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Trouble hiring? 2 million additional workers could be employed by Canadian entrepreneurs

9-minute read

The current labour shortage isn’t new. Entrepreneurs have had a hard time hiring for awhile, and due to an aging population, the labour shortage problem will last well into the next decade.

Last month, BDC released the a study titled How to Adapt to the Labour Shortage Situation: Hiring Difficulties Are Not Going Away. We found that more than half (55%) of Canadian entrepreneurs struggle to hire the workers they need, leaving them working longer hours and delaying or refusing new orders.

While our study highlighted that technology and automation, as well as improving salaries and benefits are effective solution to help entrepreneurs hire employees, there is another solution we did not explore as deeply in our study.

Groups such as younger workers, older workers and immigrants could be better integrated and offered more opportunities.

Our research found large groups of Canadians who are currently underemployed. Groups such as younger workers, older workers and immigrants could be better integrated and offered more opportunities. Reaching out to these workers presents entrepreneurs with a great opportunity to rapidly hire new employees without having to resort to large investments.

Embracing Canadian diversity could add 2 million workers to the workforce

Our study found that the participation rate of 15- to 24-year-olds was nearly 20 percent lower than that of 25- to 65-year-olds. The unemployment rate of younger workers in June of 2021 was two times as high as that of the rest of the working age population.

Bridging the gap in employment rates between younger workers and the rest of the working age population could add close to a million workers to the economy.

Where are these potential 2 million extra workers coming from?


Younger workers


Older workers


Immigrant workers

Older workers are another group of employees who seem to be underemployed in Canada. The participation rate for workers aged 55 to 65 is more than 10 percent lower than in Japan —a global leader the inclusion of older workers in the workforce. The unemployment rate for older workers is also two and a half times higher in Canada than in Japan.

Having older workers participate in the Canadian economy at the same rate as those in Japan could add more than 750 000 workers to the Canadian economy.

The trend is largely similar, yet not a pronounced, for immigrant workers. Labour force participation is around 3 percent lower for the immigrant population than for the Canadian-born population. And the unemployment rate is about two percent higher for immigrants.

Bridging that gap could add close to 250 000 workers to the economy.

Differences in participation and unemployment rates for underutilized groups in Canada

Young people: Employ the next generation of workers

Over the next decade, workers aged 15 to 24 will form a growing portion of the working-age population.

However, young people face increasing difficulties transitioning from school to the workplace. When employers only look for employees with previous work experience, young people find themselves caught in the “experience trap.” Their biggest challenge is their lack of work-related skills, which paradoxically can only be acquired once they’re in the workplace.

Yet, hiring younger workers can be highly beneficial for employers.

  • Young people tend to be more educated than older employees.
  • Many young people are quick to understand and master new technologies.
  • Younger employees are generally quick learners and highly adaptable.
  • Young workers are good ambassadors for your business culture.

How to make your business attractive to younger employees

  • Offer them quality apprenticeships and internships

    Apprenticeships and internships serve as important pathways for attracting young talents and transitioning them smoothly from school to work. By teaching them the ropes and training them, you build the future generation of skilled workers by helping them become effective employees. You can also pair them with more experienced workers who can act as mentors.
  • Empower them once they’ve gained experience

    To retain your young talents, provide a stimulating work environment and opportunities for growth. Young employees are focused on advancement and they want to work towards a specific career goal. If you cannot offer advancement, try proposing alternative positions in your business and offer them career development that way.

55+: Keep experienced employees working longer

People aged 55 to 64 currently represent 14% of the population in Canada. As the population ages, that percentage will only grow. Canada might take a note from Japan and keep older workers active for longer.

Older talent represents a big opportunity for businesses.

  • Older workers are healthier than they used to be, meaning that they can contribute for a longer time.
  • They are often very experienced and knowledgeable in their field.
  • They can transfer their knowledge to younger workers.
  • They want to be useful and contribute in meaningful ways.

Keeping older people at work and giving them meaningful jobs seem simple, but age bias is a serious challenge. Yet, research shows that older workers contribute to cognitive diversity and improve efficacy and engagement in their companies.

How to make your business attractive to older workers

  • Think flexibly

    Workplace flexibility is the best way for companies to encourage older workers to remain employed. Research shows that older workers keep working only under certain flexible conditions. You can start by offering more flexible or reduced hours, more autonomy and part-time work.
  • Celebrate phased retirement

    Some firms have started to offer gradual retirement, or “bridge retirement”, which is a phased-in transition from work to retirement. Using bridge employment encourages the retention of older workers and allows the transfer of their skills and knowledge. It gives them the opportunity to mentor and train your other workers.

Immigrants: Tapping into a growing pool of workers

Immigrants represent an increasing share of the Canadian labour force. In the years to come, immigrants will account for about 70% of labour force growth. Statistics Canada predicts that immigrants will make up to 34% of Canada’s labour force in 2036.

Why should you hire immigrants?

  • Many highly skilled foreign workers are looking for new employment in Canada.
  • The potential of many immigrants is still underutilized.
  • Diverse talents improve workplace performance and innovation.
  • Employees with diverse backgrounds can help you access new networks and markets.

Still, integrating immigrant workers is a major task. Our survey reveals that a third of entrepreneurs report the language barrier and cultural differences as major challenges to hiring immigrants.

How to make your business attractive to immigrants

  • Look beyond mainstream networks

    In many cases, immigrants have reduced professional networks in Canada, which limits their knowledge of job opportunities. This means that candidates may not be applying for a job they are qualified for. To overcome this barrier, you can build partnerships with immigrant-serving organizations and actively look for immigrant-talents.
  • Offer mentorship programs

    Cultural differences can make it difficult for newcomers to decode the unwritten organizational rules and cultural norms of a Canadian workplace. You can facilitate their integration through mentorship programs. For people in a new and unfamiliar environment, it helps to find support and connect with a social community.

The labour shortage is here to stay

Difficulties in hiring and retaining employees are not going away. Reaching out to these pools of underemployed workers is one of the quickest and most effective strategies businesses can put in place to overcome hiring challenges.

Putting in place the right hiring practices to reach out to these communities could significantly help your business find the help it needs. You can prepare for the future now by creating a more diverse and inclusive workplace.

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