Human Resources Committee on June 4th, 2013

[The Chair, Conservative, Ed Komarnicki]

I call the meeting to order. We're still working on the study of opportunities for older persons in the workforce. We have with us today Barbara Jaworski, chief executive officer of the Workplace Institute.

Can you hear me all right?

[Barbara Jaworski, Chief Executive Officer, Workplace Institute]

Yes, I can. Thank you.

[The Chair, Conservative, Ed Komarnicki]

Good.

We also have with us Corinne Pohlmann, vice-president of national affairs, the Canadian Federation of Independent Business; and Louis-Martin Parent, senior policy analyst, who will actually present.

We'll start with you, Barbara. If you wish to, go ahead and make your presentation. We'll have both parties present, and then there will be a time for questions and answers.

We are starting late, and so we will quit a bit early. We apologize for the inconvenience, but we do want to hear from you, so we will have some questions. We'll extend over into the second panel for some time.

With that, my apologies, but go ahead, Barbara. You can start.

[Barbara Jaworski]

Thanks.

The Workplace Institute has been focused on older workers since 2004. We've been putting together the best employers award for Canadians aged 50-plus. We've been working with organizations to help them adapt their workplace practices to look at incorporating the skills, talent, and experience of older workers.

In my presentation today I'm going to talk about some high-level concepts that we discuss with employers and ways to help employers understand that there is a really great business case for continuing to employ their older workers, as well as recruiting them.

The first thing is really about linking them to the business strategy. What is their pressing business issue? So often it's about talent and management issues, such as having the skills for their workplace, and linking it to bringing value to the business. Turnover is often a big issue, and training younger workers who are coming into the workplace but often don't have the skills and experience they need to get up and running as quickly as organizations would like.

We've really identified to employers that there's this period of time between the ages of 50 and 80 that they really need to be considering instead of looking at the time between 50 and 65 as a time for people to be transitioning out of the workplace. Because of the repeal of mandatory retirement and the great health of many individuals, we're looking at the period of time between the ages of 50 and 80 that we call the “kabooming years”. It's a period of time where baby boomers want to continue to make a contribution and have an impact. There are many different ways that organizations, because their needs are different, can do that.

The first is really about engaging older workers. The number one way to do that is through flexibility in the workplace. All employees want flexibility, but it's a very important piece for older workers.

Everybody wants to have a career path until the day they decide they're going to leave the organization. Everybody wants to have training and equal opportunity to apply for positions until the day they leave.

There are adaptations in the workplace, such as when we worked with the construction sector to help them develop an older workforce tool kit that helped them understand that heated cabs and joysticks were a way to extend the working life of people who are doing physical jobs. In health care, we helped nurses work with orderlies or have more equipment so that they're adapting the way they're working and redesigning some of that.

Recognition is also very important for individuals in the workplace, especially for older workers. As well, it's a great strategy for not-for-profits, where there may not be other kinds of financial incentives.

Financial guidance is really important throughout a person's career in the workplace. We know that if they are not getting that kind of education, then in fact people may be staying much longer than they would normally have done. A lot of people are in the position of not retiring not because they don't want to but also because they can't. We don't want to get into those kinds of situations in the workplace.

Total health is also important, meaning the relationships that people have with their managers, their co-workers, their physical health, as well as their mental health—which is another focus for some organizations—and work-life integration. Just as younger workers might want work-life balance because of where they are in their life stage in parenting, older workers certainly are interested in that same thing, but maybe for different reasons. They don't necessarily want to work full time, or they have caregiving issues, or they want to explore different kinds of opportunities.

There's caregiving support in the workplace and cycling retirement, which is a little different from phased retirement, and what more organizations have looked at who have defined benefit plans. It's having the opportunity to be in the workplace but to retire and to come back into the workplace, and having meaning in your work.

Then there are a number of strategies that are important for organizations to consider. The first and most important one is workforce planning. It's really a risk management strategy to help them understand how to mitigate the risks of losing those individuals who are providing a great deal of value to the business goals that an organization may have.

In hand with that is succession planning. We know that only about 20% of organizations actually do succession planning and, of those, most of them are focused on the most senior levels in the organization. But the individuals concerned are not necessarily only ones providing value within the organization. In fact, we know that in many organizations and industries there are some key workers whom it's important to continue to have available, even for the training of younger workers. So we see strategies like engagement, recruiting baby boomers, adapting the organization and helping the generations to work together and learn from each other.

