[00:00:05] Russell Evans: This is Contributors, a show exploring how today's Canadian business leaders are building a better future for Canada. For the first time in Contributors, we had two guests instead of one. The first was Susan Black. Susan is the CEO of the Conference Board of Canada and is a previous Contributor's guest. Our second was Derek Dobson. As you may know, Derek is the CEO and plan manager of CAAT Pension Plan, which makes him my boss. And one of the things that Susan and Derek have in common is that they both have jobs in which they spend 90 percent of their time liaising with Canada's top leaders. So what we wanted to focus on today is what Susan and Derek are hearing from Canada's top leaders about the marathon for talent. So what I mean by that is the new pressure that we're all under on both talent recruitment and talent retention. But before we do that, I wanted to start with a land acknowledgment. I'd like to acknowledge that our CAAT offices sit on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples. It's also now home to many diverse First nations, Inuit and Métis peoples. We'd also like to acknowledge that Toronto is covered by Treaty 13 with the Mississaugas of the Credit. With that said, let's get into it with Susan and Derek. So welcome, Susan and Derek, thank you so much for being with us here today. 

[00:01:47] Susan Black: Delighted to be here, Russell. 

[00:01:49] Derek Dobson: Pleasure as well. 

[00:01:51] Russell Evans: My first question for both of you, really, but I'd like to start with, Susan, is what are Canadian leaders telling you, Susan, about a talent attraction and retention? 

[00:02:02] Susan Black: Well, the thing we hear most often, and I hear it in my individual meetings with leaders and we heard it in our C-suite survey this year that attracting and retaining talent is the number one internal challenged companies are facing right now. The war for talent has been going on for many years, but with the pandemic, with the structural changes in the economy, people are really struggling to find the right set of skills in the roles that they need to have filled. So there's definitely a tight labor market and it's a great concern. 

[00:02:36] Russell Evans: And what about yourself, Derek? What are you hearing from Canadian leaders on this? 

[00:02:40] Derek Dobson: Across over 300 participating employers in 14 different industries, what I'm surprised at is, first of all, as Susan said, talent is actually at the top of the agenda. This is new. So just having it on the agenda is surprising, but that it's a top of the agenda. So what I'm hearing right now is as organizations across different industries, it's impacting their ability to grow. So it's actually impacting the bottom line. It's impacting their plans, business plans on a go forward basis. And secondarily, I think they're also very concerned that at the departures that they've been seeing or the lack of ability to attract talent for growth, it's fueling burnout. So the adjustments that they're making, I'm seeing very large stay bonuses. I'm seeing very large pay increases. For example, in one industry, the professional services, I'm seeing pay increases 30 to 40 percent. So companies are feeling it, and we're seeing what the reactions are to it, and they're quite significant. 

[00:03:39] Russell Evans: Now, what does that a stay bonus for people haven't heard of that?

[00:03:44] Derek Dobson: Well, often you see elements of we're trying to attract somebody, so let's do a recruiting bonus to make them sign on. And people who are left behind are saying, hey, what are you doing for me? How are you going to retain me? So a stay bonus is really that retention payment to show that they're valued and they want to be retained. 

[00:04:04] Susan Black: And I think organizations need to be cautious with those kinds of techniques because they can have a spiraling effect. You end up increasing your compensation costs. And then we get into the wage price spiral, which is a problem across the board for everyone. Stay bonuses can have a short term beneficial effect if they're tied to a particular goal, particular project. But if you do it in general, I don't think it really is going to help, because it doesn't get to the core of what employee wants and what employees want and what will keep them in your organization. Yeah, but essentially what people want is to be paid fairly. They want some career mobility and the opportunity to grow their role and they want to feel respected and included. So you can throw all the money you wanted them to keep them to stay now. But if you are not attending to those really fundamental principles around talent management, you're probably not going to help yourself in the long run. 

[00:05:02] Derek Dobson: Absolutely, 100 percent agree. I think it's a Band-Aid short term solution because they had to react because they were caught off guard. But as Susan said, you have now have to look at the fundamentals and look at root cause analysis, and organizations need to figure out what their long term strategy is around talent management. 

[00:05:19] Susan Black: You know, I mentioned earlier that the war for talent has been around for a long time now. That phrase was coined in the late 90s. I believe, by some McKinsey consultants. But what's different about this one is I think we're seeing some structural changes. So the wave of retirement that is coming is going to be profound. We're not going to have enough workers for every job that's out there. The changes that are happening to individual jobs caused by automation and the disruption in different sectors is also going to keep this, make this an intense problem for a long time. We know something like a fifth of the jobs in this country are going to get disrupted by automation in the next few years. That demands a whole different skill set for people. So sometimes we talk about the labor shortage in the tight labor market. What we're really talking about is skills shortage. We don't have the right skills to fill the jobs that are changing in our workforce, and that is struggling with that is not just an organizational issue. It is a public policy issue. And it's an issue for individuals when they think about how do you want to manage your career. You have to be continually upskilling now. 

