Photo Credit: Jonny Gios (Via Unsplash)
Labour shortages were prevalent in Atlantic Canada before COVID-19, according to a report published by the ”Atlantic Provinces Economic Council” in January 2022. In addition, COVID-19 wreaked havoc on Atlantic Canada’s labour sector, with employment dropping 15% in two months and work hours dropping even rapidly. Even though employment growth has risen, other sectors, such as tourism and several travel-related industries, are still behind.
What are the reasons for the labour shortages in this region?
The root cause of Atlantic Canada’s labour shortages is demographics, as very few people are entering the workforce compared to those retiring. Demographics show that population growth is sluggish due to a low birth rate, youth outmigration, and exceptionally low immigration rates, reflecting weaker growth of the labour force. According to the report, in 1990, there were 20 new entrants for every 10 retirees. Now, there are only 7 new entrants for every 10 retirees. This means that there are fewer applicants for each job and more job openings due to retirement and attrition than economic expansion.
Secondly, determinants of supply and demand have changed. As a result, entry-level occupations are difficult to fill due to a scarcity of specialized trades or post-secondary degrees graduates. Also, changing young people’s occupational inclinations may make it harder to recruit a typical workforce. Moreover, international immigrants are inclined to relocate to larger cities or regions with preexisting immigrant communities and settlement assistance programs. Currently, the demand for business, finance, and science workers has increased. In contrast, demand in construction and manufacturing has remained flat or decreased. Overall, technological advancements have raised the economy’s competitiveness in all occupations.
Furthermore, regional macroeconomic factors are playing a significant role in this regard. It denotes lower living costs, or more room may not compensate for lower pay. Besides, other characteristics that improve quality of life (e.g., reduced traffic, temperature, and education) may not be enough to substitute for low pay.
What are the major impacts of COVID-19?
The report shows when the epidemic is over, about 35% of employees in the region want to work mainly from home, which means firms are looking to recruit and retain workers in a competitive labour market. However, long-term unemployment might cause people to lose skills or leave the workforce. Education disruptions may have a long-term negative influence on the skilled labour supply during the pandemic. By the time, e-commerce has grown in popularity, reducing demand for brick-and-mortar retailers but rising demands for distribution and delivery employment.
What are the significant implications of labour shortages?
Labour shortages can have immediate, diverse, and long-term repercussions on enterprises, limiting output and rising costs. The region’s economic expansion and progress will be hampered by labour shortages. Some practical steps to resolve it is – increased labour supply, automation to lower labour demand, and methods to attain labour market balance.
What can be done to resolve the issue?
The labour shortage in Atlantic Canada will not go away anytime soon. These labour pressures are expected to persist for the next two decades.
Strategies for Employers
• Initially, employers can raise pay, although pay must be competitive.
• Training and development possibilities, both internal and through partnerships with colleges and universities, can be used to overcome skills gaps.
• Automation can help reduce the number of personnel needed in positions that are difficult to fill.
• To recruit and retain new employees, including women, Indigenous peoples, immigrants, disabled people, and people of colour, organizations must develop a cooperative atmosphere.
Major Government Policies
• Improved labour market data is needed so that individuals, businesses, and training institutions may make smarter career, HR, and program decisions.
• Proper education systems to ensure that essential abilities are acquired. Regarding the issue, institutions of higher education and training that are responsive to the market need to ensure that graduates have the skills that are in demand.
• Improving family and childcare policies, establishing accessible workplaces and procedures, and focused engagement and training programs to reduce obstacles to participation for women, people with disabilities, and Indigenous peoples.
• Rather than focusing on the number of jobs produced, assistance for investment and upgrading should be focused on economic development, promoting digitalization and automation.
On one side, there is an unemployment issue. On the other hand, the economy is facing the problem of labour shortage due to the lack of required skilled workers. So, employers and governments must begin to respond to this new reality by reconsidering how they acquire and retain employees and the efficiency of their labour market regulations. Employers have to rethink their efficiency in business plans to ensure that they can afford higher wages. Furthermore, governments must ensure that their fiscal and regulatory environments encourage businesses to invest in new technology while attracting and retaining workers. Hence, instead of focusing on the traditional issue of finding jobs for workers, the focus should shift to finding workers for jobs.