How to add 1 million workers to a job market characterized by shortages
As we grapple with labour and skill shortages in the near term along with slowing labour force growth over the longer term, part of any comprehensive strategy has to include encouraging workers who are nearing retirement to remain attached to the job market.
Too often we ignore the invaluable knowledge and hard-earned experience that these workers possess. We also often overlook their sheer volume in terms of numbers (small improvements can go a long way). Take the case of Canada, for instance. For workers over the age of 60, Canada’s employment rates are near the middle of the pack among OECD countries. That means there is considerable scope to improve the employment prospects of Canadian workers in, for example, the 60 to 69 age bracket.
Experienced talent is all around us
What would be the impact if we were able to raise the employment rates of workers in Canada aged 60-69 to the 3rd highest in the OECD? Employment among women in this age group would be lifted by nearly 450,000 with sizeable boosts across all provinces (a similar scenario for men adds an additional 550,000).
Raising employment rates to this level, while not overly ambitious, is not necessarily desirable nor attainable. Nor is it a panacea for addressing present or future challenges (in any case doing so would take time). However, efforts in this area would certainly make a significant contribution to a comprehensive labour market strategy. Let’s not kid ourselves – the reality of population ageing and the presence of labour and skill shortages are not going away anytime soon. Truth is, many in this age category would prefer to remain employed, but often face multiple barriers and constraints to doing so.
Why not start now to seriously think about ways we can facilitate and encourage workers approaching retirement to remain in or return to employment? The proposed suite of measures often included a mix of carrots (e.g. extra benefits, as is the case now, for CPP) and sticks (e.g. linking pension age to longevity). Maybe a preferred and more palatable strategy is to simply focus on the former by placing greater emphasis on the value and experience that these workers bring to our economy and society.
Policy and research considerations
What are 3 (of the many) things we can do?
1. Allow for greater flexibility in hours worked to foster a slower, and longer, transition to retirement (while being mindful of the overall net effects).
2. Make it easier to work and draw a pension. This will also help with point 1.
3. Let’s get serious about mentoring. There are tremendous opportunities for the transfer of knowledge (in both directions).
A report last year prepared by colleagues for the FPT Ministers for Seniors is also packed with great ideas.
FYI: Among women aged 60-64 and 65-69, the 3rd highest employment rates in the OECD are found in Korea and Sweden respectively (for men, it’s Iceland and New Zealand).