Proven solutions exist to help entrepreneurs with hiring and retention issues but remain underused
- 64% of entrepreneurs report that labour shortage limits their growth
- 55% of small and medium-sized businesses find it difficult to hire.
- 61% of entrepreneurs must increase their hours and/or their employees’ hours due to the labour scarcity
- 49% must increase wages and benefits
- 44% have delayed or are unable to deliver orders to clients
MONTREAL, Sept. 29, 2021 /CNW Telbec/ – More than half (55%) of Canadian entrepreneurs are struggling to hire the workers they need, leaving them working longer hours and delaying or refusing new orders, according to the study, How to Adapt to the Labour Shortage Situation: Hiring Difficulties Are Not Going Away, released today by BDC, the bank for Canadian entrepreneurs.
“As the economy recovers, this scarcity of workers is reaching worrying heights, putting economic growth at risk and compromising the competitiveness of Canadian businesses,” says Pierre Cléroux, Vice President, Research and Chief Economist at BDC. “Fortunately, while labour shortage is here to stay, entrepreneurs can take key actions to limit the impact of this situation on their growth.”
The study, based on a survey of 1,251 Canadian entrepreneurs and on a survey of 3,000 Canadians on their jobs, noted nearly two in three of SMEs have lost business opportunities due to a lack of workers. The shortage is most acute in Quebec and for rural businesses but affects all provinces and regions. The arts, entertainment and recreation sector is having more difficulty than others to retain workers, followed by agriculture.
SMEs must adopt solutions to sustain growth
Canada’s labour shortage has been a challenge for a decade due to an aging population, but the COVID-19 pandemic accentuated it. Entrepreneurs will need to spend more time hiring and retaining workers than they did before. “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.
The study reports that companies that have automated certain areas of the business are 2 times more likely to find hiring easy and 1.9 times more likely to see sales growth above the industry average, compared to companies that had not automated. And yet, only one in four Canadian SMEs have fully automated one or more functions of their business.
Other proven business solutions that can help reduce the impact of labour scarcity include:
- Adopting new technologies
- Using a formal hiring process
- Offering a total compensation package
The economy is now in a cycle where there are more job postings than workers willing to fill those vacancies. According to surveyed entrepreneurs, the struggle to hire is mostly attributed to a lack of candidates (45%) and a lack of required hard or soft skills (44%).
Other study highlights:
- Wanting higher wages (57%) is by far the main reason why workers will choose to change jobs in the next year, followed by a desire for more benefits (32%).
- 20% of workers who lost their job during the pandemic changed fields of employment
Entrepreneurs invited to build the way forward for Small Business Week, October 17-23, 2021
This report is published as part of BDC Small Business Week™ (SBW). Under the theme: “Seizing the opportunity to build the way forward,” Canadian entrepreneurs will have the opportunity to find out more about what’s ahead for Canadian businesses, learn about new growth opportunities and how to make the most of them. SBW is an annual celebration of entrepreneurship that BDC has organized for over 40 years. For more information, visit: https://www.bdc.ca/en/small-business-week
BDC is the bank for Canadian entrepreneurs. It provides access to financing, as well as advisory services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of risk capital solutions. For more than 75 years, BDC’s only purpose has been to support entrepreneurs in all industries and at all stages of growth. For more information and to consult more than 1,000 free tools, articles and entrepreneurs’ stories, visit bdc.ca.
SOURCE Business Development Bank of Canada