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Canada Labour Shortage Driving SMEs To Hire Immigrants

Canadian small and medium businesses are turning to immigrants because Canada’s labour shortage means they cannot find enough new employees to fill vacancies.

A new report reveals the sharp end of Canada’s shrinking labour market and its direct impact on economic growth.

The Business Development Canada study reveals SMEs are hiring younger, unqualified workers for more money to try and plug gaps intended for more senior staff.


How Many Canadian SMEs Are Struggling to Find New Employees?

BDC’s report, entitled ‘Labour Shortage: Worker Scarcity in Canada and What Businesses Can Do to Respond’, found 39 per cent of Canadian SMEs have difficulty hiring new staff.


It urges firms that have no done so already to consider turning to immigrants to access the skills and experience they need.

The bottom line is that businesses who cannot hire qualified staff are 65 per cent more likely to be categorized as ‘low-growth’.

BDC’s report cites the retirement of the baby boomer generation as the key reason for the labour market shortage.


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The bank’s projections suggest there is little relief in sight, with shrinkage to continue for ‘at least the next decade’.

As a result, current employees are being forced to work more hours, businesses are having to raise wages and improve benefits, while many are reporting growth remains limited.


What Is The Impact Of Canada’s Labour Shortage?

Source: BDC


In certain provinces shortages are even more sharp.

Some 50 per cent of Atlantic Canada SMEs say they are having trouble finding new staff, compared to 45 per cent in British Columbia and northern Canada and 40 per cent in Ontario.

Federal and provincial governments are well aware of the problems in Atlantic Canada, introducing the Atlantic Immigration Pilot as a way to tackle the acute shortage.


Which Canadian Provinces Have The Most Acute Labour Shortage?

Source: BDC


The program brought in 2,500 new immigrants in 2017, and expected to see similar numbers arrive in 2018.

Canada’s federal government wants to see the AIP grow to accept 4,000 newcomers per year by 2020.

Meanwhile, the federal government has also made Canada more attractive destination for the most in-demand skilled workers through the Global Talent Stream.

Under GTS, work permits and Canada visas for sought-after technology occupations are processed in just two weeks.


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The stream, which works under the Temporary Foreign Worker Program, has been hailed as a huge success since it was introduced in June 2017.

BDC’s report suggests growing support for the number of occupations covered under GTS to be expanded.

In the meantime, existing employees are being forced to make up the gaps by working more hours and under-qualified workers are being hired for senior positions.


How Are Canada’s SMEs Dealing With Labour Shortages?

  1. Hiring less-qualified workers
  2. Recruiting younger workers
  3. Improving compensation
  4. Increasing hours worked
  5. Improving efficiency
  6. Automating processes

The report offers advice to businesses on ways to find and keep the staff needed to assist growth.

Among them is hiring more immigrants, viewed as a crucial way to tackle Canada’s labour shortages.

Other ways include improving efficiency, using more technology and introducing formal human resources policies.


What Should SMEs Do To Tackle Labour Shortages?

  1. Develop an employee value proposition, defining your company’s vision, values and the reasons people are proud to work for you.
  2. Hire immigrants and workers from other under-used segments.
  3. Improve operational efficiency, automate processes and use more technology.
  4. Formalize your HR policies. Businesses with strong HR policies are 66% more likely to be fast growers, according to our study.

Colin R. Singer: Colin R. Singer is Managing Partner of investmentimmigration.com and immigration.ca and one of Canada’s foremost senior corporate immigration attorneys. He is recognized as an experienced authority on Canadian immigration matters as well as the international residence-by-investment industry through investmentimmigration.com. He is a licensed immigration lawyer in good standing with a Canadian Law Society during the past 25+ years.
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