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5 Lessons to Take from the Retirement of Baby Boomer Workers
Editorial by Christian Saint Cyr
National Director / Canadian Job Development Network
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A new study by Statistics Canada is trying to answer the looming question of how the country will be impacted once the remaining baby boomer generation retires — and it points to immigration as a factor that could both help and challenge.
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The study, released earlier this month, looked at how different immigration levels and labour force participation rates would impact both the size and the composition of the labour force through to 2041.
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According to the study, labour force participation has declined since the early 2000s and it’s expected this will continue until 2030 when the last group of baby boomers reach age 65.
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Jean-Dominique Morency, a co-author of the study and demographer at Statistics Canada, said this is because after that point it will be smaller cohorts such as gen X retiring, which will have less of an impact than the large baby boomer generation.
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“The impact on the labour force participation rate will be small or there will be no impact on this rate,” he said in an interview about retirements after roughly 2030.
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The study notes that come 2030, if Canadian immigration remains at the set 500,000 permanent immigrants per year target set by the federal government, the labour force participation rate will stabilize and reach approximately 64.6 per cent by 2021.
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That would amount to a growth from 21.7 million in 2023 to 26.8 million in 2041 — by comparison, the labour force increased from 16.1 million in 2001 to 20.5 million in 2021.
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The study didn’t suggest there would be a major difference in labour force participation between immigration targets of 500,000 or 750,000, but did warn that a complete halt to permanent and temporary immigration as early as 2024 could lead to a decline as early as 2025.
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A halt could drop the participation rate down to the same 20.5 million seen in 2021.
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Age also is a factor influencing participation rates, with the study noting older workers staying on the job could have a “greater impact” on the overall participation rate.
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The study showed the proportion of people age 55 and older has doubled since the early 2000s, from 10.9 per cent in 2001 to 22.4 per cent in 2021.
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So, what are the lessons for workers who plan to remain in the labour market for beyond the next six years? Let's take a look at five specific outcomes:
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Leadership: The ongoing and pending retirement of baby-boomer workers is fueling a leadership gap. Like never before, younger workers are able to advance into supervisory and managerial roles that might have historically been held back for people who "put in their time."
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Salary Readjustment: Rising inflation has been driving increased wages in the past few years and baby-boomer workers have been the chief beneficiary of these increases. With a younger workforce, this salary can be readjusted bringing up the average wage of all workers.
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Lost Subject Matter Expertise: One of the benefits of gradual career advancement is that workers understand institutional changes. If there is a sudden departure of baby-boomer workers we run the risk of loosing institutional memory and this could impact how functional organizations are.
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New Systems Adoption: Almost the other side of the coin, when you have leadership with strong institutional memory, organizations can be resistant to new systems, technology and ways of thinking. We'll likely see the more rapid adoption of A.I. in the coming years.
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Challenges for Self-Employment: Just like baby-boomers have made up the majority of workers, they also make up the majority of self-employed individuals. This is going to create greater challenges in getting services from many independent operators such as self-employed skilled tradespeople, doctors, lawyers, veterinarians, notaries and other workers who build a business around their skill set.
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With each of these areas, there are opportunities as well as challenges and within job development and for those we assist, we'll need to be able to factor in these changes in both short- and long-term career plans.
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We’ll be discussing the employment outcomes of Indigenous Canadians at our #MotivatingMondays meeting of the Canadian Job Development Network, Monday Aug. 19th at 8:30am Pacific; 9:30am Mountain; 10:30am Central; 11:30am Eastern; 12:30pm Atlantic and at 1pm in Newfoundland.
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On the morning of Monday August 19th, 'Click this Link' to join the session LIVE.
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