What people-oriented dynamics are reshaping the talent landscape?
The workforce is shrinking. We’ve seen the working-age population trend downwards from 66.64% to 64.77% of the population over the last 15 years or so. What’s more, this tighter workforce is continuing to shrink. The portion of the population under age 18 has dropped from 25% to 17% globally since the early 1980s. Meanwhile, the population over age 60 is set to increase from 1 billion in 2020 to 1.4 billion in 2030 — and we are losing workers accordingly.
The people who make up this smaller workforce are also evolving. Six generations, from the Silent Generation to Generation Alpha, are operating in the workforce all at once. With Canada welcoming almost 500,000 new immigrants every year, our domestic workforce is now much more diverse and multicultural than ever.
Gender is also a factor. In 2020, 14% of Canadian companies had five or more female executives. That number grew to 25% by 2023.
This diversity brings upsides. We know that diverse teams, perspectives and ideas generally give way to stronger innovation, solutions and progress. At the same time, a workforce like this is creating a greater challenge for organizations by involving a more complex and a wider range of employee expectations. You need to provide an employee value proposition and employee experience that will resonate across many different groups and create inclusive work environments that are more adaptable to varying needs and paradigms. See further insights from EY people and workforce leaders here.
All of this is compounded by the fact that the smaller and more complex workforce is also becoming outdated. Technology is evolving at a remarkable clip, creating structural unemployment. As technology adoption and automation ramp up, we expect 50% of employees will need reskilling by 2025.
Looking further ahead, 1.1 billion jobs will likely be transformed by technology in the next 10 years. By 2040, more than 85 million jobs could go unfilled because there simply aren’t enough people with the right skills.
Now is the time to address these widening gaps and potential mismatches between qualified and available talent. However, you need to balance short-term, macroeconomic forces that are straining the market — historic inflation, high interest rates and cost management pressures — with the longer-term need to staff the business with a steady pipeline of ready and reliable people. This represents a perplexing proposition for any organization to consider.