[00:06:32] Derek Dobson: And just to talk about the numbers briefly on that, this is not at the margin. So demographers are actually predicting that we could have four every five jobs that we need as a country, we're going to have four candidates. And I think that's a good segue way. What I'm hearing in my network is there's people are saying, oh, this is just temporary. The recession is going to shake this out. And then there's a group and I'm in this group. No, no, this is permanent. So I've changed the McKinsey thing from race for talent to marathon for talent. We need long term strategies to address this. 

[00:07:08] Susan Black: I'll share another shocking number with you. The four you know, the only having four candidates for five roles. You think about what's left and what's vacant. Those vacancies now account for $25 billion in lost GDP each year. That's 1.3 percent. That's a huge number, has a huge impact on the country's prosperity. So a challenge for employers is how do we fix the skills gap? How do we get people doing and acquiring the kinds of skills we need for the jobs as the jobs are evolving? 

[00:07:42] Derek Dobson: Because I run a pension plan, I'm always thinking about ten, 20, 30 years out and looking at the the data and the stats and just from basic economics 101, we've just talked about limited supply, especially in those higher skilled jobs to fuel innovation or fuel, you know, transitions that we need from a country perspective. So limited supply and in critical limited supply on that side. And then on the demand side, we're seeing from employer surveys 90 percent of businesses. So nine out of ten plan to increase their headcount and half of those planned increased by six percent. So limit shrinking supply, we talked about retirements briefly, increasing demand that there's a huge gap there. And then to Susan's point, I think there's also a productivity issue here because jobs are being taking longer to be filled, and the gap between the skills that you need and the candidates you have, that gap is growing. So it's increased training time, which can drag on existing resources, which can fuel the burnout gap. So the fit is also a challenge on a go forward basis. And if you don't have that good fit, your risk of departure or termination also increases. So there's a lot of factors going into these headwinds around talent management in the future. 

[00:09:04] Susan Black: Fundamentally, much more complex environment than we've ever faced when it comes to attracting and retaining talent. And a lot of the things Derek's talked about, I've talked about those are permanent structural changes. I want to pick up on something Derek said. You know, there are two camps of people who think these changes are structural. They're permanent. They're going to take long term policy and changes and organizational choices to be made differently. And the group that is now saying, well, there's going to be a recession next year, I think we're all fairly acquainted with that prediction. And when the recession comes, all those people who bailed during the pandemic or who left jobs or who want to do things differently, they're going to come back into the workplace. Well, here's what I would say. I think there will be a recession. I think it'll be fairly, fairly soft. And I don't think it's going to be long. All those people you think are going to come back, those are people who, during an unprecedented global pandemic, unprecedented in our lifetime, chose to quit and leave far more volatile, uncertain economic environment. I don't think they're going to be so scared by the recession. And I think one of the other outcomes of the pandemic is it has caused people to think deeply about what they want to do with their career, with their life, and they're making choices in a much more intentional and frankly, bolder way. The third thing I would say that makes us really different and don't count on the recession to solve your labor shortage is that we, for knowledge workers, for people who work in an office and work at a computer and and are primarily producing those kinds of goods and services, we have just been through a massive global experiment that demonstrates telecommuting and flexible work work. No question about it. And people are not going to forget that anytime soon, and they are going to continue to demand it. 

[00:10:57] Derek Dobson: I'm 100 percent agree again. And I've been listening to the economists of the big banks, and the consensus that I'm seeing is the recession isn't going to shrink the active working labor force. It's just going to shrink perhaps some open positions. It really hasn't solved anything other than a few job help wanted signs are going to come down. So the recession, I agree. I don't think it's a solution. And even if it is, it's a minor time period and we're trying to talk about multi-year issues in Canada, not just what might happen for a quarter. 

[00:11:35] Russell Evans: Some of this is hitting Canada in a particularly vulnerable time in so far as we're dealing with retirement of the boomer generation. And I'm thinking about this today because we had a retirement party for a CAATsters yesterday, and this is someone who helped build our plan. And I was thinking about, you know, there's so many organizations that are dealing with these market forces and at the same time, the people that are kind of the stewards of the organizations will not be there to pass on the knowledge. What are your thoughts on that? 

[00:12:12] Susan Black: Well, the statistics we have suggest that roughly a fifth of the current workforce is going to be retiring in the next few years. That is a huge number. That leaves huge open vacancies. And I think that's going to accelerate. I think that number is probably less than it's being reported to be lower than it probably will be, because I think people are making different choices. It does vary by sector. Some sectors have been dealing with this for a longer period of time, but it's coming up. So the first thing I would say is employers can have an impact on this if they're willing to be more flexible with work arrangements. So if you want to continue to keep that institutional knowledge, then be flexible about what your demands are on them. You know, most people, when they get to their their sixties or seventies, still want to work five days a week, nine to five. But can you bring them in on a project basis? Can you bring them in a couple of days a week? I'd be surprised at the number of people that want to keep their, you know, their toe in the water, if you will, or would like the extra income who would be willing to do that. There has been a long, many decades of resistance to do that. I mean, I think we still have managers today who subscribe to you had a certain age or when you say you retire, you get your gold watch and off you go. And it's very binary. I think we have to think about it much more flexibly. And I think that can help ease the crisis. One of the things that makes this difficult, though, and i speak as a former chief H.R. officer is you have to be very careful about saying the R word to somebody because you don't want to be mistakenly accused of trying to push them out the door or discriminating based on age. So having conversations with people about their career journey, their career path and starting early on, not just when they get to the later years of their career, you're making that part of your corporate culture. Your talent management strategy can help you work with people so that it's a win win situation. When you really want to and you need to keep them in the workforce a little longer and you need them to transfer their knowledge. Lots of benefits to older people, you know. By the time you get to that stage, you're probably not as interested in engaging in the political shenanigans, let's say that go on in many organizations. You're not looking to get the next job. Many you lose on it. They want to contribute. They want to be engaged. They want to enjoy their colleagues and so on. So shifting the corporate mindset around that I think could be helpful in easing the talent crunch that we're facing now and as Derek and I believe for a few years to come. 

