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There is an exodus within Canada's public service, with more than a quarter of civil servants retiring or preparing to leave jobs within the next few years. But what's causing grief for government managers is creating big opportunity for entrepreneurs.

From temporary employment firms to retirees-turned-consultants, entrepreneurs are capitalizing on the demographic shift, says Corinne Pohlmann, vice-president of national affairs for the Canadian Federation of Independent Business. The non-profit organization represents more than 105,000 owners of small and medium-sized businesses.

Since the start of the millennium, Statistics Canada reports the baby boom generation has increasingly been calling it quits. Among public servants, the rate of retirement is three times as high as it was 10 years ago. By 2013, one quarter of the sector's work force will be eligible to retire.

Still, a large number of those who make up Canada's 8.5 per cent unemployment rate can't easily replace retirees leaving senior positions, especially within the public sector, as many are young males who once worked in the manufacturing and construction sectors, says Pedro Antunes, director of national and provincial forecasting for the Conference Board of Canada. "It's going to be tough to replace the exiting baby boomer cohort," he says. "You can't fill the gaps."

As a result, executive training programs are becoming increasingly popular. For the past seven years, Action Canada, a private-public program based in Vancouver, has been providing national leadership courses to people in their 20s and 30s from a range of sectors, backgrounds and regions, says Cathy Beehan, the chief executive officer.

More than 100 of Action Canada's fellows have been given exposure to political and aboriginal leaders and trained in public speaking, writing about public policy and media management. A number have since moved into the upper ranks of the public service, while others have become entrepreneurs or moved into fields such as health care and academia.

"We're building leadership for Canada's future," Ms. Beehan says. "These are young people who are ready to take over, say, at the senior executive level of the government in three to four years."

Among small businesses looking to capitalize on the public service exodus, and federal government work in general, one challenge is the complexity of the procurement process, says Ms. Pohlmann. Contracts face increased scrutiny and projects are often bundled together to such a degree that they force out smaller companies.

Dealing with the government has also become more difficult, and wages for temporary work have fallen, meaning larger companies with high volumes are often the only ones able to compete, says Susanna Rodriguez, CEO of Access Corporate Technologies Inc., a staffing placement firm in Ottawa.

Shereen Benzvy Miller, director general of small and medium enterprises at Public Works and Government Services Canada, says her office - which opened five year ago - helps entrepreneurs work with the federal government through outreach activities and a mandate to bring down barriers.

Of the $15-billion in procurement by Public Works each year, she says, some $5.4-billion goes to small and medium enterprises. "That's a substantial chunk," she says. Small and medium businesses are "the engine of the economy, so we want to be as helpful as possible."

The agency offers free seminars, online information, networking opportunities and guides to help entrepreneurs learn about engaging the government, she says, to "demystify" applications and contracts. "No one's going to say it's not a complex process," she notes, "but it's not unmanageable."

The impending government labour shortage is a double-edged sword for small and medium businesses, Ms. Pohlmann says. Many face their own demographic-related succession and labour-shortage issues.

"We're facing this from all sides," she says, adding that a survey by the organization in 2006 found that as many as 60 per cent of small business owners planned to retire within a decade. Meanwhile, the majority of those starting their own businesses are 45 to 64 years old, she says. "The trend is only going to continue."

Fast facts

  • Just 10 per cent of 65-year-olds remain actively engaged in the labour force
  • The current growth rate in the labour force of 1.6 per cent to 1.8 per cent annually is expected to fall to 1 per cent in the next decade and then to .4 per cent to .6 per cent as the boomers age.
  • Federal public servants are on average 5.3 years older than workers in the general labour force, and they retire 3.2 years earlier, having banked more years of pensionable service than pre-boomers.

Sources: Conference Board of Canada, Statistics Canada

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