Employers should consider the needs of different generations in their HR programs.
As the baby boomers approach retirement, employees are becoming immensely important to employers. Unfortunately, in the current market crisis, we don’t need as many of them right now. The last recession lasted just over 2 1/2 years, and our current financial state is predicted to last for 12 to 18 months. But employers must not lose sight of their employee bases in the meantime.
This recession is different from previous recessions, as we are no longer in a buyers’ market for labour with an abundance of good people and not nearly enough good jobs. The recession is preceding one of the biggest sellers’ markets for labour that we have ever had.
Why are we moving into a sellers’ market? In the ’60s and ’70s, women entered the workforce in vast numbers, causing a rift that we now know as work/life balance. Organizations dealt with the issue by informing women that it was their choice whether or not to have children—they knew that having a family was a career-limiting move.
How have Canadians decided to balance work and family? Most have cut out family from the equation. Demographics state that a stable population means 2.1 children per family. The last time Canada hit that number was in 1969. Now that number is 1.5 children. Women are also starting families later in life, once their careers are secure.
By 2016, annual population growth will be near zero and we will be in the midst of a significant labour shortage that is projected to last at least 25 years. Add to that the impact of the aging population. Within the next decade, for every two people who are retiring, there will be less than one person to take their place. Because younger people place a higher emphasis on work/life balance and are not prepared to sacrifice everything for their employer, for every two people leaving the workforce, we will actually need three people to replace them.
The labour shortage will also affect HR, pensions and benefits immensely. Organizations that are burning a lot of bridges today will find it difficult to recruit, attract and retain top talent once the recession has subsided. And the balance will have shifted—employees will be setting their own terms of employment.
Employers need to understand key generational differences in order to attract and keep good employees. What employees want from a job, what they want from their boss and what they will do if their organization or their boss does not deliver are all points for employers to consider. Employee engagement is not an issue exclusive to DC pension plans; it is important to the workplace as a whole.
A new employer/employee dynamic is emerging. The elements that attract people to a company—primarily, pay and benefits—are not the same things that will keep or engage them. Companies will have to focus on recruitment, retention of employees of all ages, succession planning, work/life balance and career development. As employees become more sophisticated consumers of employment opportunities, flexibility of retirement offerings and HR programs will also become increasingly important to meet the needs of a varied workforce.
Linda Duxbury is a professor at the Sprott School of Business, at Carleton University.
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© Copyright 2009 Rogers Publishing Ltd. This article first appeared in the April 2009 edition of BENEFITS CANADA magazine.