[00:14:47] Derek Dobson: And I'd like to pick up on Susan's comments again, she's bang on. But so on the data side, absolutely, there's a lot of sectors that have a bulge, as Susan said, like 20, 25 percent of people eligible to retire now and likely to retire in the next five years. And the talent pipeline is not replacing those. There's misalignment with the education sector, but they're trying to fill gaps there. But there's no grand plan to sort of fit people with jobs. And more employers were pushing training outside of their mandate. Now I see more and more employers pulling in education and training into their mandate, and just getting people who are dedicated and willing to learn and have a growth mindset and bringing them in and training. Seeing lots of companies, including at CAAT, we've developed CAAT Academy to train people up. So hire good people, then teach them the skills. So before you could just go out and say, I need these three skills and you get them. So it's I think we have to pivot there. And one thing that I'll mention, based on what I see across all of our employers is voluntary departures and retirements can be contagious. So if you start to get a little bit momentum of people leaving, then that can actually, whether it's by termination, by voluntary leaving or by retirement, other people start to reflect on that themselves. So it brings the conversation or brings the awareness of those things element. And then coupled with what I'm seeing on the retention side and the attraction side, well, why don't we pivot to the attraction side, that a lot of companies are offering a pretty robust referral program. So if you have a star leave you and they're respected by their peers, you're not just losing one employee, you're actually at risk of losing a handful of employees to those things. So I think that's what I'm seeing across different industries is talked about before stay bonuses, but also referral programs are getting a lot more robust. So I think the competition for resources is heating up. And I'll mention in one particular industry that we're in. So two market leaders, and I'm not going to mention them, two market leaders there. So market leader number one, $5,000 signing bonus and a $5,000 referral bonus, company B said okay fine. We're going 20,000 attrack. Like so you see that in what Susan mentioned this spiraling. It's a bit inflationary which we're also trying to combat. So there's a lot of stuff going on in microcosms, but I think that will filter into larger components of the talent market. 

[00:17:38] Susan Black: They all accumulate. So I suspect those organizations you're talking about, Derek, are larger, are profitable, have money to do that. We know Canada is a country of small and medium sized businesses, 97 percent of them. So it's very hard for those businesses to compete with those kinds of benefits or attraction tools. So again, that it puts a lot of pressure on companies when they're trying to fill the roles that they need to fill, which, as we said, has an impact on productivity. 

[00:18:10] Derek Dobson: Absolutely. I was talking yesterday with a company from New Brunswick, 56 employees and basically their total H.R. budget gap, they have two percent. So they're trying to figure out what do they do with that two percent, because they're dealing with a supply chain issue where they're not able to get chassis in, but they're in that other theme that i'm seeing not as prominent but it is a sub current theme of a bit of a hoarding resources. So even though there's not necessarily full work for them to do, they're really nervous, because what we saw in the pandemic is people leaving. If it happened for many, many months, they just move on to a different industry. So there's more and more employers, even with tight budgets, who are focusing on retaining. So to me, retention is the number one tool that has to be utilized in the marketplace because of the retraining, not being able to access. And back to Susan's point, CAAT and some other employers as well, we're focusing on nontraditional resources. So can we support phased retirement? So I want to retire. Is that you want to fully retire or you just want more time? We can accommodate that. We will move you down to two days a week. Working parents, return to work from paternity leave. It doesn't have to be 100 percent. Maybe we have an employee who's back two days a week. That was the perfect balance for them. We can make it work. And then we're also tying very much in to a very vibrant student population. And I'll tell you, there's some amazing rock stars and we're getting good percentages of people who come in. They see our culture, they love our culture, and then they come in and as full time employees. So they're productive as students, but they're also excited to to join us on a full time basis. So as Susan is alluding to and as I'm articulating, you have to have a multi-pronged approach to to talent management. 