For baby boomers themselves, having a career path and helping them develop a professional passport are important, so that they are actually tapping into their strengths and using them to be able to contribute to the organization and understanding what their transferable skills might be to do other things, helping them to learn how to teach other people. We know that mentoring will be a big part of what older workers are going to be tapped to do, but it's not a natural process and people need to learn how to do those things.

Helping people to understand social media and the new ways we are communicating, including everything from Facebook to Twitter to LinkedIn, and understanding how those mediums are being used, is an essential social and workplace skill.

As for understanding how to create your life after work, that might involve starting your own business, or continuing to make a contribution to your community through volunteering and helping businesses to understand how to make links for people. People are sometimes afraid to leave the workplace, because they don't know what else is out there. Being able to link into the community may be very helpful and rewarding—or perhaps selling your services back into an organization or its competitor.

There are a number of key strategies that organizations can use. We have a process for that, so it's really important to structure opportunities to have a dialogue early on with older workers and to give them alternative work opportunities and transition planning. This will be a whole new way for organizations to innovate in the workplace, in the same way that we needed to innovate when women came into the workplace. Baby boomers, now aged between 50 and 80, are going to change the way workplace practices happen, integrating their initiatives into the diversity plans in the workplace. This is often where organizations already have a diversity plan, and developing an older workforce strategy is one place where they can do that, as well as establishing and supporting a connection to retirees.

We've actually presented to a number of organizations and government bodies about a customized video training and online resource tool kit that we have for employers to help them understand how to do this. It's really customizable for employers, and we're thinking that it will be really useful in targeted initiatives for older workers, organizations like Third Quarter, and other programs. We're not re-inventing the wheel. We know there's an issue about hiring and keeping older workers, and there are some very specific types of practices that would be really helpful to organizations in that regard.

That's my presentation.

Thank you.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that.

We'll now move to Monsieur Parent. Go ahead.

[Louis-Martin Parent, Senior Policy Analyst, Canadian Federation of Independent Business]

Thank you, Mr. Chair.

Hello. My name is Louis-Martin Parent, and I am a senior policy analyst at the Canadian Federation of Independent Business, the CFIB.

With me here today is Corinne Pohlmann, CFIB's vice-president of national affairs, who will be answering questions with me in the small amount of time we have.

We're pleased to be here with you to present our members' experiences in hiring and retaining older workers, as well as policy recommendations on how to best encourage this relationship. You should each have a copy of our presentation as a PowerPoint deck with you in English ou en français, and I will be going through that presentation today with you.

First I'd like to spend a few moments talking about CFIB and the way we operate. CFIB is a not-for-profit political advocacy group that represents the views of more than 109,000 business owners across the country, in every industrial sector and region. We are 100% funded by our membership and are strictly non-partisan. Our policy positions are taken based on member feedback from surveys on all issues relevant to them.

Before starting on slide 3, I'd like to note that for the sake of clarity we'll be using 60 years of age as the cutoff for “older worker”. Obviously people have different definitions of “older worker”, but we're going to use this for our presentation.

Our members have a keen interest in the issue of older workers, not just because of general social issues but also because of the skills and labour shortage problem. This is not just a western Canadian problem; many SMEs in Ontario and Quebec and in Atlantic Canada have reported important skills and labour shortages in their sector or region. National data from 2012 shows that more than 60% of members said that it was somewhat or very difficult to hire new employees in the past three years.

There is no single cause to the shortage-of-labour issue, and there is no single solution to the challenge, either. CFIB believes that an important part of the solution is to improve the participation rate of those traditionally under-represented in the labour force, such as older workers.

To further underline the need to better integrate older workers, I'd like to cite Stats Canada's result from the most recent census:

The number of seniors is approaching the number of children. Between 1992 and 2012, the number of seniors increased 57.6%, while the number of children fell 3.6%. As a result, on July 1, 2012, children outnumbered seniors by 476,300, compared with close to 2.6 million on the same date in 1992.

Finally, for your information, we are currently consolidating our shortage of labour survey data for a mini-report slated to be released later this summer.

