Riding the Grey Wave: Understanding the Future of Canada’s Labour Shortage
Riding the Grey Wave: Understanding the Future of Canada’s Labour Shortage
Here is a startling fact: in Canada, more employees are approaching the end of their careers than the beginning of them.
According to data from Statistics Canada, the number of seniors aged 65 and older has grown six times faster than that of children aged 0-14. And in 2021, one in five Canadians was aged 55 to 64 — an all-time high in the history of the Canadian census.
Nick-named “the grey wave,” this demographic trend has a host of impacts on our healthcare system, the Canada Pension Plan, housing trends, and of course – the labour market. It’s no coincidence that in the second quarter of 2022, there were more than a million vacant jobs in Canada — the highest quarterly number on record.
As is the case for most G7 nations, labour shortages are set to become a defining challenge for employers in the coming years. Businesses of all sectors and sizes will need to adopt strategies to sustain productivity and growth in a changing population.
Utilizing a report on Employer Responses to Labour Shortages from Statistics Canada and a 2021 survey from the Business Development Bank of Canada (BDC), let’s take a look at five ways employers are addressing the labour shortage in Canada.
By Investing in Training
According to findings from the BDC survey, companies that offer mentoring could be 1.3 times more likely to make retaining workers easy compared to companies that do not offer mentoring.
That means having an internal mobility strategy, including a talent development and coaching plan, is essential (read more about mobility strategies in our blog).
Another strategy is to hire less-qualified workers and provide on-the-job training or tuition support for courses or certification programs.
It’s also essential that businesses continue to develop new talent pipelines. Youth and immigrants need to be better integrated and offered more opportunities in the workforce. And if you ever needed more reasons to prioritize diversity, equity, and inclusion, the benefits of widening your talent pool can’t be understated.
By Investing in Culture
Not only is our labour marketing looking at shifting age demographics, but we’re also looking at shifting values and skillsets.
According to the BDC survey, companies that offer flexible work arrangements could be 1.4 times more likely to make retaining workers easy compared to companies that do not offer such arrangements.
Millennials and Gen Z often tend to be more tech-savvy, but they also have different expectations for their working lives. They value work-life balance, flexibility (such as remote work or flexible hours), professional development opportunities, and corporate social responsibility.
Flexibility, purpose, and work-life balance will look different for every business, but what’s important is that you are intentional and creative in how you think about and approach your workplace culture.
By Examining Compensation Structures
The BDC survey found that the desire for higher wages was by far the main reason workers sought to leave a workplace. Companies that offer competitive salaries and benefits were 1.4 times more likely to find retaining workers easy and 1.7 times more likely to have sales growth above the industry average.
The reality is that compensation levels are set by job market conditions, so employers must have a compensation management plan. Creative solutions like long-term incentive programs can be one way of leveraging compensation strategy.
Keep in mind that salary increases raise ancillary business costs (for example, bonuses and employee insurance premiums are based on salary), so employers need to plan accordingly. At the same time, turnover is more expensive than retention, so you’ll need to find a balance that is right for your business and your industry.
By Investing in the Hiring Process
According to the BDC survey, companies with a formal, structured hiring process were 1.4 times more likely to find hiring easy compared to companies that did not have this.
In an era of growing labour shortages, investing in your search & recruitment strategy is essential. From the initial job posting to the first 90 days of onboarding, your search & recruitment process should be flawless (for more tips on search & recruitment, read our blog).
By Adopting Automation
The fast-growing world of AI technology is here to stay, which means automation will more and more become part of our everyday lives.
In fact, the BDC survey also found that companies that had automated certain areas of their business were 2.0 times more likely to find hiring easy and 1.9 times more likely to see sales growth above the industry average compared to companies that had not automated.
The key will be to find ways to leverage AI technology to improve efficiencies and augment employees’ efforts. But getting there will take a significant investment in tools and training.
Ultimately, there will be no quick fix or single solution to Canada’s labour shortage. Employers will need to work closely with governments, legislators, employees, and researchers to develop a balance of policies and strategies that can ease the burden.
Cenera’s team of HR experts creates custom solutions for complex problems, including search & recruitment, employee retention, business coaching, and workplace culture. We’re here to help your business adapt to a changing world, ensuring you protect and steward your most important asset – your people.
Contact us today for a free consultation to discuss your needs and learn how our HR experts can help.
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