Canadian companies risk revenue due to labor shortages

The current labor shortage is seriously affecting Canadian companies: it hinders their ability to complete projects on time, reduces their profits and market share and forces them to move work abroad.

A recent survey by the Business Council of Canada, or BCC, found that more than two-thirds of businesses have had to adjust project timelines due to a lack of skilled workers, and 60 percent of those businesses face lost revenues. The BCC surveyed 80 member companies that employ a total of nearly 1.7 million Canadians in 20 industries, from energy to financial services, generating revenues of approximately $1.2 trillion by 2020. that 30 percent of companies surveyed are moving work outside of Canada to get projects done.

It is a problem with serious consequences. Trevor Neiman, director of policy and legal counsel at the BCC, says Canada loses tens of billions of dollars annually due to labor shortages. “It’s the biggest impediment to economic growth and competitiveness in Canada,” he says. The labor shortage, 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 struggle most to fill technical jobs, which require computer science and engineering skills, as well as skilled trade positions, such as construction, plumbing and electrical work. Data from Statistics Canada reflects these findings: Of the one million job openings the federal agency reported for April, record job openings were in sectors such as scientific and engineering services, transportation and warehousing, finance and insurance, along with construction.

The BCC survey highlighted the importance of immigration when it comes to finding talent, with two-thirds of employers saying they depend on new Canadians to fill positions. From 2025, immigration is expected to account for 100 percent of net job growth, Neiman says, citing government data. “With the aging population and younger generations having fewer and fewer children, the workforce as a percentage of the total population will shrink,” he explains.

To fill positions in the tight labor market, some companies are willing to pay to train employees who do not have the relevant skills needed for a job. According to Neiman, this could cost companies thousands of dollars per employee. Some of the upskilling companies that pay for include post-secondary education, language and cultural training, and other professional development opportunities that help employees recalibrate their skills.

As companies struggle to fill vacancies, the labor shortage offers a ray of hope for Canadians seeking employment. With the unemployment rate hitting an all-time low in May, jobseekers and employees have more influence than ever on factors such as salaries, paid time off and other benefits. If ever there was a time to go after a dream job, even if you don’t have all the skills it takes, it might be now.

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