A new study makes the case for phased-in retirement as a strategy to offset skill shortages in Canada.

The Canadian Labour and Business Centre says the aging population and declining birth rate poses significant human resource challenges to Canada.

CLBC Director Arlene Wortsman is the author of a report that considers the potential of phased-in retirement options to give older workers new options and extend their contribution to the Canadian workforce.

Wortsman notes that each year the number of Canadians choosing retirement grows. Statistics Canada reports that 706,000 Canadians retired in the period from 1997 to 2001 – up from 605,000 in the previous five-year period. She says the increase is being driven by two factors –the boomer generation nudging up in years, and a trend to earlier retirement.

Wortsman argues that the newly retired have been largely overlooked as a pool of skilled workers. She notes that of those retiring since 1997, 53% had post-secondary education and 19% had a university degree. As a group, today’s retirees are the youngest, healthiest and best educated of any Canadian generation, she says.

She says the challenge is to balance the “freedom 55” aspirations of Canadians with policies that enable and encourage those seeking to scale back — but not abandon their connection to the workforce.

Wortsman notes that a 2002 survey of business, public sector and labour leaders conducted by the Canadian Labour and Business Centre found that phased-in retirement is not prominent on the list of possible solutions cited to growing fears of skill shortages.

In that survey, 48% of private sector managers cited skill shortages as a serious problem, but only 14% considered phased-in retirement as a “very important” option.

Phased-in retirement is a catch phrase that can include special assignments, mentoring, job sharing, and end to shift work, reduced hours and telecommuting. Unfortunately, says Wortsman, the tax, pension and paperwork implications of these accommodations pose barriers that can translate into inertia.

Wortsman says Canada must address the skill shortages threatened by an aging workforce and declining birth rate, in order to prosper. She concludes that we simply can’t ignore the potential contribution of those who have earned the right to an early retirement, but might be attracted to alternative workplace arrangements.