Is your business struggling to find and retain workers? Do you see ‘Help Wanted’ signs everywhere you look on your town’s main street? In recent months, the labour shortage has been at the forefront of many news stories, webinars, and conversations in Cowichan and across Canada. In this article, we’ll explore the facts about Canada’s labour shortage, and introduce the Cowichan Employer Resource Guide to help businesses cope.
About the Labour Shortage
In essence, a labour shortage means there are more job vacancies than people looking for work. In this situation, employers struggle to find workers to fill vacant positions, and are often forced to adjust their business practices to operate short-staffed. It can also be harder to retain existing workers due to increased competition between employers for the limited labour pool. Some businesses turn to higher wages, signing bonuses, and other incentives to recruit and retain workers.
The data shows that Canada is currently experiencing a labour shortage. In August, RBC Economist Carrie Freestone reported a record high national job vacancy rate of 5%, with BC leading the provinces with a 6% job vacancy rate.[i]
Indeed Hiring Lab has been tracking the number of Canadian job postings on their site, which were up 47% as of September 24 when compared to early February 2020.[ii]
Impacts of the Pandemic
The COVID-19 pandemic has had a significant impact on our labour market. The pandemic resulted in short-term imbalances within the market, while some sectors saw significant job losses, other sectors actually saw job gains. Businesses operating in accommodation, food services, retail and manufacturing have lost thousands of jobs, but professional services, education, public administration and health care actually gained workers.
Some employers have suggested that government assistance programs could be making hiring so difficult. While these programs may play a part, many previous employees in retail and service have since returned to work, or back to school for training and certification. These previous employees just may not be in the same sector; in fact, a labour market survey showed that 20% of workers who lost their job during the pandemic actually changed fields of employment.[iii]
In addition, travel restrictions and border closures implemented to slow the spread of COVID-19 have impacted immigration and the Temporary Foreign Worker Program, an important source of labour for Canadian companies. Immigration to Canada was down almost 50% in 2020 compared to 2019[iv], and the Temporary Foreign Worker Program welcomed 13,830 fewer people in 2020 than in 2019.[v]
The Underlying Cause: Demographics
While the pandemic has certainly exacerbated the situation, the labour shortage is not a direct result of the events of the past 20 months. There are larger forces at work! In fact, Canada was experiencing tight labour conditions pre-pandemic, with a historically low national unemployment rate of 5.7% reported in 2019.[vi]
One of the underlying causes is in fact demographics. Our aging population has resulted in declining participation in the labour force over the past 20 years. Canada’s largest demographic, Baby Boomers, have been reaching retirement age and leaving the workforce, while the number of young people entering the labour market is not enough fill the gap. The graph below illustrates the distribution of Canada’s population by age in 2001 and 2021, showing the higher proportion of higher age groups over time.[vii]
“There are a number of factors influencing the labour market right now, and demographics are one of the main drivers,” says Pedro Oliveira, of Ethos WorkBC Cowichan. “In Canada, for every one employee that retires and leaves the labour force, we are three people short; we cannot ignore this issue. The information comes straight from Statistics Canada, and the numbers don’t lie, the changes in Canada’s working demographics could mean this continues to be a problem for the next 5-10 years. With WorkBC we are continuing to do research into the current challenges of the labour shortage, to fully understand all the factors involved.”
Coping with the Labour Shortage
Now that we’ve explored the extent of and driving forces behind the labour shortage, its time to look at solutions. Many of the factors influencing the labour shortage are controlled at the national level, so what can we do locally to improve the situation?
There are many short and long-term strategies that may help your business address these challenges. Over the coming weeks, Economic Development Cowichan will be exploring some of these strategies as we develop the Cowichan Employer Resource Guide. We’ll post strategies and tools that businesses can employ to combat the labour shortage, with links to get the ball rolling. We’ll explore each topic further in our blog, with examples of how each strategy has been used to create success in the workplace. The guide will be published next week, and will be updated regularly with new information. Subscribe to our newsletter to be notified when new blogs or updates to the Resource Guide are posted.
“Businesses in Cowichan are using creative solutions to attract and retain employees, and we want to highlight those efforts,” says Barry O’Riordan, Manager of Economic Development Cowichan, “there isn’t a one-size fits all solution to the challenge of the labour shortage, but there are different ways businesses can respond to lessen negative impacts and become more resilient to labour market constraints.”
If your business has a hiring success story you’d like to share with the Cowichan business community, please contact our team at edc@cvrd.bc.ca.
WorkBC Can Help
Join WorkBC on October 21 at 8am for a virtual workshop exploring current labour conditions, recruitment and retention strategies, and untapped labour groups that may help you fill gaps in your business. Learn how WorkBC can help Cowichan employers find the right candidates. Call 250.748.9880 to register.
[i] “Are sky-high job vacancies in Canada around for a while?”, RBC Economics, August 30 2021, https://thoughtleadership.rbc.com/are-sky-high-job-vacancies-in-canada-around-for-a-while/
[ii] “Canadian Job Postings Through September 24: Remaining Elevated”, Indeed Hiring Lab, September 29 2021, https://www.hiringlab.org/en-ca/2021/09/29/job-postings-through-september-24/
[iii] “How to Adapt to the Labour Shortage Situation”, Business Development Bank of Canada, September, 2021 https://www.bdc.ca/en/about/analysis-research/labour-shortage
[iv] Statistics Canada. Table 17-10-0040-01 Estimates of the components of international migration, quarterly, https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710004001
[v] “Temporary Foreign Worker Program work permit holders by province/territory of intended destination, intended occupation (4-digit NOC 2011) and year in which permit(s) became effective”, Immigration, Refugees and Citizenship Canada, August 31 2021, https://open.canada.ca/data/en/dataset/360024f2-17e9-4558-bfc1-3616485d65b9/resource/4ff7924d-d606-4320-85e2-581af8f12b6b
[vi] “Are sky-high job vacancies in Canada around for a while?”, RBC Economics, August 30 2021, https://thoughtleadership.rbc.com/are-sky-high-job-vacancies-in-canada-around-for-a-while/
[vii] “Annual Demographic Estimates: Canada, Provinces and Territories, 2021”, Statistics Canada, September 29 2021, https://www150.statcan.gc.ca/n1/pub/91-215-x/2021001/sec2-eng.htm
