Future of work

Key takeaways

• Over the past 20 years, the workforce has aged. The share of firms with an average worker age over 40 grew from 26.2% to 42.3%, and the share of  workers aged 55 and over doubled from 9.3% to 18.8%.
• Firm-level data show the manufacturing sector reporting the biggest shift in workforce aging, with the share of firms reporting an average worker age over 40 rising from 28.5% in 2001 to 59.1% in 2022. The construction sector had the smallest shift, rising from 25.6% to 38.5%.
• Regionally, firms in the Atlantic provinces faced the biggest shifts in workforce age, while British Columbia firms saw the smallest changes. 
• Small firms—those with 4 to 99 employees—typically lean a bit older than large and medium firms (those with 100 or more employees). However, over the two-decade period, the share of medium and large firms with an average worker age over 40 increased more sharply, bringing these businesses closer to small firms by 2022.

Plain language summary

The Canadian population has been aging over the last two decades—and with an aging population comes an aging workforce. This has been an ongoing topic of research. The study provides a deeper look at the topic by using firm-level data to understand how workforce aging has changed over time and varies across firms.

The study uses two indicators, both based on firm-level data. The first is the average age of workers (generally discussed as the share of firms with an average worker age over 40). The second is the share of workers aged 55 and over. The study looks at trends from 2001 to 2022 to understand how the workforce has aged over the last two decades. To get deeper insights, it also looks at firm-level trends by sector, region, and firm size.

From 2001 to 2022, the share of firms reporting an average worker age over 40 increased by just over 16 percentage points, reaching 42.3% of all firms in 2022. This means that by 2022, four in 10 firms had workforces with an average age over 40. The share of workers aged 55 and over doubled during this time, from just under 10% in 2001 to almost 20% by 2022.

The study found a higher share of firms with an average worker age over 40 in all sectors in 2022 compared to 2001; however, the level of aging varied. The manufacturing sector had the largest shift in firms reporting an average worker age over 40, going from approximately 30% of firms in 2001 to almost 60% by 2022. The construction sector had the smallest change, with the share of firms with an average worker age over 40 rising from approximately 25% of firms in 2001 to almost 40% by 2022.

Like the sector analysis, the study found that the share of firms with an average worker age over 40 increased in all jurisdictions. Atlantic Canada experienced the largest shift, with the share of firms with an average worker age over 40 going from around 30% of firms in 2001 to 50% in 2022. British Columbia had the smallest change, from around 30% in 2001 to 40% in 2022.

Finally, the study looked at how the aging workforce varied by firm size, comparing small firms (those with 4 to 99 employees) to medium and large firms (those with 100 or more employees). In both 2001 and 2022, a larger share of small firms reported that the average worker age was over 40. However, medium and large firms saw a greater shift, bringing the share of firms with an average worker age over 40 closer to that of small firms by 2022.

In 2022, medium and large firms were more likely than small firms to have an average worker age of 36 to 45 years: 60% of medium and large firms fell within this range, compared to 41% of small firms.

Definitions

Average worker age: The average age of all workers at a firm.

Why the results matter

For most Canadians & employers

Demographic changes have reshaped workforces in Canada. Understanding which parts of the labour market rely most on older workers can help employers anticipate workforce needs. 

For policymakers and planners

These readers can benefit from a deeper understanding of how population aging has affected the workforce at the firm level and which parts of the labour market may face future workforce-planning challenges as older workers retire.