Canadian apparel sector grappling with ageing workforce - Report
Canada's Apparel Human Resources Council (AHRC) has released the findings and recommendations of a major study done on the Canadian apparel industry. The study titled 'Pressing ahead: Canada's transforming apparel industry' was conducted by Alan Milstein and Co., a leading industry consultant. The AHRC had previously conducted labour market information study in 2004.
Since then, both Canadian and the global apparel industry have changed. The study gives a new definition, that the industry is not dependent on domestic production, but on domestic product development. Based on the new definition, the main sub-sectors are manufacturers, wholesalers/offshore producers, and retailers.
One of the major findings of the study is that the combined revenues of apparel manufacturers and wholesalers have remained unchanged from the pre-trade liberalization years of 2004 to 2008. It indicates that the industry did not face closures, but survived by adapting to newer realities by shifting business models.
The study has mentioned a list of challenges that will drive change in the apparel industry in the coming years. The list includes Government and social compliance, regulations, Internet, rising production costs, the globalization of retail, etc.
The study has also identified some issues that could be of concern to the industry. Most notable among them is the effect of the aging workforce, both at management level and in production units.
“The workforce has shifted from predominantly production-based to being slightly more service-based,” the survey noted and went on to add that the trend is expected to continue. It is because the services sector may grow at a faster pace than the change in number of production personnel.
The survey found that the employers are generally optimistic about the future. They project that there will be significant employment growth in both production personnel and services during the next two years.
However, the survey also mentions, that the employers have expressed concern over some of the issues.
71% of companies surveyed continue to operate without strategic plans. This raises a concern whether the companies' growth expectations are reasonable and achievable, especially when they are projecting a growth rate that is much higher than the general economic growth rate.
35% of companies face a problem in business continuity, i.e. they are either considering implementation of a succession plan, selling the company, or ceasing operations within the next two years.
Other than the senior managers, the study found, the industry is also facing the challenge of aging production workers. In fact, the study concludes that nearly 7,000 production workers could be nearing retirement. The problem is compounded further by the fact that there are no trained personnel available to train new production workers, due to the large scale downsizing in the last decade.