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Shortage of Manpower and Possible Solutions

December 13, 2018

The labor shortage is rife in Canada and Quebec. According to Statistics Canada, in 2017, the number of vacancies jumped by 23% in the country and by 46% in Quebec.

 

Indeed, the unemployment rate in Quebec is at its lowest since 1976 and businesses have difficulty filling vacant positions. Quebec, with 4.1% of vacant positions in SMEs, or 117,000 jobs, is experiencing the largest lack of manpower in the country.
This shortage of labor leads to low economic growth even if the unemployment rate is at its lowest.

 

The main causes of the labor shortage:

 

  • The population is ageing

 

The Montreal Economic Institute found that the number of Quebecers under 45 fell significantly between 1981 and 2010. According to the Quebec Institute of Statistics, the population aged 15 to 64 will increase from 5,531,000 in 2017 to 5,428,000 in 2030, an average annual decrease of 0.1%. The demographic weight of this segment of the population will increase from 65.9% to 59.4%. The labor force increases on average by only a few thousand people a year.

 

It is already apparent that the reversal of the age pyramid results in a stagnation of the growth of the active population, a rise in activity and employment rates and a fall in the unemployment rate.

 

  • The retirement of baby boomers

 

According to the Institut de la Statistique du Québec, hundreds of thousands of jobs will be filled by 2025 to replace the massive retirements of baby boomers. Moreover, in Quebec, workers retire earlier than elsewhere (29% of people between the ages of 60 and 64 work in Quebec, while the rate is 42% in Ontario and 47% in the United States).

 

  • The devitalization of remote areas of major urban centers 

 

It is particularly difficult for these regions to retain young workers or to attract immigrants. In these regions, no less than 55% of the positions are vacant.

 

Some factors aggravate the problems of availability of the workforce, for example:

 

  • The difficulty of matching the profile of jobseekers with the occupations in demand.

  • The complexity of accessing the education system and training programs, particularly for immigrants.

  • The lack of information and valuation, especially among young people in the trades in demand, especially those who require unskilled labor (9 out of 10 positions to fill in SMEs in Quebec).

  • Lack of interest in certain professions, often due to working conditions, or the low level of income offered by companies.

The consequences of the labor shortage :

 

The labor shortage has major consequences for companies, which force them to postpone investment projects, makes them lose contracts, slow down or cease their activities.

 

In Quebec, nearly one out of two businesses (47%) lose contracts or sales because they do not have enough employees, and 42% have to cancel some of their investments because of their lack of staff.

 

Other consequences for companies :
 
  • Loss of productivity.

  • Increased delivery times.

  • High employee turnover rate.

  • Increased costs related to staff training (hiring unskilled people, the company will have to train completely).

  • An increase in wages (due to the increase in overtime).

  • Companies have to show more flexibility (set up telework for example).

  • Companies will need to put in place innovative solutions to retain and attract their workforce.

 

No economic sector is spared, but some are more affected than others.

 

The proportion of vacancies is particularly important in the tourism sector. For example, hotels operate at 50% of capacity because there is not enough staff, and more and more restaurants are closing earlier than usual due to lack of staff.

 

After the United States and France, Canada's annual demand for aerospace labor is strongest. By 2025, Quebec will need only 16,800 workers to replace retirements and meet the demand in this sector.

 

The manufacturing, sales and service, and construction sectors are also seriously affected by the lack of manpower. Like other sectors, such as transportation, machinery, administrative and financial services.

 

The solutions envisaged to counter the shortage of manpower

 

The solutions are numerous, but to be more effective, they will certainly have to be combined. However, there is no quick fix. Each company will have to find the best solution according to its context and its reality.

 

Here are some possible solutions:

 
The inclusion of people with disabilities


In Quebec, people with disabilities have the most difficulty integrating the labor market, with an activity rate of 44.6%.