[00:20:12] Susan Black: And I think one of the central features of that multi-pronged approach has to be, Derek, what you raised about flexibility. And again, this is an outcome of the pandemic. People have enjoyed enormous and unprecedented flexibility about how they do their work. Again, knowledge workers, we're talking about office workers. And once you tasted that, you're not going back. So the ability to lose the old mindset that everybody has to be five days a week and everybody has to be full time permanent and everybody has to be in the office, the quicker an organization can wrap its mind around how to do it differently, the more competitive they are going to be for employees. And there is an abundance of evidence around this now. Anecdotal and research wise, that people want flexibility. They don't want to be there full time. I'm sure we both have stories of employees we've been able to get because in the case of the conference we're totally virtual. Derek, I think you're more of a hybrid model, but employees you can get because you can provide that employees who who are shopping jobs right now to find that because employers have said you must be back. So flexibility is going to be a huge long term theme in what you need to do to keep employees. And I definitely agree with Derek. It's like customers. We all know it is much more expensive to attract a new customer than it is to retain an existing customer. It's the same with employees. 

[00:21:35] Derek Dobson: Yeah, absolutely. And I couldn't agree more. And in my network of CEOs and reaching out to other leaders, we're challenging ourselves to how do we need to adapt our organizations. And the themes that I'm seeing come out of that, definitely piggyback on Susan's theme. So active listening. We have to listen more closely to what our employees are asking us for and be open to change. Number two, we can't rely on our, as humans, we often say I have experience, but it's a backward looking experience, and we try to extend that in the future. And that's very dangerous. So we really have to have a more thing about the conditions. The inputs have changed so much that you can't rely as much on past experience. You have to come in with an open mind and adapt on a go forward basis. And then the third piece is really continue to network by gaining insights from others inside your industry, outside your industry, what's working, what's not working. And I think Susan and I are both data people. So it's like, look at the numbers, look at the data. So don't trust your instincts as much, which is very hard for a lot of people to adjust to and actually seek out data on what's working and what's not working. 

[00:22:50] Susan Black: And let's spend a couple of minutes on data and on the need for evidence about what is going on in your own organization. So for many, many years, many organizations have done engagement surveys, which are a fantastic tool, and I think everybody should be doing them. We at the Conference Board, even though we're small, we do it every couple of years, same survey. So that we have a baseline, we measure against it, but you have to go beyond that. So I'm a big believer in polling, you know, smaller, quicker pulse surveys in between on key questions. And make sure you understand how to write a good poll, what scale to use and how to frame a question, so it's not leading, but I think doing that is important. And then I think the qualitative side, actually talking to people, so having forums where they can come and they can share with you what they why they reported the way they did on the survey is really key. Navigating a complex environment like this where people's desires are changing and they see their opportunities shifting to me means you got to give them skin in the game and helping design the environment they want to be in, and telling you what's really important to them. And if you can create those channels internally in those vehicles, that helps shift the culture to be one that is perhaps a little less command and control and top down and a little more inclusive. And Derek used the phrase active listening, be more oriented towards that. And I think people have expectations that will be the way of the future. And those are the environments they prefer to work in by and large. 

[00:24:19] Derek Dobson: Hundred percent agree. And our CHRO, Julie Giraldi is leading the charge at CAAT. And the experiences that I'm seeing are like engagement committees, a DEI committee. People want to have a voice. They want to make sure their organizations have a very strong purpose, first of all. But they also want to see how they fit into the strategy and how they are contributing. They just don't want to be moving widgets around. They want to say, I want to have an impact, whether that's on culture, whether that's on performance, whether that's on purpose. So you have to, as you're saying, Susan, it's not a top down command and control type environment. It is an inclusive, open dialog to make sure and people with a lot of experience shouldn't be, going to use the word pigheaded, to suggest that they know more. They don't. Like the front lines are hearing what our members want, are hearing what our employers want. They are an amazing source of not only information but also solutions. So we've been launching all these innovation events, which brings 60, 70 people across our organization saying, here's three problems we need to solve, and these solutions an hour, come out much better than ever a senior executive team could figure out over a week's retreat. So engagement is huge. And we're very fortunate at CAAT that our engagement scores are 88 percent. So we're in the top 10 percent of the financial services industry, and it's a competitive advantage to this global theme of attraction, retention and engagement. 

[00:25:55] Russell Evans: Yeah, I'm glad you brought up culture. I started at CAAT in the pandemic, and this is the strongest, most positive culture I have ever worked within. So when I hear leaders say, you know, we have to bring people back to the office for cultural reasons, I call baloney on that. I call baloney on that big time. 

[00:26:17] Susan Black: Building culture, building a strong, healthy culture is hard work. It requires a lot of self-awareness. It requires a lot of intentionality about your behaviors. It requires being consistent in your messaging over and over and over again and having a really clear framework of what those values mean. And that's not as easy as looking at your spreadsheet and forecasting the next quarter. You know, it's messy work and it's hard work. It's human work. 

