Sustaining the Boom

The Baby Boom generation is perhaps the most popularized generation in history. Each stage of this cohort’s life has shaped society at large, re-writing expectations and experiences for subsequent generations. Having challenged North America’s traditional value systems in the ’60s and ’70s, and having reconfigured the economy from a labour-based economy to a service-based economy, the Boomer generation has affected change, and will continue to affect change, in a way unlike any other.

As Baby Boomers prepare to retire, many employers have started to reconsider the traditional retirement program. There is a new emphasis on retaining the talent and experience of about-to-retire Boomers, in addition to recruiting new and younger talent. The thinking here is that if employers get creative and offer flexible, part-time arrangements, perhaps they will succeed in sustaining the boom, so to speak.

In late August 2009, the Insurance Institute of Canada released the second part of its demographic research study of the Canadian property and casualty industry, A Demographic Analysis -Part II: Recruitment and Retention Issues in the P&C Insurance Industry in Canada. The first phase of the report, released in May 2008, offered a snapshot of the industry’s demographics. The average age of the workforce was 41 and roughly one in every four employees in Canada’s property and casualty industry is preparing to retire sometime during the upcoming decade. The report also showed a failure on the part of the industry to draw in enough new talent to fill the impending shortage. With this is mind, companies need to start thinking and strategizing for the inevitable day when the mature worker cohort (those between the ages of 55 and 64) decides to retire.

When it comes to recruitment and retention strategies, traditionally much of the focus has been placed on recruiting fresh, new talent. Indeed, the Institute’s most recent research affirms that targeting young workers is vital to the perpetuation of many organizations within the industry. But Part II of the Institute’s demographic study also notes that other options can and should be explored. One alternative area of focus is on retaining the mature worker. Mature workers constitute a large percentage of the industry’s current demographic. They have the most experience, and hence knowledge. When they decide to leave, likely within the next five to 10 years, companies will face a dearth of workers to help get the job done. More important than just filling the seats, however, will be the need to replace the corporate memory or knowledge gaps that arise when mature workers leave the workplace. Their wisdom is not generally replicated through reading training manuals or attending seminars.

Research indicates the employers are not the only ones who benefit by slowing the drain of experienced talent. Mature workers are suggesting that, if the options were made available to them, they would gladly pursue ‘semi-retirement’ or work part-time on a more flexible basis. People working in the insurance industry generally see their jobs as much more than a means to pay the bills. They appear to enjoy the social aspects of the work, the challenges and the opportunity to do meaningful work.

Is the industry capitalizing on these opportunities? What would a phased or semi-retirement program look like? What opportunities exist to retain mature workers, in addition to recruiting from similar service-type industries? What would be the challenges and benefits of such a program?

Passing on the cold turkey

The Insurance Institute surveyed more than 2,800 people working within the Canadian property and casualty industry. These workers represented 23 companies, with six companies accounting for 72% of the survey respondents as a whole. Forty-three per cent of the workers surveyed fell within the demographic category of the Boomer generation (between the ages of 43 and 62).

“The historical model of the labour market is that you have young groups of people who go to school and graduate and come out ready to work, and a much smaller group of older people who retire at a fixed age,” says Richard Loreto, author of the report and president of R. A. L. Consulting. “The whole phenomenon of the Baby Boom, at least in the case of Canada, has changed that.”

Previous generations of workers suffered from a variety of physical ailments as a consequence of working within labour-based economies. But for Boomers, working in a service economy, the nature of the work has been much less demanding on their bodies. As a result, “work is now a more likely component of the retirement period than it has been historically,” Loreto says. “The majority of people, including those in the property and casualty industry, are now doing the kind of work that you can carry much further into life.”

Loreto’s research found that three-quarters (73%) of respondents who intend to retire within the next five years would also like to work postretirement. Why? Forty-six per cent of respondents cited additional income as the leading reason to continue working, followed by interest or enjoyment in work (37%). Six per cent of respondents were interested in starting a new career, while 90% expressed an interest in staying on to work with their current employer, the research found.

Maria Blackmore, a vice president at a major reinsurance brokerage, is planning to retire next year, having worked in the industry since 1973. But although she is ready to slow things down a bit, she doesn’t want everything to grind to a complete halt. “I would like to have some kind of contract or part-time involvement in the industry after retiring,” she says. “For one thing, I feel like I acquired a lot of information and learning is an ongoing thing. I want to keep myself active. I don’t want to go from full-time work straight into full-time retirement.”

Blackmore has worked with the same organization for decades. She is an active volunteer with the Insurance Institute’s Ambassador program. For her, meaningful work involves sharing her experiences with up-and-comers, as well as keeping lines of social activity open. Blackmore emphasizes these “intangible” factors over the need to maintain a bank balance. Staying active and involved will go a long way to helping maintain quality of life, she says.

