Baby boomer retirees pose challenges for Nanaimo

NANAIMO – Half of city's senior management team is eligible to retire within the next five years.

With a wave of baby boomers set to retire, Nanaimo officials are facing big questions about the future of staffing at city hall.

B.C.’s baby boomers are set to exit the workforce over the next five years, contributing to an estimated shortfall of 160,000 workers by 2015.  According to labour experts, the shift will create big challenges for organizations, from paying the costs of retirement to recruiting new employees.

The City of Nanaimo isn’t immune. Thirty per cent of the city’s employees will be eligible to retire without pension penalties within the next half-decade, including half of the senior management team. In the parks, recreation and culture department alone, four staff members are anticipated to announce their exits within the next 18 months, preluded by the departure of the city’s senior manager of parks and civic facilities this September.

The wave of retirements has Nanaimo’s top city officials mulling next steps for the organization, including potential restructuring, succession planning and recruitment strategies.

Terry Hartley, the city’s director of human resources and organizational planning, said there could be an opportunity to look at ways to do things better at city hall and reduce costs by leaving some positions vacant. But city officials will also have to consider how to retain employees in the wake of provincial labour shortages and deal with the retirement of long-term employees, who could take their knowledge and history of the organization with them.

“[The Conference Board of Canada estimates] B.C. will have a labour shortage by 2015 of 160,000 skilled workers, so we know this is an issue,” said Hartley, adding she anticipates challenges ahead. “What we do now is  prepare for the retirements we know are going to happen.”

Labour experts say baby boomers are larger than any other generation behind them, lending to potentially significant employment crunch issues for organizations stacked with the demographic.

Imagine a large bulge of baby boomers traveling through a business like an egg in a snake’s stomach, said Christian Codrington, senior manager of professional practice at the B.C. Human Resources Management Association.

“This great, high number of people in one age bracket are all moving into supervisor levels and later into management and then senior management – all [at] the same age and leaving at the same time,” Codrington said. “[It creates] massive problems for an organization, starting with the costs of retirement … then you have the organizational implications of a lot of people with a lot of knowledge leaving at about the same time.”

On the flip side, it can also create opportunity for organizations to change direction and reduce positions to save on salary costs, he said.

The B.C. Human Resources Management Association is seeing businesses like municipalities turn to succession planning as they look ahead to retirements, mapping out the numbers of people expected to depart and identifying key replacements to promote from within. They are also looking at graduated exits to help capture the knowledge of long-time employees.

“Instead of [someone turning] 65 and leaving … they start working four days a week, then three days a week … phasing themselves out while [their] replacement is starting to increase their time,” he said. “They are [job] shadowing … [and] the organization doesn’t incur extra costs.”

Looming retirements have been on the minds of bureaucrats for at least the last five years and city officials are working on strategies, according to Hartley.

The economic downturn helped stall a potential exodus, but she said officials always knew when the economy started to boom again they had to be ready for departure announcements.

Work has been done to improve the culture at city hall, including “love ‘em or lose ‘em” training to keep employees happy. But with a provincial labour shortage, city officials need to start looking at selling the value of working for local government and examining non-monetary benefits to retain talented workers, Hartley said.

Beginning this fall, Nanaimo’s new top bureaucrat has also announced plans to talk to city council about their vision for city staffing and budget discussions next month are expected to address retirements and potential cuts by attrition in parks, recreation and culture. The position filled by the senior manager of parks, for example, is not expected to be filled until city council reviews the department.

“For us it might be a little premature [to talk about restructuring],” said Nanaimo Mayor John Ruttan. “We are aware of the problem, but we are not aware of the solution. It’s something for us to talk about.”