Many Canadians delayed retirement and stayed in jobs during the pandemic when they may otherwise have quit. Now, with the virus in retreat, retirements and quitting are expected to increase, exacerbating labour shortages, says RBC Economics in a new report.
According to the report, retirements fell by 20% during the pandemic and the number of people who quit jobs due to dissatisfaction dropped by around 40%, as people chose to ride out the uncertainty.
Now, however, these trends are expected to return to more normal levels.
RBC said it expects retirements that were delayed by the pandemic to rise in the second half of 2021, with about 125,000 workers expected to retire, which is back in line with long-term trends.
“A surge in retirements will worsen Canada’s already declining labour force participation rate,” it said, noting that the rate remains at levels not seen since the mid-1990s.
Additionally, unhappy workers are increasingly leaving their jobs. “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,” the report said.
This increase in employee turnover, combined with rising demand for workers in sectors battered by the pandemic, is expected to intensify post-pandemic labour shortages through the summer and into the fall, “particularly among skilled workers,” RBC said.
Rising shortages may bolster workers’ bargaining power for higher wages and improved working conditions, the report noted.
At the same time, the need to tap new and under-utilized sources of labour growth will intensify, RBC said. Potential sources of new or better-employed workers include immigrants, women and visible minorities, the report said.
“However, these will not provide much relief in the short-run,” it said. “Ensuring women and visible minorities can participate at their potential will require new strategies and more time.”