Every Canadian has heard of the “Great Resignation” by now. In early 2021, the United States saw resignation rates soar. Employees began voluntarily quitting their jobs, citing a host of reasons ranging from wage stagnation to limited opportunities for career advancement. The trend became so prevalent that some economists began comparing it to a general strike and it earned a moniker; the “Great Resignation.” And so, as with many things from our neighbours to the south, the term made its way to Canada, and we began using it to describe our own tight labour market. But did Canada actually experience the “Great Resignation”?
The myth of Canada’s “Great Resignation”
It’s difficult to compare Canada’s labour market to the U.S.’ given that they are measured differently. However, Statistics Canada reports that the number of Canadians leaving their jobs in February 2022 was lower than in February 2020. While our American counterparts were switching jobs and industries at elevated levels, Canadians were surprising economists by returning to our normal rate of change when the pandemic began to lessen. In fact, labour force participation is high, and levels of self-employment are unusually low. So, with all due respect Kim K., Canadians actually do want to work.
At the same time, the labour market in Canada is tight. Very tight. The current unemployment-to-job-vacancy ratio is at a historic low in every province, meaning that there is a historically low number of workers available to fill open positions. And the cause of this is something we have known was coming for the last 65 years.
From 1946 to 1964, many countries around the world, particularly Canada, saw a significant increase in fertility rates. Dubbed “the baby boomers,” this generation is an outlier bubble in the population pyramid that has been making its way to the top for the past 77 years. This labour shortage is the first widespread signal that it’s there.
Right now, Canada is seeing our history’s largest mass retirement as increasing numbers of boomers are retiring from the job market. Because they are a population bubble, we simply do not have enough workers in Canada to fill these positions. This has and will continue to cause a tighter labour market than these generations have seen.
So, are you ready for the talent war?
We’ve seen a significant increase in clients who are coming to us at a loss for how to attract and retain the talent they need to operate. The good news is that there are some options out there. If you’re an employer who is struggling to attract and retain talent, here’s what you should be thinking about:
Make sure your offerings are competitive. Employees are expecting more from their employers as conversations around wage stagnation, flexibility, inflation, and financial disparity have become mainstream. If these offerings are not able to compete within peers, there is little else that can be done to attract talent.
Create a tangible and measurable (diversity, equity and inclusion) DEI strategy. Millennials and “Gen Z” are taking over the workforce and are the most purpose-driven generations we’ve ever seen. Not only do they want to align themselves with companies and brands whose values match their own, but they need to see that these companies are taking tangible steps, not just talking about DEI.
Establish an employer brand narrative. If you already have one, have it revisited and updated to speak to the new labour landscape. An employer brand narrative will ensure that you are clearly and effectively communicating with your audiences about what you can offer. This also ensures that prospective employees know exactly what to expect when they sign on with you, helping to cut down on early-stage turnover.
Shore up your social presence. Companies are now speaking to an audience of early tech adopters who go to social media first for information. When they go to your website, social channels, and Glassdoor, what will they learn about you? Does it align with what you are telling them?
With 2023 bringing a potential recession, there is speculation that this could help lessen the impacts of a tight labour market on employers, but don’t hold your breath. We’ve never gone into a recession with a labour market this tight, nor have we had a labour market that is tightening based not on the markets but on the labour supply available due to a historic wave of retirements. While we can expect the unemployment rate to increase somewhat, it isn’t a guarantee that a recession will get us back to pre-pandemic numbers.
For the first time in recent memory, the responsibility has been flipped on the employer to show what they offer the employee. Remaining competitive in this labour market is not an impossible challenge. It’s an opportunity to update your employer value proposition and authentically communicate that to your next generation of talent.