Ken Rayner, president of CULE Insurance, has been working in the insurance business for 40 years. Last year, he and a business partner launched CULE, and he has no intention of retiring anytime soon. “I do think that people are working longer than what might be expected of them,” he says. “If you enjoy your job, there’s no reason why you wouldn’t want to continue doing it.” For Rayner, the intangible benefits of working in the insurance industry help to keep him fully engaged. “It’s a very social industry and it’s a very close industry,” he says. “You get to know a lot of people. There are loads of opportunities to get out and do things and see things that I don’t believe you would have the opportunity to do if you were retired.”

Uncommon option

Blackmore doesn’t believe semi-or phased retirements are common. The Institute’s latest demographic research supports her belief: only 44% of the workers surveyed reported having a formal phased retirement program available to them. More specifically, 53% of the mature worker cohort reported not having a phased retirement program available to them. And it’s not just a matter of employees being unaware of what’s available. Employers themselves admit they simply don’t offer many options. A 2008 Manpower study surveyed 30,000 employers in 28 different countries. In Canada, 67% of employers responding to the survey said they did not have a retention strategy in place for older workers. Only 24% said they did, whereas 9% weren’t sure.

The health care and oil and gas sectors are excellent examples of industries that have begun to address the problem, Loreto says. That’s because those industries have a lready experienced the massive talent shortages predicted to affect Canada’s property and casualty insurance industry. “The numbers show the P&C industry is not the youngest industry going,” Loreto says. “It’s an industry in which people tend to retire a bit younger than the rest of the labour force, so its time will come in the next five to 10 years.”

Helen Bozinovski, vice president of human resources at Aviva Canada, says determining when people plan to retire has become a new challenge for an organization to manage. “People have different plans for themselves for retirement,” she says. “Some never want to retire. We have people still working past 70 and still very, very active. It’s not a given that 65 is retirement age anymore. It’s when the individual chooses.”

Some might argue the recent downturn in the global economy has taken its toll on retirement investment plans, causing people to think about working longer. Loreto acknowledges this might delay the talent shortage, but any such delay would likely be temporary. After all, he adds, “an economic crisis doesn’t cause us to get any younger.”

Although mature workers would consider extending their careers, employers still need to be creative in how they entice them to stay on, Loreto says. People may not be interested in working post-retirement if it means being chained to a desk. Working as a mentor, continuing involvement in industry charities or working on special projects are elements of a successful retention strategy, Loreto says. The key element in all of these is flexibility.

Informal flexibility

Susan Gunn, human resources director at Willis Group, says 69% of her organization’s North American workforce is over the age of 40. “If we don’t start feeding the talent pool and transferring knowledge, we’re going to have a huge issue,” she says. “So how do you do that in a way that people feel good about it, gets them interested and excited and moves the ball forward?”

Earlier this year, Willis implemented a flexible working arrangement program available to all employees. The uptake has been tremendous, Gunn says. Now, heading into 2010, the HR department is brainstorming how to up the ante and draft a phased retirement program. One option is to enrol the employee contemplating retirement into a program that gradually reduces the number of workdays in the week; during this time, the semi-retiree would be buddied with someone to transfer knowledge, resources and learnings.

“A lot of times, when people go from 150 km-h to 0 km-h, it’s hard,” Gunn says. “This way allows them to explore what it would be like to work three days a week instead of five, allowing them to discover other things they could be doing to fill up their days. It’s great for morale, treats people with dignity and respect and helps to build an awareness that their contributions to the company have been recognized.”

Bozinovski adds that Aviva Canada encourages flexible employment relationships rather than implementing a formal program. “It’s a view that managers should have a very personal understanding of all of their employees,” she says. “By understanding the personal needs and aspirations of their employees, they will be in a better place to help determine what the best way is to change their job when it comes to continuing growth within their role.”

Willing to work with employees to design a custom-made, semi-retirement program, Aviva Canada is in the process of brainstorming how it can bring even more options to the table. As it stands, in order to collect a pension, an employee must formally resign from the organization. Bozinovski says it might make sense to allow willing employees to be brought back part-time on a contract basis instead.

Such opportunities exist to bring employees back into the workplace on a special projects basis, as a backup for an employee who is off on short-term disability or seasonally, Loreto says. The very nature of insurance and reinsurance makes the industry a prime candidate for offering seasonal contracts, Blackmore adds. Opportunities abound during the busy reinsurance renewal season and the winter season for primary insurers, when claims volumes increase. Both are ideal times when seasonal contracts might work for an insurance professional in semi-retirement.

George Kehagias, director of human resources at Crawford & Company (Canada) Inc., says his organization, like many Canadian organizations, must still formalize a phased retirement program. As it stands, Crawford employees who are semi-retired are sometimes brought back on a contract basis to help clients with whom the employee had forged a solid relationship with over the years. “We have a lot of clients that have 30-or 40-yearlong relationships on key accounts and we really don’t want to lose that relationship, continuity and familiarity,” Kehagias says. The key to maintaining these relationships is to allow flexible working arrangements, he adds.

After surveying all of the different cohorts, flexibility was consistently listed as a top criterion in an ideal job, Loreto says. But “if you probe that, flexibility means different things to different cohorts,” he adds.

