A recent study by the Canadian Federation of Independent Business titled “The labor shortage is back with a vengeance” found that 54% of businesses could not get all the employees they need, with only 42% reporting that they could not get enough of their jobs. able to fully complete.

Some small businesses have made changes to increase their competitiveness in the job market, such as raising wages, but only 22% of those who raised wages found it effective. Nearly two-thirds (63%) of occupations reported that the lack of candidates with the required skills/experience was the main obstacle to their labor problems. While jobs may be available, employers still need employees with the skills to meet their business needs.

Shortage of candidates, qualification mismatches, and labor market disruptions continue to drive labor shortages.

Small businesses were already facing a significant labor shortage in early 2020, and the pandemic has only exacerbated the situation. Industries that were closed for long periods of time, such as hospitality, have seen a mass exodus as workers have moved to upskills or to other jobs or sectors.

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They’re respective in social services and hospitality, 37% and 48% of employees saw the sectors changing. While nearly all sectors are facing major demographic upheaval – about 24% of small businesses reported that employees have closed industries because of the pandemic – the major concern now is whether to replace those currently retiring or switching. Not enough new employees are coming in. farm.

The COVID-19 lockdown and restrictions hit small businesses hard. Now that most countries are opening back up, we need governments to quickly address the labor shortage to ensure a robust recovery.

Wage increases haven’t been the expected silver bullet for retaining or luring new employees
More than four out of five businesses (82%) facing staff shortages have already raised wages in their occupations. While it worked for some, half reported it didn’t help them attract workers. These occupations said that they did not find any eligible applicants or any applicants for the positions available in their occupations even after increasing their wages.

Business owners are in a difficult position and have to balance job seekers’ expectations with their ability to remain competitive.
One reason for the lack of applicants is that the distribution of job seekers in different education categories is unbalanced. In Q1 2021, 22% of the unemployed had a level of education equal to or higher than a bachelor’s degree, while only 15% of the market requires this level of education. Currently, most job vacancies in Canada are concentrated at lower education levels. However, job seekers who wish to immigrate to Canada are at higher education levels—leaving a mismatch in skills and expectations. This greater qualification may leave job seekers to expect different working conditions—salary or role—from what an employer may be willing to offer.

The temporary foreign worker program has the potential to be one of the best solutions to the labor shortage
The most successful solutions in dealing with the reported labor shortage are increasing the level of automation used in businesses (81% success rate) and the Temporary Foreign Worker Program (TFWP) to bring in additional workers (52% success rate). were. However, while the success rate of TFWP is higher than that of some other methods, the use of the program is comparatively low. Only 16% of small businesses reported using TFWP. The low use to high success rate ratio suggests that temporary foreign workers may be a promising solution to Canada’s labor shortage, especially if the program is expanded to other areas. Opening the TFWP to a larger subset of the business community would allow for a general influx of workers – while maintaining the skills needed to be what employers and employees are looking for.

The TFWP also allows for businesses that most need to apply for additional workers themselves, without worrying about competing directly for the labor pool. During the pandemic, the relocation of workers has added a great deal of competitiveness to the labor pool. For many positions in manufacturing, agriculture, and business services (eg, information technology, copywriting, mechanics), it is very difficult to compete for equal labor. Having a direct application pool will enable these areas and others to find the staff they need.

For TFWP to become a major solution, some improvements to TFWP must be considered. Currently, TFWP is too time-consuming – and expensive for most small businesses to use, costing up to $1,100 per application and potentially taking months if not longer to process.

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