Aging and skill shortages an overblown threat?

Aging workforce is not the only, nor the most significant, determinant of skill shortages: report

Despite dire predictions from some corners, there is no evidence Canada is facing a looming shortage of skilled workers as a result of the aging population, according to a new report from Canada Policy Research Networks .

The report, Labour Force Ageing and Skill Shortages in Canada and Ontario, was written by Julie Ann McMullin and Martin Cooke of the Department of Sociology and the Workforce Aging in the New Economy Project at the University of Western Ontario in London, Ont., with the collaboration of Rob Downie, a research assistant at the university.

The authors review the demographic data, examine the age structures and retirement ages of different industries and occupations, isolate the relationship between skills shortages and labour force aging and assess the impact of workforce aging relative to a number of other factors that affect skill shortages.

The report focuses on four sectors in Ontario — nursing, information technology, skilled trades in manufacturing and the biotechnology sector.

“We conclude that workforce aging is not the only, nor necessarily the most significant determinant of skill shortages,” said McMullin.

Four key factors

The report outlined four key factors that affect skill shortages:

•the age structure of the current workforce;
•the time required for training;
•the geographic mobility of workers; and
•working conditions that affect attracting and retaining workers.

“While these factors may combine to create certain skill shortage hot spots in particular industries or occupations, talk of a general skill skills’ crisis sparked by an aging workforce is inappropriate,” said McMullin. “Wage levels, working conditions and education and training policies may be just as influential.”

For example, nursing occupations do not exhibit the oldest workforces but are among the most likely to experience very high cumulative retirement rates in the next decade. Other occupations may have older profiles, but have a higher average retirement age.

“Labour market policies addressing skill shortages need to look beyond the fact of an aging workforce to consider industry and occupation-specific issues and the whole complex of factors involved,” she said.

The report suggests several policy options to increase the ability of labour markets to meet the demand for skills, particularly in relation to labour force aging. Among them:

•immigration policies targetting skills in short supply;

•encouraging higher rates of labour market participation by under-represented groups such as Aboriginal people and single mothers;

•removing barriers to training and labour force participation, generally;

•promoting phased retirement and workplace flexibility to prolong participation of older workers;

•promoting lifelong learning and active aging, including training throughout working life and promotion and advancement for older workers; and

•encouraging employers to recruit an age-balanced workforce to achieve the optimal age structures for their enterprises.

Canada Policy Research Networks is an Ottawa-based not-for-profit research institute.

The free report is available online at

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