the bigger picture of the employee-employer relationship. There are other ways to build that feeling of mutual benefit, other than based on money and retirement – but they have to be intentionally pursued.
How are firms adjusting retirement arrangements?
Some firms were taking a new approach. Many had undertaken surveys or focus groups with their employees over 45, to say – ‘Hey, what do you want? How can we change what we’re offering in a way that would be appropriate? Several companies were engaged in something called “career conversations” – and they actually had training programs with their managers to carry out these kinds of dialogues.
This is a very tricky and sensitive topic, because if your manager starts asking you to talk about what your thinking is about retirement, you’re worried that they’re going to take advantage of whatever you say. If you say, ‘Well, I don’t think I ever want to retire,’ or ‘I’m thinking about it soon,’ that they’re going to jump to maybe demoting you or passing you by for a promotion. So the idea is to find ways to communicate that the firm is really open to discussing ways that people might want to pursue their late career.
Can you give an example?
In one of our banks, there was a manager who was getting close to 60, which was pretty much when people tend to retire in that bank; but his manager knew he had elderly parents living up in northern Quebec who were not well, and that he had been taking more vacation time to go up there and see about their well-being. His manager said, ‘If you wanted to move up there and work remotely, we’d be willing to talk to you.’ This fellow was approving small-business loans, and was very good at it and had mentored many other junior people in the Montreal area. He had a lot to offer as a mentor for junior staff in that northern location, as well as continuing what he was doing.
At first, he wasn’t too keen to talk, but gradually they worked out a deal where he was able to move up north, and worked more like four days a week for a year or so and then gradually over several years went ahead into full retirement.
We heard many, many stories from the companies that were trying to think out of the box and be open to different arrangements.
Where will you go from here with your research?
Two things intrigue me. One is that some of the companies have done surveys looking for ways to keep employees engaged, and a surprising finding was that late-career employees were the most highly engaged of the whole workforce. That means these are very valuable employees.
Another thing is that these companies found their late-career people want to continue to grow and develop. This whole idea that they’re finished or no longer driven is just not the case. This resonates with some other work I’ve done. I’m really thinking about my next study going more in depth on that subject. If it’s true, there’s enormous opportunity for this huge cohort to make a contribution that’s not being realized at the moment. That could have so many benefits to society.