Canada’s biggest challenge is not scarcity of skilled workers but the increased number of people rushing to retire. Amid high job vacancies, low unemployment, and less skilled workers, many Canadians are retiring in record-high numbers. 33% of recently retired Canadians admitted that they retired earlier than the planned date.
Canada witnessed tremendous labor growth in August, but despite the development, the number was still lower than in previous months as many people stopped working.
It is a shocking surprise that not just 65 and above are transitioning into retirement. But people aged 55 and 64 also plan to retire or have already retired in the last year.
The situation is alarming for Canadian businesses struggling to hire skilled workers across several job positions. If the problem remains consistent, it would be tough for Canada’s economy to push the envelope higher and strengthen the dropping economic productivity.
Canadians are retiring in large numbers.
Canadian economists had long predicted this wave and that the country would deal with the ‘Great Retirement’ phase sooner or later. It will only intensify in the coming years if the government fails to take the necessary steps.
The speed with which Canadians are retiring poses a severe threat to some sectors as people are leaving without being replaced by younger workers. It is absolutely a significant loss of human capital and knowledge.
The pandemic halted the retirement plans of so many Canadians as they decided to dedicate some more time to their jobs. With restrictions now lifted and people having come out of their houses, many are rushing to retire to enjoy travel and spend quality time with their family and loved ones.
The great retirement negatively impacts the labor force, significantly affecting the country’s economic growth when banks increase interest rates to counter inflation.
Compared to other G7 nations, Canada has a larger share of the working population (64.8%) aged 15 to 64. Japan has less than 60%, whereas the U.S. shares more or less the same numbers as Canada.
Despite having the largest working-age population, Canada’s labor force has never been so older. Presently, one in five workers in Canada is 55 years or above.
According to a report by Statistics Canada, around 307 000 Canadians retired from their jobs in August 2021. Up to 31.8% migrated in 2020, 12.5% higher than in August 2019.
The report further revealed that more than 620 000 Canadians turned over 65 years during the Covid-19 pandemic. Despite constant job losses for three months, job vacancies and postings remain the same as in pre-pandemic years.
Canada needs more workers across several domains.
The issue of retirement is severe in some particular sectors, such as trade and nursing. Canada continues to lose more and more jobs (34, 400) in the health care sector. Many nurses have reported working overtime to compensate for the low availability of staff nurses.
There are no job losses, but people are rushing to retire in Canada. It is a significant issue in the country because so many people are choosing to retire in random numbers.
Moreover, there is a considerable demand for skilled drives in trucking companies. More and more drivers are ageing, therefore, retiring to have free time. Trucking companies are compelled to pick candidates for on-the-job training courses and hire them as soon as they get their licenses.
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