February 20, 2023

“Greyer” workforce retirements rise, creating skills gap: TD

If you think you’ve noticed more grey heads around the office of late, you’re not wrong — but things may be about to change.

According to a new report by TD Economics, cited in an article in Wealth Professional, while more older workers than usual are currently employed, their pending mass retirement “is a risk to the economy if it is not addressed.”

James Orlando of TD tells Wealth Professional that the problem is that “many Canadians who would have been eying retirement have chosen (or perhaps been forced) to work longer than expected. But older workers will not stay in the labour market en masse for ever.”

It’s a bit of a good news, bad news situation, the magazine reports. Older workers who have delayed retirement have “provided an important buffer for those businesses that would otherwise be struggling to fill skills gaps,” the article points out.

In fact, the article continues, this “greying effect” on the workforce, where workers aged 55 and over stay in their jobs, has been happening since 2020.

Had older workers been retiring at the same rate they did 20 years ago, Wealth Professional reports, there would be an eye-popping one million fewer older people in today’s workforce.

It’s felt, the article tells us, that “lower asset values and rising housing and energy costs” are reasons the older gang is still at their desks — concerns about inadequate “pension pots” is another, the article adds.

Now for the bad news.

Figures show a “17 per cent increase in the number of retirements in 2022 compared to the prior two years, with 266,000 people retiring through the end of last year,” the article reports.

This trend, the article continues, is expected to continue “and with a projected one million over-65s by 2025, this could mean 900,000 retiring based on current participation rates.”

Put another way, that’s a 50 per cent jump in the retirement rate.

Orlando tells Wealth Professional that “businesses cannot ignore the likelihood of losing both the headcount and the knowledge that is in those heads.” He states that there is a need to address the skills gap through greater training of young people and through finding room for people with “foreign credentials and experience.”

“The aging of Canada’s existing population is opening the door to make the structural changes necessary to bring in, integrate, and support all current and future Canadians. Therein lies a huge opportunity for Canada,” Orlando tells Wealth Professional.

We’ve seen similar stories that talk about mass retirements in certain key sectors, such as healthcare and in skilled trades. If there is a positive side to this story, it’s that a once-in-a-generation time of opportunity is presenting itself to younger workers willing to up their skill sets.

Changing jobs often means changes to your workplace pension and benefits. But a job change is no biggie if you’re a member of the Saskatchewan Pension Plan (SPP). Because your SPP isn’t tied to your employer but to you, you can continue contributing at your new job, even if it’s in a different province or territory. This level of portability makes SPP a pension benefit that travels well!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

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