One of the interesting trends we are seeing in the Canadian workforce is the increase in labour shortages in various markets. This especially holds true for Canada’s small and medium-sized companies who are struggling to fill positions. What this means is that these companies are going to need to adapt to this trend and will need to manage their HR and staffing needs differently in the years to come.
In fact, Pierre Cleroux, chief economist for the Business Development Bank of Canada recently stated that “Canada’s small and mid-sized companies must find ways to adapt to a “new norm” of worker shortages that will likely persist for a decade”. Cleroux goes on to suggest that the bigger issue is the supply of younger workers is barley keeping up with the number of older people who are retiring.
Of course this is nothing new. For years now, it has been known that the aging demographic in Canada will be retiring and there will be shortages in the trades and other industries. So how will this impact you? Here are some facts from the Business Development Bank of Canada:
- Canada’s small to mid-size companies represent about 50% of the Canadian economy
- Canada’s small to mid-size companies are critical in small communities
- 39% of small to medium-sized businesses are having difficulty in hiring the type of new workers they need
- In July, the National unemployment rate fell to a four-decade low of 5.8%
In addition, the Canadian Federation of Independent Business announced that the job vacancy rate hit 3.1% in Q2 which is at an all-time high since this metric began being calculated in 2004. So the stats are telling us that the labour shortage is a real thing and that small to mid-sized businesses will continue to have a challenge in staffing their companies.
But alas not all is lost. While the labour shortage is not expected to be a short-term thing and instead could last for the next decade, there are some things that you can do when managing your HR and staffing needs.
What can small and medium-sized businesses do to circumvent labour shortages?
- Revamp your HR Plan – if you don’t already have an HR or staffing plan, you should create one. Look at upcoming timelines and see where and when you will need additional resources. Think short, mid and long range. Perhaps six, twelve, eighteen to twenty-four months out. Determine if you will require full-time or temporary staffing. Consider working into your budget a hiring budget depending on the need for staffing. You will truly have to change the way you manage your human resources. The more proactive you can be, the better.
- Tap into the older demographic – studies are showing that people are living longer and are holding off on retirement. The definition of retirement is evolving. People are staying in the workforce longer. Depending on the positions, this could be an option for rounding out your team and dealing with labour shortages. Of course the nature of the work will have an impact on the validity of this option. Companies are already recruiting retired workers, so this is an option that is already being exercised by some companies.
- Promote your business to the younger demographic – work on creating awareness about your brand with the younger demographic in your town/city. Consider promoting your brand online via social media channels and consider sponsoring events or promoting your business in schools, or other areas where the younger demographic frequent. Generate interest with top of mind awareness.
- Revisit your compensation packages – consider revisiting your compensation policies to see if there is a means whereby you can “sweeten the pot” so-to-speak in terms of what you can use to attract new workers. Studies show that this is a common tactic used in labour shortages and wage growth is often higher for those companies with vacancies as opposed to these without.
- Automate portions of the work – some organizations may have the option of looking to automate tasks or revisit how certain jobs are done. While this might not be an option for all small or mid-sized businesses, it can be a temporary solution to assist in your labour requirements. Increased automation can be another tactic used to offset labour shortages.
- Rethink the required skillset – you may need to hire candidates who do not have all of the specific job skills that you require. There are times that you simply need to get the work done. This might mean investing a bit more in training and development, but quite often this can work out well for both the employee and the employer.
- Consider temp employees – Lots of companies have temporary employment needs where they could use short-term relief. Quite often temporary or contact positions can lead to permanent employment. Not to mention that working with a temporary employment agency is relatively pain free and can provide a quick boost for your staffing needs during times of labour shortages.
- Build relationships with a recruiting firm or employment agencies – no this is not meant to promote ourselves, working with a recruiting firm or employment agency is a great way to keep on top of candidates and ensure that when required, your staffing efforts can be supported quickly and efficiently.
So while labour shortages in the Canadian marketplace may become the new norm for the next decade, there are options and strategies that you can use to ensure that your company meets its resourcing needs. In some cases, in smaller centers, the drawing power is simply limited which means that you may have to broaden your recruiting efforts. However, with proper planning and a proactive staffing solution you can be ready for labour shortages and continue nurturing the growth of your company.
Need assistance with your recruiting or staffing efforts in the Okanagan? Contact us today to set up a consultation. Speak with one of our experienced HR consultants and begin preparing for your 2019 staffing needs today!
Labour shortage is the ‘new norm’ that will last a decade: BDC economist says – Financial Post