Canadian Businesses Are Risking Revenue Due to Labour Shortages
The current labour shortage is having dire consequences for Canadian companies: It’s stymieing their ability to finish projects on time, cutting into their bottom lines and market share and forcing them to relocate work outside of the country.
A recent survey by the Business Council of Canada, or BCC, found that more than two-thirds of companies have had to adjust timelines for projects due to a lack of skilled workers and 60 per cent of those firms are grappling with lost revenues. The BCC surveyed 80 member companies that employ a total of nearly 1.7 million Canadians across 20 industries, from energy to financial services, generating revenues of about $1.2 trillion as of 2020. Even with businesses adjusting hiring expectations in the current labour market, the BCC found that 30 per cent of the companies surveyed are relocating work outside of Canada in order to get projects done.
It’s a problem with serious consequences. Trevor Neiman, director of policy and legal counsel at the BCC, says Canada is losing tens of billions of dollars every year because of the labour shortage. “It’s the number-one barrier to economic growth and competitiveness in Canada,” he says. The labour shortage, which is a shortage of specific, in-demand skills, cost the Canadian economy $25 billion in 2020, up from $15 billion in 2015.
The BCC survey found that companies are struggling the most to fill technical jobs, which require skills in computer science and engineering, as well as skilled-trade roles, such as construction, plumbing and electrical work. Data from Statistics Canada echoes these findings: Out of the one million job vacancies the federal agency reported for April, there was a record-high number of openings in sectors like scientific and technical services, transportation and warehousing, finance and insurance, along with construction.
The BCC survey emphasized the importance of immigration when it comes to sourcing talent, with two-thirds of employers saying they depend on new Canadians to fill roles. Starting in 2025, immigration is projected to account for 100 per cent of the net growth in the labour market, says Neiman, citing government data. “With the aging population and younger generations having fewer and fewer children, the labour force as a proportion of the total population will shrink,” he explains.
To fill roles in the tight labour market, some companies are willing to pay to train workers that lack the relevant skills needed for a job. According to Neiman, this can cost firms thousands of dollars per worker. Some of the upskilling companies are paying for include post-secondary education, language and cultural training and other professional development opportunities that help workers recalibrate their skills.
While businesses are struggling to fill open jobs, the labour shortage offers a silver lining for Canadians looking for work. With the unemployment rate hitting a record-low in May, job seekers and workers have more leverage than ever over factors like salaries, paid time off and other job benefits. If there was ever a time to go after a dream job, even if you don’t have all of the skills required for it, now might just be it.