Thank you, Madam Chair, and thank you, everyone.
Good afternoon. I am delighted to be here.
I am very pleased indeed to discuss what I consider to be a critical issue, an issue that too many organizations have for too long been too slow to respond to, and that, of course, is the aging of our population and ultimately the implications of that trend for public policy-makers, for our communities, and for organizations across the country.
I congratulate this committee for focusing on this issue as it relates to the federal public service, and I was honoured to be asked to appear before you. In preparation, I read with interest some of the previous testimony provided to the committee and noted that some members were struck by what appeared to be, at least on the face of it, varying points of view regarding the demographic challenge facing the public service of Canada and/or its ability to respond to that challenge in a timely fashion.
My view, with all due respect, is that the federal public service will face some serious problems in recruiting and retaining people with the skills it needs now and in the future. I will tell you why I hold that view. As we all know, or should know by now, our nation is greying. I know that when I look into my husband's loving eyes every morning and see my grey hair reflected back at me. I'm getting older; so are you, and so is Canada.
Currently our median age is about 39, and Stats Canada, as you know, is projecting that we'll reach the ripe old median age of 44.3 by 2031. The reason we're aging, of course, has everything to do with low fertility rates, rates that remain below the level necessary to replace our population—and there is no evidence, ladies and gentlemen, this is going to turn around.
Consequently, the proportion of our population aged from zero—that is, newborns—to 14 will decline, and the proportion of older Canadians 65 years of age and over will increase, to the point in the not-too-distant future that the aged will have a bigger piece of our population pie than the very young. For example, currently Canadians aged zero to 14 make up about 18% of our population, and those who are 65 and over are about 13%. By 2031, according to Stats Canada's medium growth scenario, almost one in four Canadians, or 23.3%, will be 65 years of age and older, and only 14% will be in that younger age category.
As a consequence of lower fertility rates and larger numbers of deaths as people enter the oldest of the age cohorts, our population growth will slow from about a 1.4% compounded annual growth during the years of 2001 to 2005, according to my alma mater, the Conference Board of Canada, to less than 1% over the next two decades, and labour force growth is also projected to wane. So what?
One challenge, of course, is that other nations, such as Japan, France, Germany, Spain, Italy, Greece, etc., are aging at a faster rate than we are. The median age in Germany and Japan, for example, is over 42 now; in fact, Japan, Germany, and Italy are all at zero population growth. Demographers across Europe are predicting population declines throughout that continent.
This means, obviously, that the race for talent—which we all know is already fast paced in some regions of our country, particularly, and for some occupations—will heat up and will become even more global than it already is. China and India are already recruiting in Canada, and so is Australia, the United Arab Emirates, the U.K., the United States, and other countries. This could translate into more losses of Canadians as they emigrate or work offshore for longer periods of time. In this environment, recruiting people and retaining and continuously developing them are critical must-dos, not only for the nation, but also for organizations.
Within Canada, as I've noted, we already know the skills race is on. No matter what survey or what organization one looks at, the story line is the same: many organizations are finding it difficult to find, get, and keep, and keep motivated, the staff they need to run their businesses. For example, the Bank of Canada surveys 100 employers every quarter to tap into organizations' perspectives on a number of items relating to their business health and well-being—the Business Outlook Survey—and one of the questions asked in that survey relates to skills shortages. In the most recent survey, 41% of these employers reported that skills shortages were restricting their ability to meet demand.
Similarly, for the past several years, the Conference Board has asked employers about their experiences in recruitment and retention. Last year, almost three-quarters of employers surveyed noted difficulties in these areas, up from 67% the previous year and 49% of employers the year before that.
Turnover rates in many organizations are also increasing. We hear from some consultants that as many as 57% of Canadians, while not actively looking, are open to leaving their current employers, and 15%, at any given time, are actively looking or they have made changes to leave.
Ladies and gentlemen, the fact is, given our current demographic picture, this pressure will only heighten as time moves on. By 2010 or 2011, the shortages of labour will intensify as larger numbers of baby boomers begin to retire or slow down their involvement in the labour force. One of my ex-colleagues at the board, at a recent Conference Board conference I chaired, said, “These are the good old days”. That phrase has stayed with me. In fact, many argue that what's happening in Alberta and B.C. in terms of the skill shortages is only the canary in the mine, or case studies for what the rest of us will experience over the next few years.