 

However, promoting the inclusion of all, regardless of individual conditions, requires a little redevelopment. A person with a disability could do important work for the company. In fact, a person with a disability does not only contribute to a workforce, but also brings a different perspective on the various tasks that a person without limitations.

 

Being sensitive to the particular situation of the person living with a limitation makes it possible to adapt the integration period, the tasks and the work environment. Thus, in a work context adapted to their situation, people with a disability will be able to succeed as well, and sometimes even better, than a person without limitations.

 

The inclusion of immigrants


Businesses need to improve the integration of immigrants on their premises,  whose unemployment rate remains higher than average. Out of ten people who arrive in Quebec, six are economic immigrants and the majority are young.

 

Automation of tasks

 

Implementing automation or mechanization processes will enable companies to optimize their production process.

 

Thus, in its factories, skilled labor becomes less and less necessary, as robots and artificial intelligence can give more and more precise instructions to employees. The company can then assign manual tasks to employees who do not have technical training.

 

Optimize operations

 

In order to be able to make the best use of its human, financial and technical resources, companies will be able to lighten their processes and rethink the organization of their tasks and eliminate sources of waste.

 

The use of older workers

 

In Quebec, the employment rate for the 55 to 74 age group was 41.4% in 2016.


To encourage some older employees to return to or remain in the labor market, companies may set up phased retirement programs, financial incentives (eg more competitive taxation) or offer shorter work weeks ( three days). In fact, a 55 year old person has at least 10 years of work to offer.

 

The expertise of these experienced workers is vital to the company. By promoting the transfer of knowledge from the more experienced to the next generation through mentoring, it becomes possible to increase productivity by reducing learning time and improving retention of the workforce. better integration of young people.

 

Employee training

 

The company can limit the shortage of skilled labor by constantly training employees directly within its organization so they can better utilize new technologies.

 

 

Retention of employees

 

The labor shortage context is beneficial for employees because it gives them the opportunity to change jobs easily. Companies will need to know how to attract and retain their workforce by offering them better working conditions, better wages and benefits.

 

  • Fostering employee well-being is key to a work environment that retains employees. Having a good business reputation has many benefits, both in retaining current staff and attracting future employees.

  • Involve employees in their tasks by introducing a wage policy that reduces the need to supervise workers to achieve production goals. (pay part of the employees based on the number of pieces they produce, for example)

  • Reduce the routine by giving workers a greater variety of tasks based on the skills and specialization of each. As a result, employees will be more involved in overall production and more motivated.

  • Diversify recruitment pools: explore new basins: new geographical areas (some municipalities have introduced tax incentives to attract more workers), new skill profiles, etc.

  • Re-evaluate the criteria for selecting employees: reduce the number of selection criteria and be less demanding. The company must ask itself if all of its selection criteria are relevant and keep only the main ones.

  • Introduce new management practices by enabling teleworking or creating satellite offices or by being more flexible with working hours. This will allow the company to recruit into new pools and increase the sense of belonging of its employees.

 

Rethinking workspaces

 

With the goal of fostering employee recognition, respect and relationships with the company to achieve sustainable results, companies will be able to rethink their workspaces. Their facilities will have to meet the needs of their employees. Investing in the happiness of employees is beneficial to the employer (less absenteeism, delay, sick leave, etc.).

 

Establish unassigned workspaces so employees can change workplaces several times a day, which helps a lot in productivity. Employees feel that they have several options and that they are not confined to a strict space.

 

Set up a multitude of services promoting employee wellbeing. For example, Shopify has set up, in its large offices in downtown Ottawa (whose architecture was chosen to be linked to the diversity of its employees), several services for its employees such as: training for professional and personal development, playgrounds, state-of-the-art coffee machines, free lunches, yoga and kick-boxing classes, meditation rooms, etc.

 

If, as an entrepreneur, you are thinking of redeveloping your offices to combat the current labor shortage in the country, call Lib., the specialist in workspace design in Montreal. Their team of professionals will be happy to advise you!

 

 

 

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