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Future of Work

A curated resource of recent research on trends shaping Canada's labor market.

Empty seats: Why labour shortages plague small and medium-sized businesses and what to do about it

Key Takeaway
Canadian businesses have sought short-term solutions to labour shortages—but several tactics are required.


This research explores the fundamental dynamics of labour shortages in Canada and proposes strategies to mitigate them.

Small and medium-sized enterprises, in particular, grapple with labour shortages, given their relatively constrained financial and human resources. Factors such as wage-level disparities, lack of qualifications, skill mismatches, job market dynamics, and Canadian demographics continue to contribute to post-pandemic labour shortages.

The authors highlight that Canadian businesses have tended to look for low-cost, short-term solutions, resisting calls for higher wages, better benefits, investment in productivity-enhancing technology, and comprehensive training.

Ultimately, several tactics are required to address labour shortages, including the adoption of higher wages, human resource practices geared toward recruitment and retention, better integration of immigrants, government partnerships, and technological adoption.

October, 2023 | Griffiths, J., Lane, J.
Key Takeaway: Poor communication between the main players in Canada’s labour market is causing mismatches between the skills that businesses need and the skills that workers have. A competency-based system could be the solution.
November, 2023 | Li, V., Hamza, M., Kwok, T
Key Takeaway: The rise of remote work has boosted demand for the basic digital skills that are needed for many jobs in the modern workforce. AI and the increasing use of big data will increase employers’ demands for digital know-how.
November, 2023 | Mahboubi, P., Zhang, T.
Key Takeaway: Canadian businesses have sought short-term solutions to labour shortages—but several tactics are required.
October, 2023 | Immigration, Refugees and Citizenship Canada (IRCC)
Key Takeaway: IRCC’s new whole-of-government strategy to reshape Canada’s immigration system creates a more welcoming experience, aligns with labour market needs, and includes developing a growth plan.
October, 2023 | Dennler, K.
Key Takeaway: Canada has seen a significant rise in the number of immigrants choosing to leave the country, signaling a growing issue with long-term immigrant retention
November, 2023 | Picot, G., Crossman, E., Hou, F.
Key Takeaway: Immigrants who arrive through Canada’s Provincial Nominee Program (PNP) are less likely to remain in Canada—but those who do stay are more likely to remain in the province they originally settled in.
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