How should employers manage delayed retirement, adjusted work hours and other Baby Boomer desires?
As the largest generation in the workforce starts turning 65, many baby boomers are delaying retirement. Decisions to delay retirement can be based on a variety of reasons including financial concerns over retirement income or longer life expectancy, or because many boomers are healthier and want to stay more physically and intellectually active.
By the end of 2012, human rights laws affecting provincial and federally regulated employers all prohibited employers from unilaterally setting an upper age limit for their employees unless they were able to demonstrate that they had a bona fide occupational requirement for such a rule. The combination of employee decisions to delay retirement and the human rights laws, poses a number of challenges for employers.
There were two immediate consequences of banning mandatory retirement: Employers lost the ability to predict when their employees would retire, and they could no longer ”weed out” underperforming employees by forcing them to retire. Consequently, employers need new strategies to deal with both issues.
For businesses trying to plan for their human resources needs, the first challenge is to get their employees to start planning how and when they will wind down their careers. Employers can encourage the process by offering retirement planning seminars to assist employees in understanding their specific retirement lifestyle and income needs. Then, armed with this information, employees are more willing to make decisions regarding their retirement.
Employers who want to actively encourage their older work force to retire (perhaps for safety or productivity reasons) will want to also consider providing incentives such as phased-in retirement, financial bonuses and other benefits that are conditional on an agreed-to retirement date. Any agreements to phase in retirement or change work responsibilities should be documented in writing.
Managing the performance of older workers will be a challenge if there are no regular performance review processes already in place. As noted earlier, human rights laws prohibit age-based discrimination so employers can’t implement performance management measures only for their older employees.
Besides having performance review programs applicable to all employees, it is also important the process be transparent so employees understand that standards are expected for everyone. Performance improvement plans should be documented, time should be allowed for the employee to meet the standards required and the consequences of not meeting those standards should be clear.
Where physical attributes (such as strength or fitness) are important to the performance of the work in a safe and efficient manner, employers should ensure such criteria are truly connected to the actual job or position and that it has objective ways to measure individual capabilities. Some performance problems could be due to a disability or illness, which employers have to legally accommodate up to the point of undue hardship.
Recent human rights tribunal decisions tell us that employers are expected to accommodate reasonable, age-based limitations on performance. An explanation of the accommodation process is beyond the scope of this article, but suffice to say the investigation and implementation of reasonable accommodations for a disabled or older employee must be done carefully to avoid human rights claims. For the same reasons, employers deciding to terminate an underperforming, senior employee should proceed carefully to minimize the potential that the termination was based on ageism.
While there are significant benefits associated with retaining and hiring experienced employees, the fact that many more employees are choosing to delay retirement coupled with our human rights laws creates significant challenges for employers trying to plan for succession or managing the performance of those workers. Pro-actively implementing some of the strategies discussed can better equip businesses to deal with such issues, while continuing to benefit from the skills and experience of their boomer employees.
by Nicole M. Byres
For more information and advice contact a Miller Thomson lawyer at: [email protected].