It’s not just immigration

The labor shortage is hitting everywhere and the solution would come fromimmigration, it seems. According to the Canadian Federation of Independent Business, two-thirds of SMEs struggle to recruit employees, and more than a quarter are forced to refuse sales or contracts. According to the Manufacturiers et Exportateurs du Québec (MEQ), the labor shortage affects 98.5% of goods manufacturing companies. According to the Business Development Bank of Canada, 55% of Canadian businesses (60% of Quebec businesses) have difficulty hiring.

MEQ is therefore calling for a series of measures from the Quebec government, starting with an increase in the economic and temporary immigration thresholds, accompanied by a reduction in the processing times for files. “There isn’t a company that hasn’t told me about immigration. It’s a must, ”said Véronique Proulx, CEO of MEQ. As for the contribution of these companies to the alleviation of the problem …

Statistics Canada puts the number of job vacancies in Canada at 731,905 at the end of the second quarter of 2021. This number reached 194,145 in Quebec, against 126,730 at the end of 2019. In addition, the federal agency also measured a rate of unemployment of 7.1% in August. When this rate is adjusted to include people who wanted a job but did not look for one, it rises to 9.1%.

These employment statistics in August also point to a labor underutilization rate that remains at a higher level than before the pandemic. Thus, compared to February 2020, there were still a greater number of people looking for work (+288,000; + 27.7%), a greater number of people in employment, but who worked less than half of their usual hours (+243,000; + 29.9%), and more people who wanted a job but did not look for one (+68,000; +17.2 %). Not to mention the problem of long-term unemployment: the number of people concerned stood at 394,000 in August, a higher number of 215,000 (or 120%) compared to February 2020.

In his study summary published on September 21, the Institut du Québec (IdQ) pointed out that “the vacancy rate in Quebec – a good indicator of unmet labor demand – has increased by 1.5 percentage points to stand at 5.3% ”between the second quarters of 2019 and 2021, an increase which is explained both by the increase in the number of vacant positions and the decrease in salaried employment. A “pandemic” effect was thus juxtaposed with the prepandemic vigor of the Quebec economy, which is not unrelated to the appearance of this shortage.

Thus, federal government income support programs, issues related to automation, training, labor mobility and institutional barriers, or wages and the work environment could be elements to consider before resorting to mass immigration.

It is true that the labor market is very tight, the scarcity being more striking in certain sectors. “With 1.5 unemployed per vacant position, the Quebec labor market remains extremely tight,” concludes the IdQ. “In health care and social assistance, this ratio stands at 0.2, which means that there are significantly fewer people available for work than there are open positions. The manufacturing (0.8) and construction (1.1) sectors also have fewer unemployed people per job vacancy than the Quebec average.

Several components to consider

But the answer is multi-faceted. It is based first of all on the arrival of new participants in the labor market, in particular new graduates. Added to this is the contribution of so-called qualified immigration, resulting from a more selective and targeted approach as opposed to resorting to volume. In addition, there are initiatives aimed at slowing the decline in the rate of participation in the labor market. And investment in technological innovation and productivity.

Above all, since the majority of vacant positions to be filled require little or no specialization or a graduate degree, increasing remuneration and improving working conditions become an essential part of the equation. If only to mitigate the effect of an average turnover rate of 24.4% in Quebec businesses. The IdQ also observes “a certain acceleration in the growth of hourly wages offered on average in all vacant positions. The latter increased by 9.8% from the second quarter of 2019 to the second quarter of 2021, ”the average offered hourly wage stood at $ 21.80.

According to the salary forecast survey conducted for the consulting firm Willis Towers Watson, the salary increases planned for next year would compare to those before the pandemic. Respondents forecast average increases of 2.7% for executives, managers, professionals and support staff in 2022, up from 2.3% this year. Production and manual labor personnel can expect average increases of 2.6% in 2022, compared to 2.2% this year.

It remains to be seen whether these projections will pass the test of rising labor demand in the face of a shortage of hourly paid workers in an inflationary environment.

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