Statistics Canada's 2006 census data may well give Canadian employers reason to rethink how work gets done at their organization. The large number of workers approaching retirement age combined with the much smaller number of young workers entering the workforce will result in a shortage of skilled labour, and of employees in general.

To address this situation, many organizations may find themselves attempting to lure previously untapped sources of labour into the marketplace, while trying to convince seasoned workers to remain on the job. One factor that may be persuasive is the employer's degree of flexibility when it comes to work arrangements.

One size doesn't fit all

Older employees may be willing to extend their careers, particularly since, according to the census report, many may not have saved enough to retire. However, even those who have sizeable savings may be willing to continue to work if they can still take some time for themselves.

Similarly, those who have stopped working because they have young children or elderly parents to care for may return to the workforce if their commitments can be accommodated. Others may be more than happy to join an organization if they can work virtually instead of having to relocate. Some employees who thought about quitting in order to pursue travel plans or education may only take an extended leave of absence if they can do so and still have a job on their return.

Last year, Hewitt Associates' Attracting and Retaining the New Workforce survey asked employers from across Canada about the types of flexible arrangements they currently offer to some or all of their employees and those they are thinking of adding over the next few years.

• Flexible work hours allow employees to start and finish earlier or later than the regular nine-to-five work day as long as they put in the required number of hours. Many (84%) employers have already adopted this flexible work arrangement, and 90% expect to do so by 2009.
• Employees who have a compressed schedule may work, for example, 10 hours per day, four days a week – in other words, more hours per day, but fewer days per week or month. Survey data showed that 50% of employers currently offer a compressed work week, a figure that is expected to increase to 64% in the next two years.
• Job sharing will appeal to those who aren't ready or able to make a full-time commitment to the workforce. Last year, 43% of organizations offered job sharing and 60% anticipate that they will do so by 2009.
• Phased retirement , where employees gradually ease into retirement, is expected to increase significantly in the next couple of years. While 26% of organizations have phased retirement programs now, 55% expect to have them by 2009.
• An employer may offer vacation buying and selling, often as part of a flexible benefit plan. While 12% made this option available to employees in 2006, that figure is expected to double by 2009.
• Sabbaticals will become more popular over the next two years: in 2006, 44% of employers provided unpaid sabbaticals and 58% anticipate that they will provide them by 2009. Some even pay employees while they're away: 12% in 2006, growing to 20% in two years' time.
• When it comes to virtual work arrangements , some organizations permit employees to work at home part of the time (60% in 2006, 71% in 2009), while others allow workers to be completely virtual (34% in 2006, 41% in 2009).

One challenge with alternative work arrangements is that if they're offered to some employees and not all, they can give rise to claims of unfair treatment. For that reason, many organizations introduce formal alternate work policies or plans - AWPs. These policies also detail the obligations on the part of both employer and employee.

Until now, most AWPs were worker-initiated, and so it was up to the employee to demonstrate how the arrangement could work. As the labour shortage becomes more severe, however, some employers, especially those in the Alberta oil and gas industry, are introducing them in order to entice more workers into the marketplace – and keep them – by accommodating their needs.

An AWP specifies what the alternate work arrangement is, as well as the requirements an employee has to fulfill in order to be able to have this flexibility.

The primary requirement is usually that the arrangement must not interfere with the completion of the work at hand. That determination is generally left to the employee's manager.

For some positions, certain flexible work arrangements are simply not feasible. The AWP should clearly state when alternate arrangements are available and why that's the case.

Future flexibility

The wide-ranging needs of an increasingly diverse workforce can be met if employers are willing to think outside the box and consider new arrangements that provide flexibility. The question is no longer "why should we allow employees to vary the status quo?" – it's "why shouldn't we?"

Flexible work arrangements are only the first step in providing what the new workforce is looking for in their employment experience. Flexible benefit plans that allow workers to select the coverage they need – everything from orthodontia to orthotics – are becoming the norm at many organizations. The next step may be to introduce flexible rewards, where employees are able to choose how to receive their compensation, creating the appropriate mix of salary, benefits, retirement savings, vacation and so on that works for them.

Of course no organization should introduce flexible work arrangements if doing so would have a negative impact on its business – regardless of what competitors are doing. However, where it is feasible, employers may want to consider adding flexibility in the workplace in order to secure a sufficient number of employees of all generations and experience levels.