The next few slides, starting with slide 4, present data from a 2007 report on older workers in our western provinces. In all, 47% of members in western Canada said that they currently employed workers 60 years or older. Moreover, the tendency to hire older workers increased with the size of firm. For example, 65% of companies with 20 to 49 employees had older workers on staff, compared with 47% of firms with 5 to 19 employees.

More than 50% of firms in manufacturing, transportation and communications, and wholesale reported having older workers. The industry with the lowest incidence of hiring older workers was the primary sector, at 39%.

Slide 5 shows that small businesses value many different traits brought by older workers to their company. In particular, the industry experience or technical knowledge accumulated over many years is a valued skill that 89% of the members say is important to consider when hiring older workers. Strong work ethic and loyalty often also come up as other positive traits, with 85% and 78% of members respectively pointing to these two aspects as beneficial.

Our study asked members what challenges they face in hiring older workers, and slide 6 shows a selection of responses. Overall, the difficulties in accessing and drawing from this pool could be loosely grouped into the following areas: challenges in finding the workers; challenges in updating the required skill levels, especially in computerized environments; and health concerns, such as increased insurance premiums, the ability to do the work required, and job safety.

It's very important to note that many members responded by saying that they had no challenges in hiring and retaining older workers.

Finally, many employers have modified the nature of the job in order to take advantage of an older worker's specific skill set, as demonstrated by the last quotation on slide 6, and also by the comments Barbara made earlier today.

Slide 7 indicates that hiring older workers depends on many factors, some of which can be controlled by the employer, some by the employee, and some by government.

Our 2007 study asked members how they retained existing older workers. Over 60% of businesses said they had a specific arrangement with their workers on the hours of work, and 45% said they changed the job to suit the needs of the worker. However, over one-quarter of members said no changes were necessary. Still, employers have shown flexibility both in terms of scheduling and in terms of the work being performed.

We should also note that when analyzing the results, it was those businesses that reported having difficulty retaining older workers that were more willing to adapt to the older worker, showing perhaps that the shortage of labour problem is driving this need to adapt.

The next few slides, starting at slide 8, will look at ways to incent workers to stay in the workforce longer. These modifications are important, given our changing demographics, and labour shortages in particular.

The decision in Budget 2012 to increase the age of eligibility for old age security to 67 from 65 was supported by CFIB members, again likely due to the shortage of labour problem. You will note that the majority of respondents were supportive of the measure, with the caveat that workers in the public sector receive a similar increase.

Slide 9 shows that 66% of SME owners believe the OAS changes will result in more people staying in the workforce and will help reduce potential labour shortages.

The government recently also made changes to the Canada pension plan in terms of eligibility and contributions. You'll see on slide 10, on the positive side, that providing the option of delaying CPP in favour of higher future benefits should help address labour shortages. On the other hand, our members have raised concerns about the changes to CPP contributions. It is good that we are encouraging workers to stay in the workplace; however, we should not make this punitive for employers. The changes now make it so that if a worker is over 65 and chooses to keep contributing to CPP, the employer has no choice but to contribute as well. We have had many businesses that were caught by this recent change and were faced with $5,000 tax bills per older worker. This is a disincentive to hiring older workers.

Like CPP, employment insurance is a payroll tax and is therefore particularly harmful to a business's operations, as it is a tax on jobs. That is why SMEs support the EI hiring credit, in particular, because it is administratively simple and is credited directly to the payroll account. But the point of EI is to be an insurance program in the case of job loss. For some workers this might not be as much of a concern as it would be for the rest of the workforce. They may be working in a position as a favour to an ex-employer, for example, or as a temporary measure to fund a certain personal project or endeavour. In these kinds of situations, could we not make paying into EI voluntary?

To reinforce that point, in the 2008 survey 71% of members said workers over 65 should be exempt from paying EI premiums, versus 23% who disagreed.

Finally, I'd like to sum up by saying that SMEs value the contributions of older workers. Though some flexibility in working arrangements can be required, the net benefit seems universally positive. When looking to encourage the integration of older workers into the workplace, the government could help by providing more information on where to find qualified workers and by creating broadly accessible tools that promote hiring in this manner, like the EI hiring credit.

To that point, EI contributions could be voluntary for both the employer and the employee over a certain age threshold, given that their use of the program would likely be lower. We also suggest that when an employee over 65 chooses to keep paying into CPP to draw higher benefits, which is their right, employer contributions should not be mandatory.

