There was a time, back in the mid- to late 1990s, when a chief executive officer and his or her corporate lieutenants could be rewarded handsomely for laying off employees.
Share prices would actually go up when the CEO announced that hundreds or even thousands of workers were losing their jobs because a division was being closed or the ranks of management were being thinned.
Companies everywhere were restructuring. The word downsizing nudged its way into the language. Jobs for life were a thing of the past. Lean and mean was the ethos of the day.
All of that may have been good for the bottom line, but it didn't do much for morale at the plant or the office.
Workloads increased. So did stress, resentment and burnout. While all these things were happening, compensation was growing slowly at best. A little inflation combined with a tax hike here and there could wipe out whatever financial gains the worker made.
The lean-and-mean approach has dominated corporate life since the recession of 1991 and 1992, but there are signs that it is reaching the end of its shelf life.
A small minority of companies with eyes for the future have determined that their long-term viability depends upon attracting and retaining good employees.
They are now attempting to cultivate loyalty among their hired hands. The change has little to do with the corrosive effects of downsizing and everything to do with the economics of supply and demand.
Smart managers have come to realize that the supply of talent is going to decline, but demand for skilled and capable people will remain steady or even increase.
This has already happened in Alberta's hot economy where headhunting and poaching are common practices and shortages of tradespeople, as well as management and executive-level talent, have bid up wages and salaries. But it will occur elsewhere due to three irreversible trends affecting Canada and most other industrialized nations: The aging of the population; the desire for early retirement; and longer lifespans.
A recent report from the Ottawa-based Conference Board of Canada concludes that: "The demographic imbalance caused by low fertility and increased life expectancy will fundamentally alter the functioning of labour markets."
These changes will not take place overnight.
Linda Duxbury, a professor in the school of business at Ottawa's Carleton University, notes that in the 25 years since 1980 the country's labour force grew by 225,000 workers annually on average. By 2010, that growth will drop to 42,000.
"Within the next decade," Duxbury says, "for every two people who are retiring, there will be less than one person to take their place."
This is one of those big problems that goes beyond market niches and competitive pressures.
Therefore, it's easy to ignore and, unfortunately, that's what most companies are doing. A Conference Board survey of employers earlier this year revealed that 88 per cent were aware of the problems that an aging labour force will create. Yet, only eight per cent had made plans to ensure that they have an adequate supply of workers by, say, hiring retired workers.
The Hamilton-based steelmaker Dofasco Inc. is one of the companies that has acted.
In 2000, it hired David Foot, the University of Toronto demographer and author of the best-selling Boom, Bust and Echo, to study its workforce.
He found that the average age of its workers was 44 and concluded that between 50 and 70 per cent of them would be eligible to retire within 10 years.
Dofasco, which trimmed its workforce from 12,500 to 7,500 in the early 1990s, now spends $15 million annually on training and development, mostly on apprenticeship programs.
But even the most progressive companies can only do so much.
The Conference Board concludes in its report that changes in public policy will also be required. Canadians are retiring, on average, at age 61. Governments should adopt measures that encourage people to continue working into their 60s.
They should end mandatory retirement at age 65, the board says. The age threshold for drawing from the Canada Pension Plan could be raised to 65 from 60, which would require considerable political courage.
The board also suggests introducing wage subsidies for companies that hire older workers, a measure already adopted by France, Germany and Korea. Alternately, Ottawa could scrap all income tax on people who are working after turning 65.
One never hears such ideas being discussed in Ottawa or the provincial capitals.
In fact, one rarely hears any discussion of future labour shortages or their impact on the economy.
It will likely take a crisis to get the political class to act.
(D'Arcy Jenish can be reached at jenish@businessedge.ca)