[00:26:45] Derek Dobson: Yeah, we talked before about not relying on your past experience and what worked in the past. And let's face it, most senior leaders have been working in an environment for 20 or 30, 40 years, and it's served them well to go with those gut instincts. And sometimes we have to but again, the inputs and the conditions have changed so much. So I think flexibility with your talent is a competitive advantage. You actually have to engage and understand. In CAAT has been alluded to, we've we've basically said we're going to leave it up to the managers and their teams because most people get their satisfaction from work, from who they're working with and their direct manager. You need to give them the flexibility to what works for their team. Finances needs is going to be different from communications, is going to be different from investments and administration. You can't have a top down approach that's going to work for everybody. And for me when I keep, when we talk about bringing people in or asking them to come in, it has to be meaningful. It has to be collaborative. It has to be innovative. It's not, as you said, hey, let's all sit together with your headphones on. That makes no sense. You force me to commuted two hours that day in bad weather and all, so they're going to be disgruntled if it's not meaningful. So you really have to make it meaningful. Having said that, we also experienced in the early part of the pandemic is that for people to feel connected, they needed a better onboarding experience. So we are over indexing on that onboarding experience and getting the hold. Again, not having that one person come in and sit by themselves. That's not the onboarding experience I want to talk about, but getting the team and being purposeful about making sure people start to and I know culture isn't in person necessarily, but having those connections built in where we've seen our departure rates cut in half by adjusting our onboarding experience. So as we're all saying, has to be meaningful, has to be thoughtful. And this for me, what we're in and we're going to be in for a while, I call it the grand experiment. And with experiments you have to test, assess, readjust. So I think this is a model that we have to continue to follow in this area. 

[00:29:19] Susan Black: No, I completely agree around, you know, test and iterate and readjust. And hopefully organizations understand that they have to do that, and that it's okay to say that this didn't work. And just because something didn't work doesn't make the leader or the manager a failure. We learn from that. I send that message to my organization all the time. If we're changing, we're pivoting, we're going in another direction, that doesn't mean the past was a fail. It just means it's time to move on. And we've reassessed and it's a hard sort of cultural learn to push through though, because the business world and the way organizations are often structured, it's binary. Like you pass, are you fail, right? Or you did really well or you change anything. It undermines the credibility of what was done in the past. But I think that's important. I want to pick up on what you said about onboarding, because when the Conference Board made the decision to become entirely virtual, we were very intentional about four different things. And the first thing was we included and made space for employees to help figure out how we were going to do this. So we had employee task forces and they looked at things like work from home policies, technology, policy training, approach, what were we going to do? So again, that goes back to our earlier discussion. You have to give people a voice, you know, good basic change management. People will go with change if they feel they've been listened to and heard and they've had some skin in the game. The next thing we did is we hired a full time internal communications manager and we're less than 200 people. That's a big investment, but it paid off enormously. But the third thing we did was we invested in the employee value proposition very significantly for our size. So as you know, Derek, one of the major things we did is we joined the CAAP Pension Plan. We went from a group RRSP to giving people far more financial security. Another aspect of increasing the employee value proposition was we gave more vacation, based vacation. We invested in training, but we really amped up our onboarding too. Because we realized if you can't walk down the hall and meet your new colleagues, there has to be a substitute for that. There has to be a replacement for that experience. So we did things like every month I give the onboarding orientation. We have a deck. I spend a couple of hours with every with groups of new employees and I walk it through. So I get to meet them. They get to meet me. We have discussion. It gives them a mental map of the organization. We follow that up with other onboarding sessions about parts of the organization that are important, like our knowledge management and our marketing and so on. So we do that. We now pair everybody with a buddy who comes in. And then so things like that do make a difference and they do help connect people in a way that, you know, reinforces the culture, again, makes them feel included and respected. And if this whole conversation about the retention attraction of talented employees, these are long term programmatic changes that organizations can engage in to really help reinforce that and, you know, position the organization for more success. Because it is getting nothing except more competitive to get talent now. 

[00:32:29] Derek Dobson: Yeah, that's so powerful. The thing of what we need leaders to do differently is we need to interact with each other and share experiences. And what I've also seen with the organizations who are doing very well, it's back to that mantra that we were sharing before. If you're going to fail, fail fast, and if you're going to make mistakes, don't repeat the same mistakes. So those are two things, but you have to be open to making mistakes if you're going to be successful. But you then you have to have the supporting culture that mistakes aren't a black mark on the manager or the organization. It's no, that was an investment. And we failed fast and we moved on. So yeah, it is about culture that willing to take risks are going to make companies and organizations succeed. 

[00:33:18] Susan Black: And in fairness, I think we've known all these things for a long time. I am sure there have been a multitude of Harvard Business Review articles on all of these issues and these ways of managing and promoting the health and prosperity of organizations and employees. But again, what's different now is you really can't ignore them anymore. Or you ignored it, you're on peril. Now, the circumstances of structural changes in the economy, the grand experiment of the pandemic proving what is possible and shifting people's mindset, the looming retirement crisis. That means really, that take these things that we've known for the last few decades in terms of how you manage well. And as I said, you fail to put them in at your own peril and that is harder for managers. One of the other things I always say to organizations now is that it is tougher to manage in a hybrid or virtual world. You have to be much more intentional. Every individual manager has to be much more intentional about the conversations, the decisions and the directions they're giving. You can't fluff it off anymore. So you really need to understand performance management and hold people accountable. You really need to coach effectively. You can't, that sort of buffer that exists if we're all in the workplace and we can make assumptions and it feels good, okay, that's gone away. So it's tougher and it requires more of managers. 