On the aging front, you've heard testimony that the federal public service is aging. This is a fact. So does the Public Service of Canada have a problem? While admittedly I don't have access to statistics from the Public Service Commission or other agencies, I do pause when I see the results from the 2005 public sector employee survey. In that survey, 30% of federal public servants overall, 45% of executives, and roughly one-third of the technical, professional, and scientific staff responded that they're planning to leave the public service within the next five years. The number one reason for leaving is retirement. This, coupled with the fact that other governments and private sector firms, again both within and outside of Canada, will continue and will intensify their efforts to recruit talent, suggests to me there is a problem and there will be more challenges ahead.
A few years ago my colleagues and I at the Conference Board of Canada conceived of and launched what I think is, to this day, the most comprehensive study of recruitment and retention issues in the public service, in all three levels of government in this country. I want to take a couple of minutes to share with you what we did and what we learned, because I think it's apropos to the conversation you're having.
First, what did we do? We surveyed all three levels of government across the country, municipalities, departments, and agencies of every province and every territory, and departments and agencies in the federal government. We wanted to learn from them the scope and breadth of the challenges they were facing in terms of skill shortages and learn about the actions they were taking, or not, quite frankly, to prepare for future skill challenges.
We also spoke to about 112 people in focus groups; that is, we spoke with students about their dreams and about their aspirations and what they were looking for from their employment, and about their job destinations, and we spoke with public servants working in all three levels of government about what attracted them to the public service, about what kept them there, what kept them motivated, and about what would drive them out. We also asked, by the way, both students and employees to provide us their advice or to share their views on what governments could be doing to close skill gaps and better prepare for the future.
The results of our study were released in a 2002 report entitled Building Tomorrow's Public Service Today: Challenges and Solutions in Recruitment and Retention. By the way, I'm often asked, still to this day, to speak to that study. I think it's quite relevant, and quite relevant to the committee, if you haven't seen it—she said, quite proudly, nonetheless.
Here's a bit about what we learned, interspersed with more recent information.
First, at the time of our survey, the average age, for those who could tell us—and not everyone could—across all levels of government, was 43.5 years of age. In the federal government overall at the time it was 43.4 years of age. When one drilled down and looked at the data in the federal public service, particularly at the management levels, we saw some disturbing trends, and your own data I think support this. Then the average of the senior management or executive cadre was about 50. The next feeder group was about two years younger than that, and the next feeder group, only one year younger than that.
The average age of retirement across all three levels of government was 58.3 years of age—57.9, so roughly the same at the federal level. Using this figure as a base, governments across the country predicted that by December 31, 2010, they could potentially lose 44% of their staff to retirement. Of those who put out our fires, those who check our water, those who police our streets, those who take care of policy, 44% are due to retire. As I recall, this figure was higher among the federal government departments, but I'm sorry, I don't have that data with me.
Let me also say that these figures may have been higher than what has actually occurred subsequently.
At the time of our survey, many governments, including the federal government, simply didn't have the capacity or the knowledge to make that kind of prediction. Nonetheless, more recently, as facts and figures are being released from various jurisdictions, the picture is, and should be, one of concern to this committee.
For example, at a recent conference I chaired on human resource issues in the public sector, we heard from my home province, the Province of New Brunswick, that within five years, 34% of senior executives, 20% of aspiring executives, and 20% of that province's civil service overall would be in a position to retire. Within 10 years those numbers grew substantively to 63% of senior executives, 44% of those aspiring executives, and 40% for the civil service overall.
We heard from British Columbia. By 2015, the B.C. government is projecting that 45% of managers and 35% of bargaining unit employees will retire from the public service in British Columbia. The numbers are higher for deputy ministers, about 57%, and for ADMs, 63%. The deputy minister of the B.C. Public Service Agency indicated that the current age of retirement from government jobs in B.C. is 55, and people do go, in this province, at age 55.
So other jurisdictions are also providing similar statistics.
I was at a panel with young professionals in the public service across all three levels of government in March of this year in Toronto with the Ontario Provincial Police. The individual who presented provided some very disturbing statistics, and I want to give those to you as well. In the OPP, by 2009, 91% of chief superintendents are eligible to retire, 78% of superintendents, 55% of inspectors, and 47% of staff sergeants.
So the federal public service is, and will be, competing with these and other organizations for talent, there's no question. The 900,000-plus résumés processed and the 19 million-plus hits on the federal government's website won't guarantee the federal public service a smooth ride in the talent wars ahead.
In this context, I should also mention that in our study on almost every question relating to recruitment and retention, respondents from the federal government sector were more likely than their counterparts in the provinces, the territories, and in the municipal sector to report having challenges, difficulties, or problems in these areas. They were more likely, and often significantly more likely, to indicate having challenges.
By the way, within the federal government departments and agencies surveyed, they were most worried about their ability to recruit and retain professional, technical, and scientific staff and senior managers and executives. I believe this is still a concern five or six years later.
