The last of the baby boomer generation will be turning 65 in 2030, marking a pivotal moment in a demographic squeeze that has loomed over Canadian workplaces for years. By then, most of this generation will be retired – and the labour market will face a new reality.
“A big group of people that have a lot of experience and have seen a lot and [carry] a lot of wisdom will exit our labour market,” says Rafael Gomez, a professor and director of the University of Toronto’s Centre for Industrial Relations and Human Resources who has researched aging demographics in the working population extensively.
Presently, one-third of workers in Canada are millennials, with Gen Xers close behind at 29.5 per cent, and the younger Gen Z ringing in at 17.6 per cent. However, Gen Xers have been routinely passed over when it comes to promotions – meaning their experience levels may not completely fill the void left by retiring boomers. They’re also vastly outnumbered by younger generations.
This, says Mr. Gomez, may cause the labour market to lose its delicate balance – with some industries facing more dramatic upheavals than others. At last count, there were around 700,000 unfilled jobs in the country, most notably in food services, health care, social services and construction.
Mary Van Buren, president of the Canadian Construction Association (CCA), says the construction industry alone currently has about 61,000 vacancies.
“We expect about 245,000 retirements by 2032 and around 240,000 people to replace those,” says Ms. Van Buren. With a shortfall of 5,000 from retirements and the current 61,000 vacancies, she estimates the industry has about 66,000 roles to fill in the immediate future. “We have a huge recruitment job to do.”
It’s the same across the skilled trades. With around 700,000 skilled trades workers expected to retire by 2028, the Canadian Apprenticeship Forum estimates an average of 75,000 new apprentices will need to be hired per year over the next five years to meet the demand for skilled journeypersons in Red Seal trades. The trades most at risk of not meeting that demand include welder, industrial mechanic, bricklayer, boilermaker, cook and hairstylist.
Ms. Van Buren says one of the challenges of filling these roles is the perception of skilled trades. “Most of us went through school and were told that university is the desirable career path,” she says. “A lot of shop classes were eliminated in high schools and with the Federal government immigration pointing system, higher education equals higher points.”
Ms. Van Buren says there’s a serious concern about filling these roles at a critical time for growth in infrastructure across Canada. But it’s not just the ability of organizations to hire the talent they need. The boomer exodus is also creating an imbalance between experience and technical innovation.
Mr. Gomez says younger generations tend to come in with a better grasp on emerging technologies and ideas on moving organizations into the future, while older generations have insight and institutional memory that can better predict the failure of an idea. Both are necessary, says Mr. Gomez – but, as his research shows, they need to be balanced.
“You don’t want tons of people who are just in those positions saying no to every new idea because occasionally those ideas are different,” says Mr. Gomez. “On the flip side, an economy or an organization that doesn’t have enough gatekeepers might just spit out ideas that can cause an organization to fail.”
In the case of baby boomers retiring, Mr. Gomez says it’s going to affect organizations disproportionately.
Larger and more established companies will likely feel the demographic crunch more sharply. These types of companies tend to require more senior leadership roles and managers and often have to invest a lot more in training staff. “Older workers tend to be found in careers that have longer career paths – public service, education, health and large corporations like banks and telecom,” says Mr. Gomez.
Newer companies and startups will be less affected, says Mr. Gomez, because they tend to hire younger and newer entrants into the work force who already have a better understanding of technology.
With growing job vacancies in former boomer strongholds, holding up the labour market – and legacy companies – will fall on Gen Xers and elder millennials. To head off looming disruptions, now is the time for those workers to get upskilling, retraining and advancement.
“Maybe at the very end of their careers, they can assume some of these roles that were denied them just by the sheer numbers and the demographic weight of that baby boom generation,” he says. “[They could] fill that gap of experience that’s needed to still manage corporations, especially larger organizations.”
Editor’s note: An earlier version of this article erroneously cited '245,000 retirements by 2023'. The correct information is '245,000 retirements by 2032.'