The pandemic has affected a lot of people, and we have seen more Canadians retire during the pandemic than before. This would have happened because they’re at the edge of their retirement age.
Retirements are expected to remain high at least until 2026, and 20 percent of workers who lost their jobs during the pandemic changed their field of employment. Some of the hiring difficulties include a lack of candidates, lack of skills, and lack of experience.
The Canadian economy is bouncing back as COVID-19 lockdowns ease and businesses everywhere are putting out “help wanted” signs. But businesses aren’t getting enough applicants which has led to what many business owners are calling the most severe labour shortages they have ever seen.
Among the reasons employers cite for the hiring crunch are problems with assessing potential employees’ skills and more competition in the job market. Companies also say they’re running up against a skills gap with people lacking experience and both hard and soft skills. And some firms say no one is applying at all.
Canada’s Labour Market Crisis: Shortage Of Skills Or Labour?
In a challenging global climate, Canada’s labor market has shown strength and resilience, even outperforming all the other G7 economies in job creation through the private sector with highly-skilled, high-wage, full-time positions. Canada even has a higher labor force participation rate than that of the US.
With the unemployment rate at an all-time low of only 5.9% nationally, those who are looking for work appear to be finding it and the demand for top talent in the marketplace is evident with corporations declaring a labor crisis. There isn’t enough talent supply to meet the hiring demand.
At the Future of Manufacturing conference in Toronto this past October, David Aplin Group Principal, Chris Roach, live polled an audience of HR professionals, asking what work-related issues kept them up at night. The vast majority, 81%, responded citing talent and labor force issues as their growing concern.
What Work Related Issues Keep You Up At Night?
But is there a labor crisis in Canada? The research indicates a skills shortage or a mismatch of skills rather than a labor shortage and many associations have echoed the same sentiment. According to the Government of Canada’s Jobs Report: The State of the Canadian Labour Market, employers are expressing significant recruitment difficulties finding talent with the required skills.
The Canadian Chamber of Commerce lists skills shortages as the number one barrier to Canada’s competitiveness.
A third of senior Canadian executives surveyed by Workopolis reported that a shortage of skilled workers is the greatest challenge facing Canadian businesses, on par with concerns about the general state of the economy. The Canadian Federation of Independent Business reports that about a third of businesses surveyed reported having experienced skills shortages limiting their expansion, a rate that is double what was seen in early 2010.
The Canadian Manufacturing Coalition states that nearly one-half of companies surveyed face “immediate labor and/or skills shortages.”
Currently, Canada is seeing a structural shortage take place. When it comes to labor, any shortage is either structural or cyclical, and in an active economy, shortages are expected. Structural shortages often happen when we see major developments in technology, rapid growth in industries, and shifts in demographics. In all economies, the available workforce is determined by immigration and demographics. When the imbalance between supply and demand exists in multiple sectors and regions, it is usually an indicator of a labor market mismatch. Essentially, most that are unemployed in today’s market either don’t have the required skills or they are living in regions with a lack of job vacancies.