[00:34:39] Derek Dobson: And reflecting a little bit on all these valuable pieces of advice and all these elements are are also directionally positive. And when I'm reaching out to our network and internal discussions, this is all good. I only have so many resources. What should I focus on first? So I want to pivot slightly to that is. My advice to business leaders and people leaders is you have to focus first on retention. If you have departures, that's going to fuel burnout and that's just going to continually put you on a negative spiral. Some organizations, including ours, we've estimated because I'm a numbers person, we've estimated that each departure is the equivalent of nine months salary for that person. That's a huge impact. So how do you focus on retention? You have to look at that long term wellness and the expectations of staff especially because of the industry that we're in and the data that we review and look at, people are expecting. Most people, 80 percent of workers are expecting their employer to be leading their personal wellness journey, whether it's mental wellness, physical wellness or financial wellness. And then the financial wellness side, it's not just my paycheck or my benefits program. It's what are you doing about my retirement wellness? You referenced that a little bit, Susan, that it's actually a very powerful lever. And we put some information on a pensionsmatter.ca website, with a lot of stats to help people understand what are really employees looking for, expecting. Because I don't think they're going to come into the H.R. department and say, I do not have the financial skills because that is a career limiting move in their mind, but they're open to sharing that in surveys. And one example on that pensionsmatter.ca website is 60 percent of people won't even consider working for an employer that doesn't have a pension arrangement at work. So you are really shrinking your available workforce if you do not look at financial wellness in more holistic, holistic sense. So so my advice to leaders is if you don't fix the retention issue, all of those other issues get a lot bigger and more complicated. 

[00:37:04] Russell Evans: I want to jump in on that because I actually have a pension question. I'm not sure if it's for Susan or Derek. Maybe either of you can answer it. Which is Susan mentioned earlier that one of the things that she did Conference Board of Canada, is enhance their pension plan through through CAAT. And I think there are likely people listening today, business leaders who are thinking, you know, I'd love to do that, but I know DB plans have this long time horizon and I think it might put the employer at risk if the benefits can't be paid. What kind of option to those employers have they're interested in this, but they don't want to increase their risk. 

[00:37:39] Derek Dobson: Happy to take that. And this is not meant to be self-promotion of our pension plan. But like we've been talking about, there's more creativity now in the pension retirement space. And those long held beliefs that defined benefit plan should be avoided at all costs. They're not opening up their eyes to that. There are new innovations that have happened in the industry. Capping one of them, there's others as well. And essentially we listen to employers and they said, I don't want anything on my balance sheet. I want predictable costs. And like ideally the same cost that I'm currently putting into my retirement plan. And then we surveyed Canadians, and the Canadians said I need predictability, I need security, I need a pension that lasts for my lifetime, and one with inflation protection. So we just listened and we said, how about we design a product that has fixed cost for employers and nothing on the balance sheet and for the employees, the attraction, retention, wellness, productivity, values that are associated with the traditional defined benefit plan. So we took what was a single employer defined benefit model, which was doing wonderful things from an H.R. goals perspective, our people goals perspective, and we paired it with what financial CFOs needed in the workplace. So we are definitely one of the unicorns in industry that you can have the best of a group RRSP or a defined contribution plan and the best of defined benefit plans at a reasonable, affordable cost. 

[00:39:12] Russell Evans: So one final question for me for both of you, which is if we have people, business leaders listening today, watching today and they're thinking, where do I start? What's the first thing that I do for talent attraction, talent retention? What's that kind of first step? Susan? 

[00:39:34] Susan Black: Well, I suspect they're doing a lot of things already. So I'm going to give you two things. The first comes back to what we talked about around data. Always understand your own workforce. Always be talking to them. Survey, do focus groups, create vehicles where you have employee feedback on a regular basis. Because as senior leaders, we always run the risk of thinking we know everything or we know too much, or as Derek said, we can rely on our gut in our past experience. So always come back to your data and your evidence and have it an ongoing program. The second thing I would say, and this is we're seeing this in the surveys we do around HR Matters. You cannot possibly overestimate the need to communicate all the time about what you're doing. People need to hear it multiple ways. They need to hear it through multiple channels because everybody's bandwidth is fairly constrained. But there's an expectation, and I think rightly so, around transparency and authenticity. And people may not like what you're doing and they may disagree with that, but you're better off telling them and being honest about it than having them operate in a void. Because we know, you know, nature abhors a vacuum, right? They'll fill it with things that aren't true and aren't what you want to message. So continually talk to your employees and use the methods that are sound for figuring out what they want, what they need, what their environment is looking like, what can you do to make sure they work to their full potential and communicate, communicate, communicate. 

[00:41:06] Derek Dobson: It all starts with retention. So on the impact side, avoiding burnout, avoiding those large costs for departures, avoiding the time that you need to recruit on board, train up people. These are these are massive dollar costs, but they're also massive time costs for people. So that's the issue and that's the business case. So what is it? You have to focus on listening and communicating, as Susan said. You have to adjust. You have to be willing to do different things and trying them and assessing. We talk about poll surveys, so you can't just set it and forget it. You absolutely have to invest in this. And as we started this, this is a focus of boards. This is a focus of senior leadership. And it's not going away. It's going to get harder. So I would say you have to keep this at the top of your agenda. 

