The labor shortage is not over – and employers need to lower their hiring expectations

Rick Omond’s construction company in New Brunswick has awarded three wage increases in the past year and a half as it tries to retain workers amid a record labor shortage.

“Labourers, carpenters, electricians, plumbers – they know how busy it is. And it’s a daily battle that they are looking for more money,” said Omond, vice president of Newco Construction in Moncton.

Omond says he could hire six carpenters and laborers right now – if he could find them. And without a full team, he says, projects take longer to complete.

Like many construction companies in the province, Newco has had to adjust its hiring expectations and hire people with little or no experience.

According to a recent study of 510 Canadian hiring decision makers, one in four employers hired someone they normally wouldn’t have due to a labor shortage. The survey was conducted between November 10 and December 2, 2021 on behalf of recruitment agency Express Employment Professionals.

Even so, with employers outbidding wages, Omond says it’s very easy to lose workers for a small pay raise elsewhere. “There is no more loyalty,” he said.

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Nearly one million jobs to be filled in Canada

The labor shortage that erupted during the pandemic is far from over. According to Statistics Canada, there were 915,500 job vacancies in the fourth quarter of 2021. This represents an increase of 63% compared to 2020.

Jobs are also staying vacant for longer, with nearly half of vacancies remaining vacant for 60 days. In 2020, 36% of job openings remained vacant this long.

Some of the most difficult occupations to fill include waiters, construction workers, and social workers.

The Indeed hiring website has also seen a dramatic increase in job postings over the past year, up 69% as of March 18 from February 2020. The largest increase in job postings over to pre-pandemic levels was for jobs in the Prairie and Atlantic provinces. .

Based on the number of employer posts on this site in March, top companies hiring include Alberta Health Services, the Big Five banks and big-box retailers, such as Walmart and Home Depot.

Challenges likely to persist, economist says

Hiring may have gotten tougher over the past year, but BDC chief economist Pierre Cléroux says the labor shortage isn’t primarily related to the pandemic.

“The main reason why we have difficulties [recruiting] because we have an aging population,” he said.

Between 2011 and 2021, Statistics Canada data shows that the share of Canadians aged 65 and over has increased from 14.4% to 18.5%.

Worse still, the pandemic has slowed immigration over the past two years, fueling labor shortages.

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Cléroux says he expects hiring difficulties to continue over the next five years, until the baby boomers have all retired and the job market stabilizes. In the meantime, he says companies need to find ways to deal with labor shortages and get creative with recruitment.

The best way to address the shortage is to invest in technology, particularly around automation, he said.

According to the Bank of Canada Business Outlook Survey for the first quarter of 2022, 42% of businesses said they planned to invest more in machinery and equipment. One of the reasons given for this increase in investment was “to alleviate labor constraints through productivity improvements”.

On the labor side, Cléroux says employers should invest in training less-experienced workers and tap into demographics with higher unemployment rates, such as young people, immigrants and retirees who could work at home. part-time.

“It’s not going to go away in a few months, so you need a long-term strategy to deal with this labor shortage,” he said.

Skills shortage costs billions: report

At the same time, some researchers are looking at the current labor market through the lens of a skills shortage.

“What we’re seeing is that the pace of employers’ demand for skills and the skills they need are changing faster than our training and skills production systems can keep up,” said Tricia Williams, Director research, evaluation and knowledge mobilization at Ryerson University. Future Skills Center.

Vacancies are more acute than vacancies, Williams said, because the set of tasks associated with any job is rapidly changing as more and more technology is integrated into workflows.

“[Workers] may only meet, say, 60 or 70% of the skills required in a job, when before they had maybe 100% of the skills needed,” she said.

WATCH | Tricia Williams describes tasks that cannot be done by computers:

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This skills shortage is costing the Canadian economy billions of dollars, according to a report by the Conference Board of Canada, in partnership with the Future Skills Centre. The report estimates that the unrealized value of skill vacancies was $25 billion in 2020, up from $15 billion in 2015.

Williams described the number as “astronomical”, adding that the skills most in demand are not what people might expect.

“These are things that are very human-centric skills,” Williams said. “Active listening, critical thinking, social and emotional skills – all the things that are really around how humans connect with each other.”

And when it comes to the future of work, the kinds of tasks that won’t be automated are those that require interpersonal skills, she said.

Cléroux agrees that a skills mismatch in the labor market is fueling the problem. Given the abundance of available and unfilled jobs, he says it’s time for governments to move away from job creation, which has been their goal for decades, and invest in retaining the workforce. to respond to changing labor market demands.

“There is no doubt that the labor market over the next 10 years will be very different,” he said.