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June 22, 2006 Highlights An aging and shrinking workforce, plus generational attitude differences, create major challenges for employers, but also offer a significant opportunity for those willing to be proactive.
Hewitt
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The Changing Workforce: Challenge and Opportunity Canada’s population, and its workforce, is aging – as is the whole developed world’s. The combination of longer life expectancies and lower fertility rates has led to large demographic shifts, with Japan and Europe leading the trend. North America is following right behind, Canada even more so than the United States, due to higher birth rates in the U.S. In Canada, the median age – half are younger, half older – is now 39.5, up from 33.5 just 15 years ago. Seniors, those aged 65 and up, now make up 13 per cent of the Canadian population; by 2031, the percentage of seniors is expected to approach 25 per cent. The Shrinking Workforce This demographic shift has huge ramifications for Canadian society, and particularly for the workforce. The ”Baby Boom“ generation (those born between 1945 and 1965, roughly) make up about one-third of the entire Canadian population, and an even bigger percentage of the workforce. This generation, affectionately known as the ”Boomers,“ is now starting to reach retirement age. That means that a massive exodus from the workforce will take place over the next 20 years. Instead of five working-age people for every one person over 65, the ratio will drop to only three to one by 2025. Immigration is not a solution for filling the gap. In 2001, there were 1.86 million workers aged 55 and over, and only 1.83 million immigrants to Canada in the ten years between 1991 and 2001 – and not all of those people would have joined the workforce. Furthermore, the number of older workers in 2001 did not include the huge Baby Boom group, meaning the number of older workers will soon be much higher than it was in 2001. Canada’s immigration rates would have to increase enormously to replace the massive number of retirees expected in the coming 20 years. Even if this were politically feasible, there simply may not be enough potential immigrants to fill the coming labour shortage, especially considering that all the other industrialized countries are in the same situation. The bottom line: employers will soon be competing for employees at virtually all job levels. Skilled and experienced people will be at an even greater premium. In the United States, for example, it has been projected that labour demand will exceed supply starting this year. By 2012, in a mere six years, more than 6 million workers are expected to be needed than will be available. |
