The march of the aging workforce
The share of older workers in Canadian firms doubled over the past two decades, with manufacturing showing the steepest shift of any industry
IT’S A MIDDLE-AGERS’ economy now. That may not come as news to Gen Z or millennials, but a new study from Statistics Canada put actual numbers to the sentiment, finding that over the last two decades, in addition to the broader aging of the population, the average age of employees at the firm level has also increased, with more than four in ten (42.3 per cent) companies now having an average age over 40 years old.
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“The proportion of firms with an average worker age over 40 increased by more than 16 percentage points [since 2001], and the share of workers aged 55 and older doubled, on average,” the study reads. It notes this aging has been particularly sharp in the manufacturing sector (something that echoes concerns held by the Canadian Manufacturers and Exporters lobby group), which experienced the most pronounced change, with nearly 60 per cent of manufacturing firms now having an average age over 40.
While we’ve known intuitively that the Canadian population, and thus the workforce, is aging, the authors note that what this new survey found was the average age of companies is increasing as well, and suggests this will inevitably have qualitative effects, both now — as companies continue working with older employees — and in the future, as experience and skills fail to trickle down through the broader working population.
“Policy changes have played a role, including the elimination of mandatory retirement in several provinces during the mid to late 2000s, and the introduction of income tax incentives designed to encourage older workers to remain in the labour market” —Louise Smith
“In general, workforce aging is associated with reduced productivity,” the authors write. “While older workers bring valuable experience that can enhance their labour productivity, they often have less familiarity with new technologies, which is essential for improving productivity.”
The survey notes that we should treat these findings like an outcome of years in which the goal was to keep people in the workforce. “Policy changes have played a role,” wrote Louise Smith for Human Resources Director, “including the elimination of mandatory retirement in several provinces during the mid to late 2000s, and the introduction of income tax incentives designed to encourage older workers to remain in the labour market.”
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The big takeaway? For some analysts it suggests that Canada may be increasingly becoming a “wisdom economy,” where long-range skills and knowledge become the key asset that workers bring to companies.
“It’s less about being an expert in a product or a process or a system, and it’s more about moving into, ‘Do you know what your requirements are in your complex environment? Do you know why things matter? Do you how to allocate resources?’” said University of Guelph professor Nita Chhinzer, speaking to Global News. “Wisdom is this amalgamation of skills or competencies around knowing what matters and knowing how to get things done.”