[00:42:09] Susan Black: Frankly, H.R. matters, talent matters should be at the top of every leader's agenda. I think that's one of my three biggest priorities. And it's constantly there, and I'm working on it every week. Do we have time to come back to retention? I just want to make a couple of comments there. So, Derek, I agree with you. Much better to retain employees, but I do take a bit of a nuanced look in that. I think there are organizations who don't have long enough career paths for employees to stay for a lifetime, so we have to expect some turnover. I know that's one of the things that we are increasingly getting real about at the board. There are people who are going to after five years or eight years, decide, I thought what I need here in my career, we're going to move forward. And we think that's part of a whole pattern of people having more jobs and looking for more variety going for. What that means for us as a management team is we've got to make sure that we structure work or we can structure and execute work in such a way that it doesn't create that burden that you're talk about, because that is very real. You know, that's the big cost. And that's one of the big costs when someone goes is that someone else has to do the work. So we are looking and experimenting with ways where you reduce the work, you change the schedule, you do whatever itself. So I think for many organizations there is a reality. There is going to be a turnover that you can't avoid. I think that's exacerbated by the fact that people are just making different lifestyle decisions that have nothing to do with their employer. I'm going to go live in a foreign country for a while or we've had a number of people. They go back to school in completely different things than they ever came here for. And you're kind of like, good for you. So there's some of that. And the reason I want to bring it up is we're seeing it in our survey research. And we saw early in the pandemic, the sort of mid-pandemic, turnover rates for professionals had risen by ten points, which is enormous, and we're not seeing it come down a lot. So I think there is something structurally changing at different levels of the organization and  that interacts with at different points of people's career. So I think I'd love to retain everybody because we had [00:44:15]no recruiting function. [0.5s] That would be a delight to. But there will be people who are going. So I think and you have to structure the organization to be able to manage that too. 

[00:44:23] Derek Dobson: Yeah, absolutely. I think there's a big difference between desired turnover rates and unwanted turnover rate. 

[00:44:32] Susan Black: Yes. And it's how high. And I guess that's what I'm saying is I'm see the typical turnover rate edging up and it seems to be fairly permanent and knowledge workers now. The other thing we look at, of course, is what's your involuntary turnover rate? Because that should still be very low. And if you're seeing that higher than there is something in your screening and your recruiting process is often off kilter. So we look at those things too. But it's a topic is, as we've said, should be front and center for every leader, no matter what part of the organization they're in. 

[00:45:05] Derek Dobson: Absolutely. And I'm seeing from a lot of leaders struggle with increases in unwanted areas of turnover. I mean, my only my own personal view for the industry there that I'm in is really healthy turnover is in around that four to six percent range that provides new thoughts, new people coming into the organization. But if I was to look at a checkerboard approach, you absolutely need that knowledge base. So you need some long service workers and you need some turnover and stuff like that. So it is a more absolutely, a single number is not really helpful here. It has to be a very intentional about what areas you need to retain, what areas need to focus on. What I'm seeing from some organizations is turnover in the 40 percent range. And that is just impossible in my mind to manage that because it just doesn't make sense from a cost culture operational perspective. So it's bringing down unwanted turnover I think is the challenge for a lot of organizations. And that's where we're seeing a lot of new ideas come to the front. And that's why they're calling us is they even if we can move, let's say, job A has currently a two year, three year turnover, that companies are saying, I need to squeeze that out of five for it to make economic sense. So that's where companies are calling us is because we can typically reduce involuntary turnover by about half within three years. So I agree it's not necessarily that it's career type stuff, but it's not me manage my goal into an acceptable level of turnover, a healthy level of turnover. And I think that's to your point, Susan, that's the challenge, is finding the right balance between re-energizing an organization and going down a spiral. 

[00:47:01] Susan Black: Yeah, you know, I agree. And it was shocking how high the turnover got in the pandemic, because I certainly know organizations that are 30, 35, 40. And I'm talking about big organizations and, you know, hundreds and hundreds of workers. That it's very difficult to sustain over a period of years. I don't think that's an unusual level of you're going through a transformation or a turnaround, but in a stable organization, very tough. The sectors I've worked in, the regular turnover would be 10, 12, 13 percent. That's what you would see, you know, holus bolus. That's the number I'm seeing move to 15 to 18 and seems to be stabilizing there. But again, I think part of my message here is to leaders take a nuanced approach to turnover because within that you're going to want key talent that you never want. That's the four to six percent. Don't let those people go. You know, wrap your arms, do whatever you can. 

[00:47:51] Derek Dobson: So I'm often asked by leaders about, like, how does your defined benefit plan help me manage this retention bucket? And what I'm seeing is there are absolutely a core group of employees, I think some researchers and others call them the traditionalists that are looking for that longer career. We excel in that group, so we're providing a very solid foundation to retain those traditionalists. And when we talk to those people who are just looking for that three to four year gig, it's like you're no worse off. You're actually better off. Had you been in a group RSP define, so you have no downside risk for that higher portion of your population, but you have huge upside in retaining your traditionalists and a lot of researchers and report writers, that I see, is you need to have 40 percent of your workforce has to be traditionalists if you're going to succeed. 

