A study by The Business Development Bank of Canada found more than half of Canadian entrepreneurs are struggling to hire the workers they need. According to surveyed entrepreneurs, the struggle to hire is mostly attributed to a lack of candidates (45%) and a lack of required hard or soft skills (44%).
According to the study, How to Adapt to the Labour Shortage Situation: Hiring Difficulties Are Not Going Away, released today by BDC, 64% of entrepreneurs report that labour shortage limits their growth, 55% of small and medium-sized businesses find it difficult to hire, 49% must increase wages and benefits, and 44% have delayed or are unable to deliver orders to clients. A media release explained the study was based on a survey of 1,251 Canadian entrepreneurs and on a survey of 3,000 Canadians on their jobs. It found two in three of small and medium businesses have lost business opportunities due to a lack of workers.
The shortage is most acute in Quebec and for rural businesses but affects all provinces and regions. Suggested solution including adopting new technologies, using a formal hiring process, and offering a total compensation package. The arts, entertainment and recreation sector is having more difficulty than others to retain workers, followed by agriculture.
"As the economy recovers, this scarcity of workers is reaching worrying heights, putting economic growth at risk and compromising the competitiveness of Canadian businesses," says Pierre Cléroux, Vice President, Research and Chief Economist at BDC. "Fortunately, while labour shortage is here to stay, entrepreneurs can take key actions to limit the impact of this situation on their growth."
"Canada's labour shortage has been a challenge for a decade due to an aging population, but the COVID-19 pandemic accentuated it. Entrepreneurs will need to spend more time hiring and retaining workers than they did before. "This underscores the importance for entrepreneurs to adopt new solutions to sustain their growth and productivity in the long run, and automation should be top of mind," Cléroux said.
The study reports that companies that have automated certain areas of the business are 2 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. And yet, only one in four Canadian SMEs have fully automated one or more functions of their business.
Other study highlights:
-Wanting higher wages (57%) is by far the main reason why workers will choose to change jobs in the next year, followed by a desire for more benefits (32%). -20% of workers who lost their job during the pandemic changed fields of employment -Entrepreneurs invited to build the way forward for Small Business Week, October 17-23, 2021
This report is published at: https://www.bdc.ca/en/small-business-week