Enter your email below to receive weekly updates from the Ashton College blog straight to your inbox.
In March of this year, the Royal Bank completed an analysis of the Canadian labour market suggesting that the baby boomer retirement shock wave had already begun to affect the Canadian economy.
The Royal Bank’s basis for analysis was that the participation rate has continued to decline over the past few years. The participation rate is the portion of eligible people from working age (15 and up) who currently “participate” in the work force.
Statistics Canada reports that the drop in participation rate amongst the working age population is due large in part to retirement, with the majority of those claiming to be unemployed reporting that it was due to personal choice.
This has potentially negative consequences for the Canadian economy as the labour gap will not be easy to fill. Immigration alone will not be enough to fill the vacant spots left by the baby boomers. This means that governments will have fewer workers paying taxes while also incurring additional costs associated with an aging population.
Provincial governments are expected to be hit the hardest as they are responsible for the cost and administration of the healthcare system with federal transfer payments tied to the growth of the nominal economy. Nominal value is static and does not take into account changes to the market or outside factors which can affect the economy such as large-scale retirement.
Federally, the baby boomer retirement issue has been used as a prime justification for changes to the federal job training programs, as well as, the Temporary Foreign Worker program which has garnered some controversy in recent months.
It is also important to note that the Canadian economy has yet to fully recover from the recession and the unemployment rate is still higher than it was in 2008.
These changes mean that the role of the Human Resources professional has never been more crucial as companies seek out experts to respond to the challenges of the changing workplace.
Not only will Human Resources have to find skilled replacements as baby boomers retire, but they also have to work to bridge the generation gap between new and old employees. In addition, Human Resources professionals will be crucial when it comes to thinking of new and creative recruitment strategies, training, and skills development.