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The Talent Shortage in Canada and How to Combat It

If you’re an employer looking to staff up as the pandemic begins to wind down, you may be finding it more difficult than you expected. According to our 2021 Talent Shortage Survey*, 48% of Canadian employers report difficulty filling jobs, the highest number in at least 10 years. Unemployment is still relatively high, at 7.8%, versus a pre-pandemic average of 6%.

What is going on here?

Not surprisingly, the root cause of the majority of the talent shortage is the continuing pandemic. People are concerned for their health and reticent to return to in-person work. In our 21 Trends for 2021 report, the base of today’s needs pyramid for workers is “keeping me and my family healthy.” We’ve identified this as an emerging trend, unlikely to fade when Covid goes away. Child care is an integral part of keeping the family healthy, and the new ways of working demand greater flexibility in this area.

There are other factors involved in the current talent shortage:

Recovery benefits are ongoing for some workers. Stimulus payments and other recovery assistance has provided a lifeline to many workers affected by the pandemic. The Canada Emergency Response Benefit (CERB) ended on September 27, 2020, but new recovery benefits are available until September 25, 2021 for many past recipients. Some are making as much or more on unemployment as they would by working a job—without any of the risk to their family’s health. Those with ongoing child care issues are even less motivated to forego their newfound flexibility.

The minimum wage in Canada varies depending by province. But some major employers, such as Amazon, which offers a minimum of $14/hour and an average of $18.23, are pushing worker expectations higher.

The seesaw effect of the economy opening and closing has resulted in some workers being hired, only to be laid off again. Many workers have become discouraged and have opted out of the job market for the time being.

In this tight labor market where open roles are sometimes going unfilled, we’re counselling clients that they need to understand what workers want today so that they can attract and keep the skilled talent they need.

Workers are most concerned with:

• Fast decisions – People are conditioned for immediate gratification (i.e., same-day delivery of packages, on-demand entertainment). They want to apply today, start tomorrow and be rewarded with their pay the same day/week. Do whatever is possible to streamline and automate your hiring process. Make the onboarding process digital rather than hosting in-person classes so that candidates can start any time, any day. If background checks or drug screens are needed, consider running them after the hire. Working with Manpower can enable fast decision-making by bringing you qualified, vetted candidates quickly. Our skilled recruiters can source, interview, and onboard candidates, taking the pressure off HR or hiring managers.

• Competitive pay and benefits – Consider raising your minimum. We know from past experience that when major players raise their minimum wage, other companies quickly follow. This is especially valuable in a climate where workers are collecting substantial unemployment benefits. Other approaches include offering retention bonuses after one month, six months, etc. One of the benefits that workers want today according to our recent research is on-demand learning so they can stay up-to-date on skills.

• Flexibility – After health concerns, the top worry for Canadian workers in our Future for Workers by Workers report was “going back to the way things were,” – that is, losing their newfound flexibility and being expected to be back in the workplace daily. Here are some ideas for providing a flexible work environment:

  • Define “full-time” as 32-48 hours
  • Create a culture of flexibility with accountability – offer a hybrid schedule if possible
  • Use a scheduling app to allow workers to give up and pick up shifts
  • Offer job sharing or splitting

And speaking of flexibility, it’s important for employers to be flexible in their thinking too. For example, we’ve seen a lot of workers from the service and hospitality industry that have thrived in call center roles. Consider soft skills such as service orientation, and not necessarily matched experiences. And when defining a role, be sure to look ahead, and consider what skills will be needed when the pandemic eases.

The question on everyone’s mind is “How long will this last?” The next weeks and months will tell us whether this tightness eases when vaccinations become more widespread, stimulus payments end, and schools/childcare are back to normal. We can, however, predict that those with skills will continue to choose employers who offer the best blend of good wages, fast decisions, and flexibility; and companies will continue to respond to the market forces in front of them.

*Talent Shortage – undertaken in January 2021 – is a survey of 42,000 global employers. It identifies the proportion of employers who report difficulty filling positions in their organization. It reports on which jobs employers say are most difficult to fill, and identified candidate shortcomings that are preventing employers from filling positions.

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