Older Workers and the Labour Force

November 18, 2011 – Older Canadians are staying in the work force longer than in previous years. For some, the traditional rules of retirement no longer apply and for others staying in the workforce is a necessary means of saving for retirement.

The employment rate of individuals 55-plus has grown considerably in recent years. From 1997 to 2010, it rose from 30.5% to 39.4% for men and nearly doubled for women, 15.8% to 28.6%. Whether it’s a choice made by preference or necessity, Canadians are increasingly working into older age.

Older Workers Want and Need to Continue Working

According to Statistics Canada’s 2008 Survey of Older Workers, 56% of individuals aged 60+ plan to remain in the labour force, with 88% planning to continue working part time.

A number of reasons may explain the trend toward increased labour force participation among older Canadians.  As life expectancy and years of good health increase, the traditional age of retirement may become obsolete for many Canadians.
On the ‘need’ end of the spectrum, workplace pensions aren’t what they used to be and where they are offered, they’re more likely to be defined contribution than defined benefit.  Plus, the recession and lost savings has more Canadians working longer to ensure financial security when they finally do retire.

Benefits and Barriers to Labour Force Participation

Over the past year, the National Seniors Council consulted with stakeholders from across Canada, including CARP, on labour force participation of older Canadians.  The Council’s recently released report shows that while significant strides have been made, “more can be done across all jurisdictions to support those seniors and near seniors who wish to remain engaged in, or re-enter, the labour force, and more can be done to promote positive intergenerational relations across all levels of society.” In other words, ageism is still a problem.

The report points out that labour force participation contributes to active ageing, which can “prolong independence, extend participation in the community and society, and help manage chronic illness and prevent poor health.” Other benefits include increased income, increased mentoring and knowledge transfer to young generations in the labour force, and retention of technical skills, leadership talent, and corporate memory.

The many barriers to labour force participation include poorly adapted physical work environments, inflexibility toward informal caregivers, mandatory retirement practices and persistent ageism.

In addition to the labour force participation challenges that the aging population faces, the report argues that intergenerational tensions need to be managed in the workplace in order to optimize organizational performance and improve work environments. Efforts in addressing intergenerational tensions could help tackle ageist attitudes, perceptions, and stereotypes in the workforce and in the broader society.

By “removing disincentives and developing supports that encourage continued labour force participation while allowing flexibility to address individual needs and responsibilities,” barriers and supports for labour market participation can be addressed, according to the report.

Recommendations for Action

There are many changes that governments and employers can make now to facilitate labour force participation among older Canadians, including co-ordinated and targeted jobs database, flexible work arrangements, phased retirement (as the CPP recently permitted), physical and cultural age-friendly workplaces, and caregiver job-protection and work leave.
Whether it’s a matter of preference or financial need, governments will have to start doing more to facilitate the work choices of older Canadians.

In order to help individuals who want or need to continue working, CARP will be delving further into strategies for employers to help older workers stay in the work force.

To read the National Seniors’ Council on older workers, click here