Short Staffed-it’s a Wage Shortage, Not a Labour Shortage

Talk to any employer; the only complaint is that they cannot find staff. 

With help-wanted signs dotting the landscape, it certainly doesn’t look like the labor shortage
problem is going anywhere. 

So where did all the workers go, and what can employers do about the shortages they face? 

According to a new report from the CCPA-there isn’t so much a labour shortage as there is a
wage shortage. One of the critical reasons for workers not taking jobs is that the jobs
themselves are lousy.

According to David MacDonald, a senior economist with the CCPA.

“One of the key ways that a job is lousy is that the pay is too low. Given the disruption in work
experienced earlier in the pandemic, followed by sky-high inflation, expecting 10 people to
apply for a 15$/hr job isn’t realistic.”

Case in point-63% of, job postings are in industries where the wage offered by employers is
below the minimum wage that unemployed workers are looking for, according to the February
and March 2022 Labour Force Survey and the Job Vacancy and Wage Survey from Statistics

Particular Industries hit the Hardest

Salary offers in the food services and retail industries are not living up to what workers want.

Of all the current vacant jobs, 14% are within the accommodation and food services industry.
The average posting offers $15.85 per hour, but workers aren’t willing to work for less than
$18.84 per hour.

Retail which represents 10% of all vacant job postings- are advertising jobs that pay $17.85 per
, but workers want 23$ per hour.

“These industries aren’t suffering from worker shortages; they are suffering from employers
who are unwilling to increase wages enough to make it worth a worker’s while,” says

How Are Employers Reacting

In response, more than half of Canadian employers are turning to more significant than average
wage increases, according to a report from the Bank of Canada.

According to a recent Mercer report, wages in 2023 are predicted to increase by 3.4%.

Inflation is part of the reason but isn’t always a top metric for determining compensation
strategies. Still, as this is a high-inflation environment, 34% of organizations are
considering ad-hoc, off-cycle wage reviews or adjustments to help combat turnover.

The wage shortage is also impacting those who are already employed. For those considering
changing jobs in the next 6 months…

88% say compensation is the most critical factor, according to a recent ADP survey.

According to another study, more than one-third (36 percent) will look for a new job with
higher pay if they don’t get a raise at the end of this year.

Workplace Culture matters-now more than ever

Compensation is not the only consideration for employers to attract and retain employees.

Consider that a recent MIT Study found that workplace culture impacted retention more than

“Closed emergency rooms and backlogged surgeries are testaments to the fact that attracting
workers, particularly highly skilled nurses, is incredibly difficult right now. Job conditions are a
significant part of the equation for these workers”

Offer more and not just compensation.

Four out of five Canadian employers say they would consider hiring applicants who do not have
a degree or certification for the job they’re applying for and that they would instead offer on-
the-job training for new hires, according to a survey of 1,000 employers from Indeed.

Try looking for other ways to increase the total package you offer candidates, especially if you
are restricted in matching the highest base rate pay in your industry- Think of the increased time
off-benefit packages, special offers through partnerships, opportunities for growth and

Bottom line-compensation is extremely important in attracting and retaining your employees,
but so is having a great culture, opportunities for career growth, and work-life balance.

If you have a difficult hire in the future or are planning your recruiting strategy, we can help! Let’s Chat.