At the beginning of COVID-19, we faced massive layoffs. Canadians everywhere struggled to find jobs. A few months later, 30% of unemployed Canadians stated they were unemployed because of COVID-19, with 62% saying that COVID-19 was why they remained unemployed.
But the tables have turned. Employers are now struggling to find skilled employees to cover the labour layoffs from peak COVID-19 months and deal with new business. 84% of companies expect to face hiring issues this year, with 1/3rd reporting they have open positions that they can’t fill.
Even large corporations like Amazon are grappling with how to hire for their business needs.
This article looks at the Canadian labour shortage and discusses what it may mean for businesses, employees, and Canadians in general.
Inability to find skilled workers
It’s not that no one’s applying to jobs. Some companies still have dozens of applicants. But employers have issues finding potential employees with the right hard and soft skills and experience.
A lot of this has to do with the pandemic. For example, many laid off from the restaurant industry in March 2020 chose to reskill to become programmers or contractors. As a result, a full capacity restaurant industry no longer has the supply to meet its demand for skilled service people and chefs.
A lack of particular trade skills is also a growing trend. An RBC report noted that Canada’s workforce will see a 10,000-worker deficit in professions such as industrial mechanics, boilermakers, and welders. Part of this shortage is due to an outdated stigma around skilled trades and that these jobs usually involve physical work, poor pay, and low prestige. But it’s possible that the pandemic also played a factor as these roles generally lack the opportunity to work remotely.
Employee market means wage growth and better benefits
With such high demand for skilled labour and low supply, Canada is in an “employee market”. This means job seekers have many opportunities to choose from. Companies, in turn, will have to sell potential employees on their organization more than a skilled worker has to sell themselves to the company.
Higher wages are one way businesses are trying to tempt for potential workers. Corporations like McDonald’s, Chipotle, and Amazon are raising their minimum wage to find workers. But experts say that wage growth isn’t enough to attract talent; potential employees are also searching for career progression.
Business owners are trying other benefits, too: bonuses, profit sharing, work-life balance, and flexible work are all on the table. If the pandemic taught us anything, it’s that remote work is possible in corporations that once deemed it impossible. Instead of returning to the office, some employees are leaving roles that require mandatory office hours for a remote work style.
The U.S. is also fighting for Canadian talent
Canada’s not the only place with a labour shortage. Our neighbours to the south have a similar issue, and they’re remedying it by stealing Canadian talent. Software engineers, bankers, and lawyers are leaving Canada in hordes to bigger and better paying U.S. firms, hastening the “brain drain” that Canada usually faces.
Brain drain refers to the Canadian-born, raised, and educated individuals, especially in tech, who leave for hotbeds like Silicon Valley to work at organizations like FAANG (Facebook, Amazon, Apple, Netflix, and Google). But this also occurs for other industries like banking and law.
As the American economy comes out of uncertainty, there are new mergers and acquisitions, never-ending legal questions, demand for e-commerce technologies, and trillions in stimulus. American companies are thirsty for more technical employees, as a result.
These companies can outbid their Canadian counterparts too. For example, a Canadian lawyer at a major Canadian law firm left for the U.S., and his salary went from $130,000 CDN per year plus bonus to $240,000 USD per year plus bonus.
Another factor to the increased U.S. hiring spree is the switch to remote work. U.S. companies can now hire remote Canadian employees without having to manage immigration visas and other hassles. This has also made it easier for Canadian employees to switch.
The employee-favoured Canadian labour market is an excellent message for skilled workers looking for new opportunities. With the market in their favour, it can mean better wages and benefits. There are also many opportunities outside of Canada for those with the proper skill set.
