Your most experienced employee and your most loyal customer could retire in the same month. One takes knowledge out of your business. The other starts spending differently. Where does that leave your five-year growth plan?
The Great Resignation gave American employers a painful encounter with the first half of that question. As businesses reopened after COVID restrictions, employees reconsidered where they wanted to work. Alongside that movement between employers, others retired. Someone still had to serve the customer, repair the equipment, or train the new hire.
By July 2022, the United States had nearly two job openings for every unemployed person: 11.2 million openings against 5.7 million unemployed people, according to releases published at the time. Employers were competing for people who had alternatives. Offering what everyone else offered gave those people little reason to choose one company over another. Source: BLS job openings, BLS unemployment.
Canada’s demographic shift brings both halves of the opening question into the boardroom. Population aging and reduced immigration affect the workers available to businesses and the customers those businesses serve. The Bank of Canada identifies consequences for productive capacity, housing needs, and spending on services. The American experience offers a warning about workforce assumptions, although its 2022 labour market is not a forecast for Canada. Source: Bank of Canada
Consider a home renovation company. Older homeowners might create demand for accessible bathrooms and easier-to-maintain properties just as experienced tradespeople prepare to retire. The opportunity and the constraint arrive together. A growth forecast that considers only customer demand misses half the business model.
Canadian leaders need to understand the people behind their forecasts, then offer something those people meaningfully value. Three actions follow:
- Understand demographic changes within your customers, workforce, and local markets.
- Differentiate the employee offer around demonstrated needs.
- Connect retention and changing demand to investment decisions.
1. Understand who is changing and what that changes
An average age tells you surprisingly little about where a business could break. Two departments can have the same average while one contains employees clustered near retirement and the other combines recent graduates with experienced specialists. Their succession needs will differ substantially.
Start with roles and capabilities. Where does knowledge sit with one or two people? How long does a replacement need to become proficient? Which locations struggle to recruit? Combine workforce demographics with tenure, turnover, working arrangements, and voluntary career discussions. Age can help identify questions to investigate; it cannot tell you when an individual intends to leave.
Nursing illustrates why the diagnosis matters. Retirement attracts attention, but employees can leave decades before retirement age. In the Canadian Federation of Nurses Unions’ 2023 survey, 34% of early-career nurse respondents indicated an intention to leave the profession. That is a measure of intention rather than observed departures, but it challenges any workforce plan that treats recruiting younger people as sufficient protection. Source: CFNU survey
A newly qualified nurse who needs reliable supervision and a veteran nurse considering fewer shifts present different retention challenges. A single incentive may miss both. The same principle applies to engineers, technicians, salespeople, and managers.
Apply comparable discipline to customers. Examine household composition, income, location, and purchasing behaviour alongside age. An older homeowner may want help maintaining a property rather than help selling it. An adult child may influence the purchase without using the service. Interviews and transaction data can establish which needs actually drive decisions.
Within 90 days, leadership teams should be able to identify their most consequential demographic exposures and the assumptions that require testing. The result should change a staffing decision, a customer offering, or an investment proposal.
2. Give employees a meaningful reason to choose you
Ask your leadership team one question: What is unique, different and meaningful about your employee value proposition?
Unless the answer includes something specific that employees value, you have a problem. “Competitive pay,” “comprehensive benefits,” and “career opportunities” could appear in almost any employer’s recruitment materials. When employees see little difference between what they receive today and what they could receive elsewhere, matching the market gives them little reason to stay. As demographic pressures intensify competition for critical skills, that sameness could become increasingly expensive.
If your logo disappeared from your benefits brochure, would employees know which company it belonged to?
The starting point is to understand employees’ frustrations. What causes stress in their lives? What keeps them awake at night? The answers may have little to do with the benefits employers traditionally benchmark. They may involve a child’s education, an aging parent’s health, or uncertainty about whether the next outsourcing announcement will eliminate their job.
At one quick-service restaurant business I worked with, the company offered scholarships to employees’ children. The benefit addressed a family aspiration that an ordinary rewards package could easily overlook. A hospital offered employees’ parents access to specialists and saw turnover fall by half. The offer addressed a concern employees carried into work even though its source lay outside the hospital.
At a manufacturer, outsourcing janitorial services created anxiety well beyond the employees directly affected. Other employees feared their function would be next. The company responded with a job guarantee for employees who maintained a good performance rating. Employee engagement rose 20 percentage points in the next survey. The response addressed the uncertainty employees were actually experiencing.
These examples offer a method, rather than a benefits menu to copy. Identify an unmet need, brainstorm potential responses, and ideally test which options employees value most. Assess their cost and fit with the broader people strategy. A distinctive promise also needs operational credibility: the organization must be able to deliver it consistently.
This is familiar territory for marketers. They investigate customer frustrations, design an offer around an unmet need, and give customers a reason to choose them. Employers can apply the same discipline to their workforce. The strongest offers address something employees care deeply about in a way competitors would struggle to reproduce.
The test is whether an employee can explain, in their own words, what they would lose by leaving.
3. Invest in the capacity to serve tomorrow’s customers
A business can find its next growth market and still lack the people to serve it. Finance, operations, marketing, and human resources therefore need to evaluate demographic change together.
Return to the home renovation example. A company might test a service for older homeowners while building an apprenticeship programme and offering experienced tradespeople paid coaching roles. Customer development and workforce development reinforce each other. Approving the sales opportunity without funding delivery capability would leave the plan incomplete.
Near-term priorities should focus on preventable losses and specific constraints. Investigate why valued employees leave, where poor supervision makes work harder, and which tasks consume time without improving service. Repeated data entry, inefficient scheduling, and unnecessary approvals are candidates for redesign. Technology earns its place when it solves an identified problem and improves measurable results.
Over five to ten years, demographic evidence should influence location choices, training capacity, service design, and major capital commitments. Test investments against different combinations of customer demand and labour availability. A market can grow while the cost of serving it rises faster than revenue.
Boards should expect measures that reveal those tensions. Total headcount can conceal the loss of scarce expertise. An overall turnover rate can conceal a problem among employees in their first two years. Revenue growth can conceal increasing dependence on overtime or contractors. Useful measures connect employee stability and capability to the service customers receive.
Make the choice to stay worth making
The Great Resignation showed how quickly employers could lose confidence in assumptions they had treated as routine. Canada’s demographic transition gives leaders another reason to examine those assumptions before vacancies, service failures, or changing customer behaviour expose them.
At the next strategy meeting, ask two questions: Which people does this growth plan depend on? What meaningful reason have we given them to keep choosing us?
The answer should describe something customers and employees experience. If it exists only in the brochure, it will not protect the plan.