In our study, we learned from governments across the country that the top recruitment challenges they face, that is barriers to recruitment, were in order of importance: compensation—that is, they were concerned and of the view that they could not compete with the private sector on wages. The image of the public sector is of a slow and bureaucratic place—by the way, both students and employees also spoke to this—and, ultimately, slow recruitment practices.
Responding federal government departments and agencies reported a variation on this theme. That is, they noted their top challenges in a slightly different order, and I think you'll be interested in them. The first two were staffing and recruitment practices and speed of decision-making, the top two barriers to recruitment. The third was the image of government as an employer, and compensation came in as number four.
Indeed, time to hire was a much larger issue for federal government departments and agencies than for their provincial, territorial, and municipal counterparts. For example, it took over double the time to hire staff at the federal level than at the municipal level. Federally, we were told that on average it took 14 weeks for organizations to fill positions—much longer, by the way, for executives and for middle managers, supervisors, and entry-level professional staff. So 14 weeks versus 6 weeks for municipalities versus 9.8 weeks for the provinces and territories.
At the time we were analyzing the results—because actually I thought 14 weeks was quite low, given what I'd been hearing around town in having conversations with people and looking at this issue for some time. We did ask some colleagues in the federal public service what they thought of these numbers, and they felt the number of 14 weeks to hire was in fact significantly understated.
More recently, at that conference I mentioned I chaired, we heard from some people in the federal public service that the time it takes to hire someone into the service hasn't gotten any better, not any better at all. In one department, as an example, they took well over a year to fill a very significant position. Again, ladies and gentlemen, this isn't good news, particularly since, as I've mentioned, the federal government will be competing with private sector firms, with other governments, both within and outside our country.
In our study, we learned from students that they wanted or needed a high-touch courting process, not the long and onerous waiting game they endured, and still endure in some cases. They spoke about tedious and boring websites and complicated applications processes. They told us that making promises without delivering on them was folly, that everyone says they're an employer of choice. What counts is what happens when they get on the inside. Here, the work environment and the quality of management counts.
Students in our focus groups—actually almost any study you read these days says about the same thing—were looking for challenging work, interesting work, growth and advancement opportunities, fair pay and good benefits, and they were looking for job security, which surprised many people at the time. While compensation wasn't number one on their list, let me say it was important to them, and it's important not to underestimate the value of compensation and benefits to students. StatsCan recently released some data, for example, that suggested that students graduate with a debt load of somewhere around $37,000-plus.
When I look at the most recent federal public service employee survey, I see that over one in five, or 22% of the youngest people in the public service, those aged up to 29, reported planning to leave the public service within the next five years. The top four reasons were to pursue other employment opportunities, to make better use of their skills and training, to return to school, and, interestingly, because of workplace difficulties.
A brief word about the views of public servants in our focus groups. In our study, employees across all three levels of government told us the challenge, the diversity of opportunity, and learning and development opportunities as well as job security were key advantages of employment in the public sector. Further, they told us that they, too, like to be valued, rewarded, and recognized for what they do. They told us of the importance for their organizations, whether that was a city, a province, or a federal government department, to leverage the know-how and know-who of older workers in the recruitment and retention practices.
I'm going to skip over a lot because I know I have about 30 seconds left.
To conclude, I do believe that the challenges facing the federal public service are quite significant but not insurmountable. In reading the testimony provided earlier to this committee, it's clear that there are several activities under way that attempt to ensure that the public service has the people with the skills and talents it needs now and in the future in order to serve Canadians well.
However, I would also say that change in this place seems to take quite a bit of time. In other words, it's one thing to have a plan or a vision and it's quite another to implement it quickly, efficiently, and effectively. As one of my previous bosses once said to me, “Judith, vision without implementation is mere hallucination”. I see one of the key challenges is speed. I think that's very important.
I also see, and have seen over the years, a challenge, quite frankly, in commitment from political leaders in staying the course on positive change and in helping to sell the public service as a viable, exciting, and challenging career choice. The public service writ large has taken major hits in reputation. Stories of wrongdoing are spread across the newspapers. And the reputation of the organization is a factor in recruitment and in retention. According to Towers Perrin in their 2006 global workforce study, in Canada it plays a particular role in keeping employees fully engaged with their work.
The good work, the excellent work, of the clear majority of people in the public service goes virtually unsung by the public itself and by their political masters. In this, I would argue, you and your colleagues have a major role to play, and that did come through very clearly from all three levels of government in our work.
I will conclude with that, and thank you for the opportunity. I know I didn't get to a lot of solutions directly or explicitly, but I hope some implicitly, and I hope to be able to answer any questions you may have.
