Traditionally, the age of 65 was the ‘golden age’ of retirement, but newer statistics illustrate a dramatic shift taking place. The Canadian workforce is aging, meaning more are continuing to work past the age of 65 than ever before. There has also been a steady population decline in younger generations, reducing the number of workers that can eventually take over these roles. An aging workforce has massive implications for Canadian businesses that employers need to consider and plan for.
Age demographic shifts in Canada
According to Statistics Canada, firms with the average worker over the age of 40 have grown from 26.2% in 2001 to 42.3% in 2022. Workers aged 55 and older have also doubled from 9.3% in 2001 to 18.8% in 2022. Aside from the workplace, the aging population in Canada has generally increased across all provinces, the current average age being 41.8 years old. In 2023, the number of Canadians aged 65+ exceeded those younger than 18 for the first time in history. But what factors are driving this change?
Access to Healthcare
Most notably, both the accessibility and advancements in healthcare have helped keep older Canadians physically and cognitively well. As life expectancy has continued to increase, so has the capability for older adults to stay in their careers.
Cultural and Socioeconomic Pressure
Economic strain such as the rising cost of living and the unstable housing market have pressured older Canadians to put retirement on hold. On top of this, Canada’s fertility rate has decreased to a record low from economic barriers, prioritization of career and personal growth, and family planning. The educational period has also lengthened, especially from the increasing demand in formal credentials for entry-level jobs, causing later entry into the labour market.
Urbanization
For some areas in Canada, the demographic change is even more dramatic. In Newfoundland and Labrador, over one in four people are aged 65 years or older. This is the first time such a statistic has been recorded. The same is true for rural areas across the country. Urbanization is to blame, an exodus of younger individuals choosing to migrate to urban cities. This leaves some parts of Canada with disproportionate numbers of older adults.
Technological Advancements
Finally, innovation in technology has reduced the need for manual labour as we continue towards digitalization. Some jobs that were once very physically demanding have changed to only require sound judgement and attention. Innovative technology has also contributed towards improved worker safety and reduced the risk of physical harm. Similarly, tools developed for accessibility and ergonomics have made it easier for older adults to work comfortably.
The impact of an aging workforce and considerations for employers
Researchers are arguing that this is a trend that will continue growing. While Canadian employers are legally obligated to follow human rights legislation that protects against age discrimination, some considerations can be made regarding an aging workforce.
Technology and process adoption
Older generations may be slower to adopt new processes and face challenges with emerging technology, which some argue can slow down innovation. Employers can mitigate these gaps in skill by using tailored training programs and deliberate onboarding when adopting new technologies. Employers can also create user-friendly SOPs (standard operating procedures) and offer shadowing opportunities to boost confidence. Mixed-demographic teams that include both senior and younger employees have also been shown to have diverse perspectives and are more adept at problem solving.
Concerns over labour shortages
One of the greatest risks to an aging workforce and lower birth rate is the potential for labour shortages. As Canadian workers get closer to retiring, the number of suitable replacements is declining. This is where proactive steps must be taken. Appropriate succession planning ensures that leadership remains consistent and reduces disruption upon retirement. Employers may also consider widening their candidate pool and investing in training programs for younger demographics.
Health and accommodations
Aging populations may be more susceptible to health-related concerns or require accommodation. Ergonomic adjustments, flexible working arrangements, and wellness programs help to keep up productivity and support employee wellbeing. As mentioned, technological innovations have also been a beneficial tool in granting accessibility for aging populations as well as those with disabilities.
Benefits of retaining experienced workers
Employers should consider that senior workers hold a valuable benefit in the workplace – experience. Older workers have built skills reflecting wisdom, such as sound judgement, problem solving, effective prioritization, and resiliency. Though knowledge is learned from formal education programs and becoming increasingly accessible online, wisdom is an irreplaceable trait earned over time. Tenured employees can transfer these skills by mentoring new workers, offer practical advice, and providing insights from their many years of experience. Amid a growing conversation on whether AI tools are leading to dependency and weakened critical thinking, these skills are more important to retain than ever.
Seasoned employees are also more likely to stay in the same position for longer periods of time as they seek stability rather than the growth-mindset of younger employees. Employers who invest in upskilling for experienced employees strengthen the loyalty of an intergenerational workplace, reducing turnover.
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