[00:48:47] Russell Evans: So, Derek, I know that you are committed to innovation and you talked a lot about that today. I wonder if you can tell me a little bit more about how CAAT is innovating for its members. 

[00:49:00] Derek Dobson: Absolutely. So first of all, it's active listening that we've talked about. And we have roughly 9,000 interactions with our members on an annual basis. And then we also have a very comprehensive survey that we send out to all our members, all our 80,000 members. And it's really those are a couple of the sources of information that drive our innovation. Peoples lives are changing, when they get hired, their life stages that they have about raising a family and buying a house. So things are always changing. So really our innovation starts with what our employees actually asking the problems for us to solve. And they're parlaying that either directly to us as a pension plan to help them on that side or through their employer. So we also engage employers in saying, okay, what are your employees saying and what problems do we need to solve for them, but also solves your own problems on attraction, retention, engagement and productivity. So what we're doing in the innovation space is really just saying here are the problems that we're seeing, which of those can we solve? 

[00:50:11] Russell Evans: And on a specific basis. Can you tell us a little bit about an innovation or two that the plan has developed for CAAT members? 

[00:50:21] Derek Dobson: Absolutely. So in 2022, for as an example, what we were seeing is that members wanted more flexibility to control their budget. They absolutely believe that they need to have an investment in their future self, so they need to save for retirement. But they also know that they have current challenges that they have to manage through. So we innovated by listening to members, listening to employers and something we called DBplus with Contribution Choice. And what that is, is the employer want to attract retain staff so they have a base contribution rate. Let's call that three percent from the employee, three percent from the employer. And that's going to give them that retention bump and that engagement bump that they're looking for. But that's not going to necessarily accomplish all the goals that the members have and saving for retirement. So they provide an optional layer, let's say, and if the employee contributes one, two or three percent more, the employer will match. And as you think about life time events for people maybe before or kids before their house, they're saving six percent from the employee, six percent from employer, all tax deductible. So it's all all very tax efficient. Then children or housing things come along. Hey, let me scale back that just to the base, the three in three core and then, hey, the kids are out of the house. I'm going to max it back out again. So that's the type of innovation that we're doing, is we're listening to the life needs of our members and saying, saving for retirement is so critical. We don't want to create an artificial barrier to doing that. So we're going to adjust our product and our design to meet your needs. 

[00:52:03] Russell Evans: So on a similar note around listening and then responding with innovation, I want to ask you about something I've heard about called the Employer Recruitment Toolkit that CAAT offers. What is that and how does that work? 

[00:52:16] Derek Dobson: Yeah, happy to expand on that. The recruitment tool kit is something that our employers are loving because let's reflect on that briefly. They know that having a defined benefit pension plan in the workplace is a big deal. They see it in their retention stats. They see it in their survey. Our own survey shows that 86 percent of our employees came to our organization or stay at our organization because of their pension plan. So how do they extend that power to their recruiting efforts? So they're asking CAAT to create some digital assets and other elements that they can put on their recruitment site so that they can say, hey, we have an amazing pension plan. This should resonate based on all the surveys we're seeing that 60 percent of Canadians won't even consider an employer that doesn't have a pension plan. 80 percent of employees expect their pension plan to be looking after their long term financial, health and retirement. So what we're trying to do is elevate that their pension plan is superior to what you're seeing in the marketplace. A lot of marketplace participants have group RRSP or a defined contribution plan, but those are more savings arrangements. They're not a true lifetime pension benefit, and this is what Canadians want. So employers are saying, help me extoll the virtues. You're the experts. Help me raise our profile in the recruiting community. 

[00:53:42] Russell Evans: I love that. I think that makes so much sense. I remember when I was first starting at CAAT, our COO, Kevin, said to me, Russell, if people could pick their pensions, they would pick a CAAT pension. They'd pick a defined benefit pension. I think what's exciting about the employer recruitment toolkit is in some small way it lets people pick their pension because they get to pick an employer that offers one. 

[00:54:08] Derek Dobson: Absolutely. And the amount of trust that we build quickly with candidates and employees is huge because we're a not for profit trust fund. There's no paying out dividends to shareholders. Every single dollar that comes into our pension plan goes to member benefits. That really aligns well with what people expect from a pension plan. They want their money to go as far as possible and to give them maximum benefits. And that's what CAAT does amazingly well. There's lots of studies that show per dollar contributed, we deliver the most pension per dollar. So we're efficient. We're trusted. We're aligned to the members interest. And that really is a competitive advantage for employers. 

[00:54:54] Russell Evans: So Susan and Derek, thank you so much for being here with us today and sharing your insights on the marathon for talent. Really, really appreciate it. And to our listeners, I hope you enjoyed this episode and tune in again. You can find Contributors on wherever it is that you listen to podcasts. Thank you for listening to Contributors, the podcast for Canadian leaders. We hope you'll take away some valuable insights and lessons from today's conversation. To help us reach even more listeners, please subscribe, rate and review Contributors on Apple Podcasts. If you'd like to learn more about CAAT, visit us at CAATPension.ca.