August Labour Report: Talent squeeze slightly loosens its grip

After months of record-breaking, historic unemployment lows, Statistics Canada reported a rise of the unemployment rate by 0.5 percentage points last month to 5.4%. Statistics Canada notes this is the first increase since May 2020 that hasn’t coincided with a tightening of public health restrictions. This doesn’t mean we’re about to see an immediate shift from a tight recruitment market, as other factors are on the horizon but, it does indicate the Canadian labour market may be on its way to acclimatizing to the current market temperature.

The tight job market is changing traditional assumptions

One thing that has become very apparent, with the end of summer, is that employers need to remain flexible and open minded regarding traditional assumptions.

History suggests that as jobs disappear due to automation new jobs always emerge. This is supported by the August Labour reports that stated and employment in occupations that usually require a high school diploma or less has decreased by 3.8%.

However, Professor Geraint Harvey, DANCAP Private Equity Chair of Human Organization at Western University, says one reason automation hasn’t been more detrimental for workers is that ultimately employees are also consumers. “To reduce employment is to reduce the market for products,” Harvey says. “Which is bad for manufacturers and capitalism itself, “ and we see this in the number of Canadians working in jobs that typically require a university education is up by 18% compared to August 2019.

At the same time we have good news for those without post secondary education, the number of workers who have a high school diploma or less working in occupations that typically require a university education rose by 41% over the same three-year period, which is likely a result of employers seeking transferrable and practical skills over academic achievements.

For younger generations this is good news. Statistics Canada says, “demographic shifts will change the face of the working-age population, which is becoming more educated and ethnoculturally diverse.” Ultimately the jobs that older generations have been worried about disappearing, the younger generations don’t want to do anyways.

More employees considering leaving their job

Although Canadian employers have been struggling with recruitment over the past year, they’ve at least had relief from their employees exiting on mass. However, results from last month’s labour force survey suggests the number of Canadians who are considering a job change is on the rise. The proportion of permanent employees considering leaving their job within the next year has nearly doubled the level recorded earlier this year from 6.4% to 11.9%.

This still doesn’t mean we’re about to have a “Great Resignation” situation on our hands, instead it reflects the adjustment of expectations Canadians have developed over the last several years. This combined with the fact that more than 20% of Canada’s workforce is currently over the age of 50 and eyeing retirement, means there are a multitude of reasons employees are exiting traditional job structures.

While salary and benefits continues to top the charts for features of a job respondents consider either essential or very important, workplace health and safety, job security, relationships with supervisors and colleagues, and job autonomy round out the top 5 job attributes valued by Canadian employees. This is great news for employers looking to improve their Employee Value Propositions (EVP), as the majority of these features employees are looking for are relatively inexpensive to implement.

No end in sight for recruitment challenges

Recruiting and retaining skilled employees is expected to be an obstacle for Canadian businesses over the next three months. According to respondents of Statistics Canada’s 2022 third quarter survey on business conditions, shortage of labour is expected to be an obstacle for 37% of businesses and retention is expected to be an obstacle for 31%. Of businesses that expect to have labour-related obstacles, 62% report that challenges related to recruiting and retaining staff are more challenging than the year prior.

The number of job seekers has increased by 106,000 since June. However, the number of Canadians who left their job in order to retire within the previous 12 months increased by 76,000 from the previous year. So despite the gains, Canada still has a talent deficit.

The reality facing Canada is there's simply not enough people to replace the retirees. This has been an ongoing issue for many years. While attracting skilled immigrants has narrowed the gap, the pandemic, subsequent labour exodus and now the retirement trend, has exasperated the talent shortage.

However, just because retirement is looming for many Canadians, it doesn’t mean that the answer is to focus only on hiring younger employees. Employers who are able to see past their unconscious hiring biases will benefit from a wealth of experience and knowledge from this invaluable demographic over the next decade.

Trust the experts

At Agilus, we leverage our deep understanding of the country, regions and local markets combined with the complex and varied experiences of our 275+ staff who all have a voice within our organization — to take the lead, have real human connections and deliver better outcomes for both our clients and workforce.

The backbone of every successful organization lies in the strength of its employees. If you’re ready to transform your hiring and retention strategy reach out to us today. Our team is ready to provide you with in-depth knowledge on the world of work including employment trends, diversity and inclusion hiring practices, Canadian-focused salary guides, competitor analysis, and more. Bottom line – we minimize the uncertainty of recruiting in a tight candidate market.

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