Eradicating mandatory retirement began as a human-rights issue, but, over the next decade, keeping older workers in harness beyond retirement age is likely to become an issue of economic survival for a society facing growing skilled labour shortages.

By 2015, 48 per cent of the labour force will be between the ages of 55 and 64. Within 30 years, Canada will be an aged society, with a projected median age of 45 and quarter of the population past 65.

There just won't be enough young people around to fill all the vacancies. Immigration likely won't be able to keep up, either, even if we do streamline the process.

Skilled workers are becoming an international commodity - other industrialized nations are also struggling with skewed labour-force demographics caused by Baby Boomers moving into retirement.

Barbara Jaworski

One report by the Canadian Management Centre says North America could use an extra three million leaders in the 25-to-44 age bracket.

Raising the employment rate for older workers is critical to soften the blow of a shrinking labour force, says the Organization for Economic Co-operation and Development, which foresees "major consequences for economic growth, public finance and living standards" in countries with aging populations.

"It's a serious issue in Canada," says Barbara Jaworski, president of the Workplace Institute, (www.workplaceinstitute.org) based in Toronto. The institute sponsors the annual Mature Workforce Summit (scheduled Nov. 6-7 in Toronto) and develops the list of the 50 best employers for 50-plus Canadians.

Retaining and attracting mature workers will allow some businesses to maintain productivity and stay competitive. For others, it will be a matter of keeping their doors open, says Jaworski, author of Kaa-Boom! How to Engage the 50-Plus Worker and Beat the Workforce Crisis.

But it requires a change in mindset.

More companies are developing recruitment strategies for hiring young employees than are looking for ways to retain and attract older workers, according to the 2006 Merrill Lynch New Retirement Study, which polled 1,000 U.S. companies.

It wasn't all that long ago when downsizing cut swaths through careers of experienced middle-aged workers, jettisoned by companies intent on reducing overhead by hiring younger, cheaper employees.

Today, those same companies "can't understand why they can't find resumes from the same quality of people as they were able to get a few years ago," she says.

The federal government recognizes the need to act, and got a start with two changes in the recent budget. The first change allows employers to pay a partial pension and benefits, thus encouraging phased retirements. The second increases the age limit to 71 from 69 for converting registered retirement savings plans - an incentive for older Canadians to continue working and saving for that long retirement.

The government also recognizes older workers face barriers and is looking for other policy changes that can address the issue. A federal expert panel on older workers is meeting with governments, labour representatives, academics, employers and industry across the country to identify challenges facing older workers.

This summer, the panel will submit a report to the Minister of Human Resources and Social Development with recommendations for policies for attracting and retaining older workers.

Older workers have a lot to offer - and a lot more productive years in which to make contributions.

Baby Boomers are living longer, healthier lives and redefining retirement. At the age of 65, Canadian women can expect to live another two decades - and men another 16 years. But Boomers also are more likely to have entered the labour force later than other generations and are more likely to have experiences that shrink the retirement nest egg - things such as divorce, single parenthood, parenting later in life, having to reboot a career following downsizing, multiple employers or career changes.

And many of them do want to continue working past retirement age, according to projections from a 2002 study for Human Resources and Social Development, which polled Canadians who retired between 1992 and 2002.

A third of those polled said they'd retired due to ill health. Another third said they were ready to hang up their spurs - with health care, social assistance and education workers least likely to want to continue working.

The remaining third were healthy and willing to continue working - if conditions were right. Those conditions included reduced work schedules, part-time employment or flexible schedules and increased salary.

Prime candidates for extended work lives include those whose financial situations had deteriorated following retirement; people with higher education and well-paying, engaging occupations and immigrants.

There is no template for attracting and retaining older workers, says Jaworski. "Each organization is different based on the individuals they employ, the business they're in - it can even be different from one department to another."

But a strategic plan would include succession planning, training, flexible work arrangements, adequate pay and benefits, end-of-career planning and support.

Few companies have developed those strategic plans, according to a 2005 study of workers in 700 Fortune 1,000 companies done by Towers Perrin for the American Association of Retired Persons.

The study showed mature, large companies to be at greatest risk from the demographic shift, due to their hiring history - rapid growth through the 1970s, followed by downsizing in the '90s that left them with few mid-career employees today. Leadership, sales and technical positions will be the hardest to fill.

The cost of losing older workers is high. Replacing an experienced worker can cost 50 per cent or more of their annual salary and the cost is higher in jobs requiring specialized skills, advanced training or extensive experience - all more likely in 50-plus employees.

Employers often complain the generation now entering the workforce lack core competencies - which can be counterbalanced by older employees. Many 50-plus workers have experience, dedication, focus, stability and enhanced knowledge.

They have perfected critical thinking skills over decades of work life. They have depth of knowledge, honed interpersonal skills and understand the older customer base.

They're also more motivated than younger employees, says the Towers Perrin research, and are more willing to invest discretionary effort.

So it makes good business sense for businesses to hire older workers.

But what about the would-be retirees at the receiving end of all this attention?

A quick peek across the border could cause concern about issues that can affect Canadian Boomers on both the Freedom 55 and Freedom 75 retirement plans - erosion of retirement age can threaten pension and income security programs.

The U.S. banned mandatory retirement before age 70 in 1978 and got rid of the notion altogether in 1986.

While this was going on, eligibility for social security benefits rose to age 67 from 65 and the rate of unionization dropped to 12.9 per cent in 2003 from a shade over 20 per cent in 1983.

Offsetting that is the fact we have a different society. Canada has a stronger social security net, including health care, and the labour movement is stronger here than south of the border.

Human-rights legislation offers us some protection against age-related discrimination in hiring, promotions and job security.

Competitive hiring will ensure access to training, equitable pay for experience and benefits for older workers, once the penny drops in corporate offices across the land.

The talk now is about growing freedom for older workers. Some of us may want to retire early; some may want to cut back hours or ease into retirement; others may want to die in the harness.

But will the economic impact of growing labour shortages take away our ability to choose? Are some Baby Boomers heading for careers as octogenarian wage slaves?

(Sharon Adams can be reached at sharon@businessedge.ca)