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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

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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.

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