The core worker (aged 25 to 54) wants flexibility to take children to dental appointments and such. But for the mature worker, flexibility might mean having time to be with an aging parent or play a round of golf. “I think it becomes a question of the mature worker finding the right balance between work and leisure,” Loreto says.

Dan Lawrie of Dan Lawrie Insurance Brokers in Hamilton, Ont., says he has had positive experiences with re-hiring employees. Recently, a long-time employee who had worked as a commercial producer with the brokerage for 15 years decided she wanted to spend more time with her granddaughter. Lawrie threw her a retirement party. He then brought her back to the office the next day on a part-time basis in the marketing department. “She’s happy and we haven’t lost that experience and she can continue to contribute,” he says.

Knowledge transfer

“Like any good sports team, you need a balance between young, strong, up-and-coming talent and the experience of the mature players to have a winning team,” Lawrie says. “When you talk about phased retirement and flexibility, that’s where we can retain the knowledge of these people and the experience.”

Michael Kyritis, vice president of human resources with RSA Canada, agrees. “In parts of the business in which we have more employees at or near retirement eligibility, we have a planned transition, allowing for the successor to be mentored by the retiring employee,” he says. “Where we can plan for it, we don’t wait for our employees to retire before replacing them. It’s a win-win scenario — we are able to transfer valuable knowledge and build important relationships and the retiree has a greater opportunity to create a greater legacy.” RSA Canada is planning to formalize its mentorship program, he adds.

Bozinovski says knowledge transfer should be a key element of any formalized approach.

“It’s one of those things that a lot of organizations are worried about — losing that corporate memory that you can’t quite write down in a procedural manual,” she says.

“It is really [about] being able to support the organization’s business continuity by benefiting from [the retirees’] wisdom.”

Back to the Boomers

Employers need not be short-sighted, Loreto cautions. They shouldn’t focus exclusively on retaining employees in the insurance industry with whom they have forged lengthy relationships. People working in other, financial services-based industries may also be looking for a challenge after retiring from their careers. Certainly the skills they forged during their working life can easily be transferred to an insurance industry career.

Allen Bowles, for example, worked in the education industry for 30 years. When he retired at the age of 55, he found himself at a loss with all of his new-found spare time. His father owned and ran an insurance brokerage in Sudbury, Ontario when he was growing up, so the opportunity to enter the insurance industry as a second career seemed more like a homecoming to him.

He spent the first four years of retirement working with Freedom 55/London Life before joining a local brokerage. At the insurance brokerage, he adapted some of the expertise he acquired during his 30-plus years as an educator; he quickly realized there is a strong correlation between the two lines of work. “Basically we [brokers] are teaching all of the time,” he says. “The teaching models that I developed over my career have really helped me here.”

Lorie Guthrie Phair, principal at LePhair & Associates, suggests mature workers like Bowles offer much-needed skills in the relationship-building aspect of insurance work. She points to a 2007 Talent Matters report, published by Deloitte and the Toronto Financial Services Alliance, in which researchers found that workers in the mature cohort thrive at building relationships. “Part of our value-add is to make complex scenarios simple and easy for clients to understand,” she says. “That’s what’s so good about the mature generation. That’s what they were always good at.” Younger generations are very strong at adopting technology, she adds, but mature employees “know how to simplify things for co-workers. They know how to talk to people and sell and communicate.”

Kehagias also observes the mature generation “is wired differently.” For him, “that generation brings an incredible work ethic and loyalty to an organization that offers real benefits. Their energy and initiative can serve as a source of information and inspiration for newer workers.”

Targeting the Boomer cohort requires more than just organizing career fairs and visiting schools though. “It takes a fair bit of networking to reach this cohort,” LePhair says. “Either through referrals or word-of-mouth.”

Kehagias suggests collaborating with community partners to target mature workers. “These might include community centres, libraries, retiree associations, professional associations” he suggests. “There are recruitment and placement agencies that specifically target older workers, much like they target truck drivers or specialty areas. Advertising in industry publications is another way.”

Associations such as Canadian Association for Retired People (CARP) may also serve as a resource for employers looking for ways to develop innovative retention and recruitment strategies, Loreto adds.

Kehagias says education plays an important role in preventing any potential ageist behaviour from arising in the workplace. “Mentoring, respect and understanding the value of what an older worker brings to the organization, as well as the legal component of age-based discrimination, are all important pieces of what a training program would entail,” he says.

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The historical model of the labour market is that you have young groups of people who go to school and graduate and come out ready to work, and a much smaller group of older people who retire at a fixed age. The whole phenomenon of the Baby Boom, at least in the case of Canada, has changed that.

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In Canada, 67% of employers responding to a survey said they did not have a retention strategy in place for older workers. Only 24% said they did.

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Like any good sports team, you need a balance between young, strong, up-and-coming talent and the experience of the mature players to have a winning team.

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A lot of times, when people go from 150 km-h to 0 km-h, it’s hard. Phased retirement allows them to explore what it would be like to work three days a week instead of five, allowing them to discover other things they could be doing to fill up their days.