The ongoing labour shortage that continues to plague Canadian companies big and small is also limiting their growth, a new study suggests.
According to a recent study released by the BDC, more than half of Canadian small and medium-sized business entrepreneurs surveyed are struggling to hire new employees — resulting in increased working longer hours, delaying in shipping or the outright cancellation of new orders.
The study, called How to Adapt to the Labour Shortage Situation: Hiring Difficulties Are Not Going Away, is based on a survey of 1,251 Canadian entrepreneurs and on another survey of 3,000 Canadians regarding their employment.
It suggests that nearly two-thirds of small or medium-sized entrepreneurs have lost business opportunities because of the lack of workers.
“As the economy recovers, this scarcity of workers is reaching worrying heights, putting economic growth at risk and compromising the competitiveness of Canadian businesses,” Pierre Cléroux, vice-president of research and chief economist at BDC, said in a press release.
The study found that 64 per cent of entrepreneurs feel the labour shortage is limiting their growth and that 61 per cent of entrepreneurs surveyed feel they must increase their hours or their employees’ hours due to the labour scarcity.
It also suggests that nearly half of those surveyed believe they will need to increase wages and or benefits in order to hire people while 44 per cent said they’ve had to delay or are unable to deliver orders to clients as a result of the shortage.
The BDC says the labour shortage has been ongoing for a decade due to Canada’s aging population and that the pandemic has further accentuated it.
“While the labour shortage is here to stay, entrepreneurs can take key actions to limit the impact of this situation on their growth,” Cléroux said.
Those actions include increased automation in order to offset the labour shortage, offering better or a “total” compensation package to employees and using a formal hiring process.
According to the BDC’s study, businesses that move towards more automation are two times more likely to find hiring easy and 1.9 times more likely to see sales growth above the industry average, versus companies that haven’t.
“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.
However, only one in four Canadian small and medium-sized businesses have fully automated one or more functions of their business, the study claims.
The BDC’s study also says that 20 per cent of workers who lost their job during the pandemic, ended up changing their field employment entirely and that increased wages are “the main reason why workers will choose to change jobs” in the next year.
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