‘We expect this increase in voluntary job turnover to exacerbate post-pandemic labour shortages’
Retirement and resignations may have dropped over the pandemic, but both are beginning to climb back to pre-crisis levels, according to a report from RBC.
Retirement numbers stood at 21,270 from March 2019 to February 2020 and then dropped to 17,180 from March 2020 to February 2021. From March 2021 to June 2021, this number grew to 19,450.
Meanwhile, resignations due to job dissatisfaction were at 15,320 from March 2019 to February 2020. They dropped to 9,220 between March 2020 and February 2021 and then jumped to 13,100 between March 2021 to June 2021.
“People are once again willing to quit if unsatisfied with their current positions — among the clearest signs that confidence in the labour market recovery is firming. Indeed, the number of recently non-employed people who left their positions due to dissatisfaction lifted significantly in June,” says Andrew Agopsowicz, senior economist at RBC.
“Retirements have also started to tick higher already, and we expect a return to long-term trends to be continued into the second half of the year, driven by the large cohort of aging baby boomers.”
More than one in five (21 per cent) of Canadian workers plan to look for a new role in the next several months, according to another report.
Labour force participation
Last month, there were 16,700 recently non-employed people who left their positions due to dissatisfaction, nearly triple the number from June 2020. Also, there are 125,000 expected retirements in the second half of 2021, says the report.
As of January 2021, Canada’s labour force participation stood at 65.2 per cent, hovering near lows not since the mid-1990s, excluding pandemic lows last spring. Meanwhile, there were 550,000 job vacancies in the first quarter of the year.
“A surge in retirements will worsen Canada’s already declining labour force participation rate — which has bounced back from pandemic declines but is still at a level not seen since the mid-90s. Coupled with a rise in demand where job vacancies are back at pre-crisis levels, we expect this increase in voluntary job turnover to exacerbate post-pandemic labour shortages,” says Agopsowicz.
Addressing the shortage
What can employers do to address the growing labour shortage? Turn to new and under-utilized sources of labour force growth, including immigration, women, and visible minorities, according to the report Will a Return to Pre-pandemic Retirement and Job Quitting Levels Worsen Emerging Labour Shortages in Canada?
“However, these will not provide much relief in the short run. While the government has lifted the number of new permanent residents to pre-pandemic levels, most of this only reflects a change of status from temporary to permanent,” says Agopsowicz.
“It won’t increase the population overall. Still, with the border now open to more immigrants, we can expect the flow of newcomers to reduce the pressure on labour markets. Ensuring women and visible minorities can participate at their potential will require new strategies and more time.”
Just recently, the federal government amended the Public Service Employment Act to address systemic barriers for equity-seeking groups.