by: Anin Setyo
Over the past 20 years, industry leaders have discussed how the pending retirement of baby boomers will impact businesses. While some companies are preparing for this major shift in the workplace, when the biggest number of senior skilled workers and management are replaced by the next generation, we can expect a significant gap in skills and experience to occur . This gap may best be filled by companies who are proactive in attracting, hiring and retaining skilled professionals from outside Canada.
Today, baby boomers are 57 to 75 years old. This means the youngest boomer is likely to retire in 6 to 10 years. While many non-boomer professionals enter and exit the workforce every day, the focus around this generation is not without merit. Firstly, they have always had an outsized presence relative to other generations. In Canada, they claimed the largest living adult generation until 2014, only to be replaced by Millennials in 2015. As such, when taking into consideration the “natural” retirement of a worker due to age, from today until 2031, the workforce will experience an exodus of workers of a magnitude that may only be topped by the next exodus of the Millennial generation in 25+ years. Secondly, the retiring boomers tend to be those who have accumulated many years of experience in their particular professions, and a loss of such skill level may not be easily replaced.
Since 2006, the size of Canada’s labour force has been growing annually, including when the stock market crashed in 2008. But when COVID-19 hit, Canada experienced a sudden shrinkage in the size of its labour force (1.3% in 2020). While some workers exited the labour force due to business closures, childcare needs or a change in lifestyle, the pandemic may also be the catalyst many boomers needed to leave the labour force permanently and enjoy their retirement. This may lead to our domestic labour force shrinking faster than it otherwise should.
Fortunately, Canada is a niche nation when it comes to its strategy for maintaining its labour force. Globally, it placed 5th in 2015 for the number of immigrants it admitted compared to its population. Given its declining fertility rate (1.5 child per woman, or -0.53% growth rate in 2020), its reliance on immigration as a source of labour supply is key to economic growth. Immigrants consisted of 24% of the entire nation’s labour force in 2016, before it increased to 28.1% in 2020. This increase is expected to continue given Canada’s low birth rate. Since its founding in 1867, Canada has welcomed at least 300,000 immigrants in a year just five times. And yet, starting from 2021, the country is set to welcome more than 400,000 immigrants every year until 2023. What does this mean to Canadian companies?
We predict an increasing number of Canadian companies having to rely on new immigrants or foreign workers for many skilled positions (engineers, trade workers, cooks, etc.) and/or semi/entry-level skilled positions (labour and hospitality workers, truck drivers, janitorial positions). We also predict a higher comfort level among employers to take a proactive approach by recruiting internationally instead of the general practice today, where most companies focus on workers who are already in Canada. This is because companies will realize that those with access to a bigger international talent pool will be less impacted by local labour shortage.
This change will require more dynamic HR strategies to ease the hiring process for foreign workers. These may include the addition of travel or immigration costs as a part of the recruitment budget, assistance with transfer of foreign credentials to gain local licensing and utilization of international recruitment companies. Naturally, companies will also have to educate themselves more on immigration policies by either having outside counsel or an in-house immigration expert. While companies may experience a bigger cost in the beginning, they should see the return on their investment quickly. An article by McKinsey & Company notes that one individual performing in the top 1 percent equates to 12 performing in the bottom 1 percent. Having a strong HR pipeline will allow companies to have a sustainable labour pool to support their business, while being adaptable will allow companies to remain competitive.
Although immigration can be a labyrinth of various programs and constant changes, with the right help, it should be a fruitful undertaking. You will have a knowledgeable person informing you and your workers of the best or the most straight-forward stream to apply under, minimizing time and cost, explaining the requirements of the program, taking care of the submission and troubleshooting issues along the way.
If you would like to know more about how to bring in a foreign worker to your company, or looking for immigration advice on your current HR strategy, please reach out to one of our team members at email@example.com. You can also reach out to us over the phone at 604-873-8723.