Walking down the street today, help wanted signs seem to be everywhere. Of course, if you own your own business, or work in a small business, you know what it’s like to have that sign hang in your window for one, two, even three months or more.
While many blame the Canadian Emergency Response Benefit (CERB) for the shortage, a September 2021 study by the Business Development Bank of Canada (BDC) suggests otherwise.
“Labour scarcity is here to stay,” according to Pierre Cléroux, Vice President, Research and Chief Economist for the BDC.
That means when CERB ends October 23, 2021, the labour shortage won’t disappear.
Canada’s long-term labour shortage
The labour shortage in Canada didn’t begin with the pandemic – it just made the problem worse. According to the BDC, Canada’s labour shortage started around the turn of the millenium as ‘Boomers’ began to retire faster than young people joined the workforce.
Combine that ongoing labour shortage with the pandemic and over half of entrepreneurs in Canada are struggling to find employees, while over a quarter are losing their existing workers to a very competitive market.
For entrepreneurs, this can slow growth and even, on the extreme end, kill a business. To thrive in the current climate, you need a strategy that will keep your business fully staffed.
Tips for finding and retaining employees
As hiring and retention grow more difficult, many businesses are forced to do more with fewer people. This ends up lengthening work hours, contributing to burnout and creating a downward spiral as employees quit, leaving everyone else with even more work.
To avoid that, it’s critical to proactively address the problem by putting solutions into place whether or not your business is suffering from this current labour drought.
Below, you’ll find 5 solutions you can put in place today to help deal with the labour shortage in Canada.
Create a strong culture
The pandemic has drastically changed how we work, and business culture needs to change along with it. For many, this change includes a slower pace of life and much more flexibility than they used to have.
According to the BDC, companies offering flexible work arrangements are 1.4 times more likely to retain workers than companies who don’t.
The good news is, with remote work, job-flexibility is so much easier to implement than it used to be. However, we don’t recommend just jumping in and making whatever changes you think are important.
Instead, start investigating your work culture to determine what’s working for you and your employees, and what isn’t. By listening to the people in your company, you’ll increase retention and also be able to offer applicants a more appealing work culture.
Offer versatile compensation
In today’s super-heated market, a business cannot simply set compensation as they wish. With so many options open to applicants, sweeter packages will quickly draw the best candidates, leaving you sifting through resumes that lack the qualities you’re looking for.
Not only are competitive compensation packages 1.4 times more likely to retain workers, according to the BDC, but companies offering them are 1.7 times more likely to exceed the industry average for sales growth – meaning higher compensation can pay for itself.
But remember, compensation is more than just wages. It takes on two forms:
Both need to align with your competition to ensure you attract the best prospective employees. So, before you post a job application, make sure you do your research so you can be sure your compensation package is in line with (or above) industry average.
Create a formal hiring process
It may not seem like much, but the BDC found that companies instituting a formal hiring process were 1.4 times more likely to find hiring easier.
This is great news for small companies who don’t have the extra budget to drastically increase their compensation packages, or offer signing bonuses. With a bit of time and some research, you can create a formal hiring process that will make hiring easier.
Another option that does not include a drastically increased budget is to create a mentorship program in the company. The BDC found mentorship opportunities made it 1.3 times easier to retain workers.
Mentorship is a huge topic that deserves it’s own post. If you’re interested on creating a mentorship program in your company, check out futurpreneur.ca for more information.
Not all of the BDC’s recommendations had to do directly with hiring. Because this labour market is expected to last, they recommend automating as many processes as possible to lower the need for employees.
This will not only save you time, but will eliminate jobs for your current employees – which could aid in retention. In fact, the BDC found automation made it twice as easy to hire and 1.9 times more likely to see accelerated growth.
The main hurdle to this is, of course, the high upfront cost of automation. However, leveraging these costs over time will actually help save money in the long run.