Employees choosing to retire or quit could rise in the second half of 2021 alongside the coronavirus pandemic receding, according to a report by the Royal Bank of Canada.
The number of retirements in Canada fell about 20 per cent last year compared with the 12 months that ended February 2020, says Andrew Agopsowicz, a senior economist with RBC. “The dip was likely a result of uncertainty about retirement savings as the pandemic arrived. It’s what’s held a lot of people back.”
But Agopsowicz says recent data suggests the level of Canadian retirements began to return to normal during the second quarter of 2021 as the economy took steps toward reopening. “The return to normal could be a good period for people to make a decision they probably were going to be making [anyway].”
Retirement levels have been high for about 10 years, as the large baby boomer generation reaches the age of 65, and that trend will continue for several years, he notes. There also may be a near-term labour shortage for some types of jobs because of a combination of the higher retirement levels, Canada’s low birth rate and fewer new immigrants during the pandemic. “I think all of these come together and are going to start adding a lot of pressure to labour markets as we head into the fall.”
And though the number of people quitting jobs due to dissatisfaction dropped 40 per cent between March 2019 to February 2020, the report found people are once again willing to quit if unsatisfied with their current positions — a sign that confidence in the labour market recovery is firming. Indeed, the number of recently non-employed people who left their positions due to dissatisfaction rose significantly in June. The rise in job turnover may indicate other emerging factors, said the report, including an unwillingness to return to the office. Notably, more than half (57 per cent) of employers surveyed that currently operate remotely are planning to shift back to the office.
While Agopsowicz says a recent business survey published by the Bank of Canada said there was still some slack in the overall job market, employers are having difficulty hiring certain types of workers with specialized skills. And the rise in demand for labour may mean workers could enjoy a greater ability to bargain for higher wages or more flexible working conditions, noted the report. As employee shortages grow, so will the urgency for new and under-utilized sources of labour force growth, including immigration, women and visible minorities, the report added.