We all know Canada’s population is aging. But how will changing demographics affect your business?
First, the good News. Aging consumers have different buying habits, so that means opportunities if you’re creative. The bad News is that as baby boomers retire, many businesses will face labour shortages because not enough younger workers will be around to take their place.
Either way, businesses that don’t adapt to the reality of the aging population could face severe challenges and are going to miss opportunities, says Pierre Cléroux, Chief Economist at the Business Development Bank of Canada (BDC).
The impacts are already being felt in some sectors and regions where businesses are struggling to find younger employees to replace retiring boomers. “If we don’t manage our labour force according to the new trends, it’s going to be difficult for businesses to be successful,” Cléroux says.
Retain older employees
In the next 20 years, the median age of Canadians is expected to rise to 45, up from 26 in 1991, Statistics Canada projects. Twenty years ago, nearly two people entered the labour force for every person nearing retirement. Today, the ratio is one to one, and it is expected to drop further.
“Every sector of the economy is going to be impacted,” Cléroux says. To deal with the coming labour crunch, you can start by creating more accommodating workplaces to entice aging employees to put off retirement, he suggests. Older workers often can’t or don’t want to work full-time. Flexible hours, part-time jobs and temporary work are ways to keep them on board.
“Older workers usually have a great work ethic and experience,” Cléroux says. “Businesses will need to keep their people working for them longer. The perception is that at 65 people are done. That perception will have to change.”
Another solution is immigration, which has always been important in addressing labour shortages in Canada, Cléroux says. That role will grow: 20 years from now, 32 per cent of the labour force will have been born outside Canada, versus 21% today.
Cléroux says “Businesses will have to be more flexible in accepting people trained, educated and born outside Canada.”