Thank you very much, and I look forward to your questions.

[The Chair, Conservative, Ed Komarnicki]

Thank you very much for that and for indicating your membership's responses. We do get responses from them as well on a regular basis and an understanding of what they are thinking.

We'll start now with Monsieur Boulerice.

Go ahead.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

I want to thank our witnesses for their highly valuable input.

I want to begin with the representatives from the Canadian Federation of Independent Business.

I will start with a little context. A few years ago, even before I was elected as an MP, I visited a textile factory in the Rosemont—La Petite-Patrie riding, as the NDP candidate. Knowing that the factory would soon be closing, people who had worked there for 20 or 25 years told me they had no idea what they were going to do. They hadn't received any skills training during their careers. All they knew how to do was make suits. Their only prospect was probably to depend on social assistance until they turned 65.

All that to say how important I think it is to introduce ongoing skills training programs. Ms. Jaworski talked about that. Your survey on specialized training, however, revealed that only 9% of your members had taken measures to retain older employees. That isn't very much.

Do you think businesses should do more as far as ongoing employee training goes? If not, should we start, as of now, allocating more public resources to the targeted initiative for older workers?

[Louis-Martin Parent]

A lot of on-site training is provided in the CFIB's member businesses. That aspect of training is very important to our members, because professional training programs lasting one or two years are too costly for them. That is why on-the-job training is often used.

In the case of workers who have held a specific job for 20 or 25 years, it is often necessary to look at what skills they have and, in some cases, to try to adapt the position to their needs, if possible. In such cases, it may be possible to provide on-the-job training.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Right now, do you think the targeted initiative for older workers has enough resources and is truly effective on the ground, making a difference in the everyday lives of tens of thousands of Canadians?

[Louis-Martin Parent]

That's a good question.

Do you want to add anything to that?

[Corinne Pohlmann, Vice-President, National Affairs, Canadian Federation of Independent Business]

It's difficult to say because every situation is going to be different, right? As Louis pointed out, many small business owners, for example, do train. It's just not specialized, professional training. It's on-the-job training. It's the type of thing that they are going to train for the positions they have. They are going to continue to keep training those people because that's the only way they are going to retain those people, especially as we move into an environment with more labour shortages.

We certainly could look at specialized training in the public domain, things like the proposed Canada job grant, which we're looking at. We have some concerns, but we like the idea of money going towards workplace-type training so there is money adapted at that workplace environment, because we believe that's the best type of training.

But we're also concerned that sometimes these public types of training are not necessarily accessible to smaller firms. Often it's difficult for them to access these types of training because it's the larger firms that can do the paperwork and meet the necessary criteria to access these types of things.

That would be our concern about the public type of training.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much.

[Louis-Martin Parent]

I would like to add something to that. Members of our federation, especially in Quebec, are reporting that some very effective training programs are currently in place at the provincial level. Certain programs in certain provinces are quite effective.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I am going to take a brief moment to ask Ms. Jaworski a question. She brought up an important topic.

It's great that people want to continue working. But for some, it's not a choice: they have to put off retiring. Indeed, the age of eligibility for old age security was pushed to 67 years of age, and 70% of Canadians have no complementary pension fund to draw on.

What do you make of the fact that people are being forced to keep working because they have no other choice if they want to be able to afford rent and groceries?

[Barbara Jaworski]

Sorry, I'm not quite sure what the question is.

[The Chair, Conservative, Ed Komarnicki]

Do you want to restate your question, Mr. Boulerice?

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Yes please, Mr. Chair, if possible.

The current situation and the changes made to the eligibility criteria for the old age security program are important considerations. Do you think that, as a result, a lot of Canadian workers will be forced to continue working, even though they would choose not to, if they had the benefit of a private or complementary pension plan or if the public pension plans were increased?

[Barbara Jaworski]

Yes, absolutely. I think there would be a big difference.

I will just comment on that as well as the other point you were making. Part of what progressive organizations are doing is talking about the fact that training is a shared responsibility between the individual as well as the organization, and maybe looking at training a little bit differently, not necessarily as an expense for older workers, but perhaps as an opportunity to link it to some of the other business challenges they have, like hiring younger workers where they can't find the talent, with older workers then assisting the younger workers.

