In Part One of this series, we discussed the Baby Boomer generation, and the impact it will have when they retire. They make up 25% of the workforce and inhabit 40% of the $60,000 and above annual income bracket. The effect will be profound.
What does it mean for Workers?
Some industries have a high concentration of workers over age 55, including Wholesale and Retail Trade (20.08%), Transportation and Warehousing (25.75%) and Agriculture (38.93%). Others have minimal representation from workers under 25, like Educational Services (7.8%), Professional Scientific and Technical Services (6.67%), and Public Administration (4.81%). For workers in these industries:
- Coveted leadership positions will become available.
- People already working in industry will deal with greater responsibility.
- Entry level opportunities will become available in previously saturated fields.
For people working in precarious positions, opportunities in new and chosen fields of work will become available. Individuals looking for new careers will be more likely to find a suitable match within areas that were previously highly competitive.
What does it mean for Employers?
Employers will have the arguably largest challenge in dealing with our evolving workforce. Though leadership positions can be filled with internal hiring, the skills vacuum the Boomers will leave behind will prove the highest challenge. Many companies will have to invest more in staff training and education; where others have already started automating many of their processes. Retaining talent will become less about compensation and more about culture, work/life balance and benefits packages. Outsourcing specialized tasks like recruiting, project management and HR administration will become more common as companies increase efficiency to become more competitive.
What does it mean for Government?
An aging population comes with its share of challenges for government, for example, increased health care and pension costs, smaller tax base, and more demand for affordable housing. Though these challenges are familiar to Canada and its provinces, the scale is a little daunting. Through the retirement of the previous two generations, Canada had the massive wealthy tax base of the Baby Boomers at its disposal to bolster infrastructure and programs directed at the elderly population. As the Baby Boomers are the wealthiest generation, when they retire, that tax revenue retires with them. While governments have been prepared for the pension crush, many provinces are struggling to replace the tax base as their largest demographic retires.
Coast to Coast:
- British Columbia has a large demographic of younger workers, but a growing over-50 demographic as Baby Boomers are retiring to its nicer climate.
- The prairie provinces are young, they have strong representation from millennials and stable birth rates.
- Ontario and Quebec, with Canada’s highest concentration of population, have an opportunity to attract more workers as coveted positions open up in previously stagnant job markets.
- The Maritime Provinces have the biggest challenge as their workforce has been consistently migrating to the Prairies for decades and many return only to retire.
Some provincial governments have moved to stem the outflow of income by bolstering their precarious job markets with higher minimum wage while others have moved to make education more accessible to more vulnerable populations.
What do we do now?
The survival of small and medium businesses in the post-boomer era will depend on many factors. Business owners will have to prepare for higher competition for staff, greater demands for benefits, higher wages and less access to skills. Workers in the new market will be drawn to positions with long-term viability, benefits packages that focus on the future, and work/life balance. Employers may also consider incentive options for younger workers like scholarships, paid education or skills development training.
There are no absolutes when it comes to a business’ future, but a little knowledge and foresight can go a long way. Will your company be affected by the Baby Boomer retirement? If so, how has your company started preparing? Let us know in the comment section.