Older Workers At Risk of Withdrawing from the Labour Force or Becoming Unemployed: Employers' views on how to retain and attract older workers

Introduction

The aging of Canada’s population is a significant trend that will have wide ranging social and economic implications for decades to come. In the past, Canada’s economic growth was mostly attributed to labour force growth. However, changing demographics, that is a lower fertility rate combined with rising life expectancy and the impending mass retirement of the baby-boom generation, means that between now and 2020 the rate of labour force growth will slow.Footnote 2 

This slowing labour force growth could exacerbate existing labour shortages and is expected to reduce economic growth.Footnote 3  However, these negative effects could be mitigated by increasing the labour force participation rate of older workers as this would help to delay slowing labour force growth and take full advantage of the existing expertise and leadership of older workers.

Just as importantly, keeping seniors active and engaged in the labour force contributes to seniors’ health and financial well-being. Continued participation in the labour force can provide a sense of purpose and satisfaction; an opportunity for social interaction; mental stimulation; and positive health outcomes for many seniors.Footnote 4  Research also indicates that many older workers want, or need, to continue working because of their financial situation.Footnote 5 

A greater proportion of older Canadians are working longer. Analysis by Statistics CanadaFootnote 6  found that Canadians are delaying retirement by three years compared to their counterparts in the 1990s. Among all employed Canadians in 2011, one out of six was an older adult aged 55 and older, up from one out of nine in 2001.Footnote 7  The share of those aged 55 and above in the labour force (who are working or looking for work) is expected to continue to increase. In fact, by 2036, the proportion of the labour force that will be 55 and over is projected to be 18.7 percent as compared to 16 percent in 2009.Footnote 8 

However, while the overall trends suggest that older Canadians are generally doing well compared to their counterparts even a decade ago, older Canadians are not a homogenous group.

Some groups of seniors, such as displaced older adults, older persons with chronic, prolonged or episodic illness, injuries, mental health issues, or disabilities, older adults with low levels of education, older Aboriginal peoples, older recent immigrants and older adults who have significant unpaid caregiving responsibilities, may face more barriers, have a harder time finding employment or be at greater risk of exiting the labour market. In addition to lower labour force participation rates, these groups may also be more vulnerable to lower incomes and pensions, and to dependence on public social assistance.

Employers are in a critical position to actively address many of these barriers and challenges that face older workers. However, while organizations are concerned about their aging workforce, many have not yet adjusted their policies and programs to respond to the needs of mature workers, including those at increased risk of labour force drop-out.Footnote 9 

In recent years, the federal government has engaged in various consultationsFootnote 10  and initiatives involving a cross-section of stakeholders – including academics, seniors, near seniors, older workers, employers, community leaders, etc. – to gather perspectives on the labour force participation of near seniors and seniors and support older workers who wish to remain active in the workforce.

The federal government has made a commitment to focus on encouraging the labour force participation of all adults to address known shortages, prevent loss of economic productivity, and enhance the financial and social well-being of Canadians.

Accordingly the federal government has made it a priority to encourage the labour force participation of older workers and under-represented groups who have difficulties integrating or re-entering into the labour market.

Furthermore, the Parliament of Canada’s Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities in its recent examination of labour and skills shortages, emphasized the important role that underrepresented groups can play in addressing labour and skills shortages. The Committee noted that one solution to address labour and skills shortages in Canada is “to maximize the untapped potential of individuals in certain groups of the Canadian population that have a lower participation rate or a higher unemployment rate than average, such as mature workers, people with disabilities, Aboriginal peoples and recent immigrants.”Footnote 11 

The National Seniors Council’s Role in Examining the Issue

In 2010, the National Seniors Council was tasked with examining the labour force participation of seniors and near seniors, and intergenerational relations. Upon examining these issues, the Council prepared the 2011 Report on the Labour Force Participation of Seniors and Near Seniors, and Intergenerational Relations. This report addressed the participation of older workers in general, identifying the challenges and barriers they face, and offering overarching recommendations to address them. The report indicated that many older workers wish, or need to remain engaged in, or re-enter, the labour force beyond the average age of retirement, however many withdraw or become unemployed. It also emphasized the importance of engaging employers in the discussion.

In March 2012, MinistersFootnote 12  tasked the National Seniors Council with further examining the issue by seeking the views of employers on how to retain and attract older workers, specifically those most at risk of withdrawing from the labour force or becoming unemployed.

The National Seniors Council is pleased to submit to the federal government this report on the Council’s latest priority. The report serves to propose ways that the federal government can support employers in attracting, retaining, and facilitating the full labour force participation of older workers, including key sub-groups who may be at a higher risk of withdrawing from the labour force or becoming unemployed.