Quebec is experiencing severe labor shortages, the consequences of which are felt in all spheres of economic life. Some companies, especially in restaurants, do not hesitate to hire 11-year-old children to fill staff shortages.
Among the solutions – better retention of older workers in the labor market, in particular through financial incentives. In Quebec, the 55-year-old cohort is one of the smallest in the country, which is still in the labor market.
As management researchers, the impact of population aging on human resource management practices is crucial for research. Our research team, which includes Marie-Yves Boshan-Lego, Felix Ballesteros, Victor Haynes, Tanya Saba and myself, conducted a study aimed at examining the management practices of older professionals in the financial services sector. It is facing enormous pressure with the advent of artificial intelligence, digital services and more.
We conducted approximately one-hour interviews with the leaders of 16 major organizations in the financial services sector in Quebec, located in the regions of Montreal and the city of Quebec (National Bank, Desjardins, Sun Life Financial, Industrial Alliance, Intact Insurance, etc.).
Quebec accounts for 20% of Canada’s share of GDP in the insurance sector. The four head offices of financial institutions are located in Montreal, and international banks have centralized their back office activities there. The interviewees were managers (human resources, talent acquisition, talent management), vice presidents, senior branch manager and strategic personnel consultant.
We relied on the “black box” model of human resource management.
This model illustrates the relationship between the processes and intentions of managers when it comes to making certain management policies in various aspects (HR, marketing, finance, operations), decision making (budget, personnel policy), which are interpreted individually and collectively by all staff. , influence the organizational climate and results of the organization (productivity, flexibility, productivity, diversity).
Overall, our results confirm the importance of leadership support when it comes to organizational culture and the adoption of HR practices to retain older finance professionals for longer.
Very changeable openness to seniors
The openness of the managers we met to support older professionals at work varies and can be located on a continuum, ranging from a lack of will to an atmosphere of openness to diversity.
At one end of the continuum, employers see no added value in staying longer at work, and even worry about perceptions of injustice among staff if they are treated with special care. These organizations have virtually no practices that encourage older workers to continue working longer. On the contrary, they may even adopt programs to encourage them to retire.
At the heart of the continuum, many employers manage the requirements of their senior specialists on a case-by-case basis, depending on their position or job context and their individual characteristics (specialists or experience).
On the other hand, employers are the most supportive, with an inclusive organizational culture and a large number of HR practices aimed at senior professionals and often all staff. These employers seek to develop a culture open to diversity, broadly defined, involving all employees regardless of their characteristics (age, gender, disability, etc.). As one participant said:
Although the working conditions we offer differ from those offered by our competitors, they remain similar. Our company is more focused on the working climate and values.
Some employers view the recruitment and retention of young professionals as a critical issue and express inconvenience by focusing on senior professionals:
For banks, the challenge is to change our traditional structures and move to something more flexible. We will not be challenged by older workers, but by younger ones. I firmly believe that we will not be able to hire in the future if we do not change the way we work. Another participant stated:
We don’t need to adapt to baby boomers just as we don’t need to adapt to the new generation that is starting to work.
Basic HR practices
An atmosphere of openness and support of management is a crucial prerequisite for maintaining the work of older professionals. They lead to the adoption of the following key HR practices:
1) Flexibility in time and place of work (fast working day, part-time work, remote work), which allows older professionals to make a gradual transition to retirement. This allows the company not to completely lose them and their knowledge:
We must support people in their quest to achieve work-life balance, meet their demands for part-time work, start work earlier or leave later. We need to be more flexible if we want older professionals to be involved and work.
2) Recruitment and promotion of elderly professionals and retirees to benefit from their knowledge, experience, reliability and dedication. Employers note that older candidates are more likely to stay in office longer than younger candidates, who are often fired very quickly:
We recently hired a person over 55 years old. In an interview, he said he wanted to work for another ten years. For us, those 10 years can be just as valuable, if not more, than hiring a 30-year-old man who can leave the company in two years because he is looking for other problems.
Some employers periodically and temporarily hire their retirees because of their knowledge and experience:
I have a retiree who helps me with projects. We provide him with a phone and a laptop, which gives him full access.
3) Adjusting the roles and responsibilities of senior staff, for example by encouraging them to act as mentors or reducing workload, may also motivate them to continue working longer:
We must value their experience and respect their need for autonomy and flexibility. Because they love to share their knowledge, we need to create opportunities for them.
4) Adjustment of direct compensation, benefits and recognition. Some employers pay maintenance bonuses to senior key professionals, while others emphasize the importance of offering competitive compensation. Retirees who want to work part-time or during peak periods should not be adversely affected by retirement conditions.
5) Succession planning. The rarity of this practice is problematic, as retired financial professionals may leave clients who have been loyal to their services and company for years:
I am concerned about how we will be able to pass on to future generations the mind, skills and ability to adapt over the last 25 years.
Tasks of knowledge transfer
Due to significant technological and structural changes in the financial services industry, employers are competing to attract candidates who have recently been trained in forecasting analytics, artificial intelligence, programming and systems maintenance.
Senior professionals do not always have these skills. However, there will always be departments, such as sales, service and claims control departments, that will remain a priority and will need their experience. As one participant said:
Their strength is practical experience. They have incredible networks. This is something you don’t learn in school. This is a huge fortune.
Artificial intelligence will not replace the value of human judgments based on knowledge of the history and culture of the organization, as well as empathy and ethics. Therefore, it is especially important to inform, raise awareness and educate staff about the prejudices of ageism.
It is also important that HR professionals promote the implementation of staffing practices that meet the needs for autonomy, relationships and development of older workers. Who knows ? The Covid-19 pandemic may have helped keep older workers employed by forcing them to work remotely in organizations. Those working in the financial sector have so far been cautious about this organization for reasons of confidentiality, data protection or other reasons. This is no longer the case.