Definitely, we're seeing employers right now opening up their eyes to the fact that employees are staying past the age of 65. They are looking around and saying, “Well, I guess we knew that with the repeal of mandatory retirement this was going to happen”, but they don't have any practices in place to educate employees starting much earlier—perhaps in their forties—and saving for retirement and what it takes, and now they are caught in a position. I'm talking to employers who are saying to me things like, “It's all fine for you to be saying this kind of thing, but I'm trying to run a five-star hotel, and the bartender who has been with me for 30 years is handing me a drink like this. How do I deal with that?”

So you have a combination of both physical issues and performance issues. There are many different sorts of things that are going on and need to be separated out.

[The Chair, Conservative, Ed Komarnicki]

Thank you for that response.

We'll now move to Mr. Butt. Go ahead.

[Brad Butt, Conservative, Mississauga—Streetsville, ON]

Thank you very much, Mr. Chair, and thank you both Barbara in Toronto and our friends from the CFIB that are here in Ottawa.

I'll give you a scenario. It's like other scenarios we get as members of Parliament. Let me know how you would provide advice to this individual. I get somebody who comes into my office. He's 52-years-old. The company that he's worked for since he was 25 or whatever is no longer in business for whatever reason. In this particular case, it was downsizing in an insurance company. He's 52. His resumés are flying all over the place and he's being told things like he's overqualified. He is of the view that there's age discrimination, that the next company is saying that they're only going to get 10 years out of this guy before he retires, so they're not even going to look at him.

How do we get around some of that stereotyping? How do we get the business community, the employers, more engaged in recognizing the value of an older worker? He'll even say that he doesn't mind taking a $10,000 or $15,000 a year pay cut to go to a different company that may be somewhat related to what he did before. He says he's willing to learn and train, but he's struggling to get that employment opportunity.

Do either of you have any advice for that constituent of mine? I feel for him. I understand that. He's a talented guy and very articulate, but he's having real difficulty, I think, predominantly because he's at the age of 52 or 53 and wants to keep working. Who wants to start?

Do you want to start, Barbara? Please go ahead.

[Barbara Jaworski]

Sure, thanks.

I think we often see this, and there are a couple of things I would say. First of all, we've focused a lot of attention on helping older workers repackage themselves and maybe look at their transferable skills. But what we haven't done is to help employers see what the business case is for them. I think that is a really big piece. Employers need to see the numbers. They need to understand that in fact employers who are investing in their older workers and investing in different kinds of strategies are saving hundreds and thousands of dollars.

There are business cases out there, but our focus naturally has been on older workers themselves. Now the big gap is helping employers see that there are different kinds of strategies they can use that are very effective, that will save them a lot of money, and repositioning the fact that older workers are very loyal. They're not going to be leaving you in two to three years' time. The lower turnover costs are going to be very helpful to an employer, saving them a lot of money.

Those are the kinds of cases that we present to employers, as well as packaging up the toolkit and helping employers see that while the toolkit is looking at older workers, it's actually to help your younger workers get their foot in the door.

So it's kind of repositioning, making sure that employers see what the value is for them.

[The Chair, Conservative, Ed Komarnicki]

Ms. Pohlmann, go ahead.

[Corinne Pohlmann]

I would add that I agree that it's also about educating employers about the value that older workers bring. But you need to remember that employers themselves are getting older. This aging demographic isn't just on the worker's side but also on the employer's side. So I think it's naturally going to become a little bit more easier. However, I still think there's education that needs to be done out there, but it doesn't help your particular constituent today.

I also want to suggest that sometimes there's a big focus by workers, if they've always worked for a big company, to continue to look at the big companies. I often encourage folks to consider the smaller firms, because they are more open, we believe. One in two employers is telling us they're already—this was a few years ago—hiring folks who are over the age of 60. Sometimes I think there's also this bias towards larger firms. Maybe you need to focus on smaller firms.

I think the other piece that's growing among older workers is self-employment. How can we help people transition into self-employment, because it gives them the flexibility they may be looking for? Are there avenues there? Perhaps we're still putting barriers in front of them to their doing that properly.

[The Chair, Conservative, Ed Komarnicki]

You've got about 20 seconds.

Mr. Parent, do you have a comment, and maybe we'll close with that?