Career advice

There is a disconnect in the labour market right now, and it is threatening to take a toll on the economy. At the same time that millions of job openings go unfilled and employers struggle to find the workers they need to run their businesses, millions of workers are frustrated because they cannot get hired.

A recent report found that the US has 11 million job openings and six million unemployed workers available to potentially fill the roles. Canada has hit a record high of roughly one million job vacancies in the second quarter of 2022. This is similar to the US when adjusted for the population difference.

Demographics play a large part in the labour shortage. Populations are aging, and talent pools are decreasing across all economies globally. Within the next two decades, the growth of the working-age population (people between the ages of 15 and 64) is expected to slow in 80 percent of countries worldwide, according to UN population projections.

This means that labour shortages are likely here to stay.

Still, at the same time as a shortage of workers risks slowing the economic recovery from the pandemic, many job seekers find it difficult to secure employment.

So, what is going on?

Some industries lost a great deal of workers during the two years of the COVID-19 pandemic. The hospitality sector in particular, because bars and restaurants were closed and travel was restricted, saw many workers transition to other industries to keep working. When the economy reopened to labour shortage conditions, low-paying or part-time jobs often became much more difficult to fill when workers had more steady and lucrative options.

The pandemic also took its toll on the healthcare industry. The stress and pressure of working through a global health crisis had many workers experiencing burnout and looking to leave the profession. Many experienced healthcare professionals also chose to retire during or after the pandemic. The result of demographics and circumstances has left this sector with an acute shortage of workers for critical positions.

The impact of the aging workforce is also being felt in the skilled trades, long-haul trucking, and construction sectors, to name a few. More seasoned workers are leaving the professions than younger people are available to replace them.

That situation is only becoming more severe. A survey of professionals from earlier this year found that more than a third of new retirees decided to retire earlier than they had planned, and another 30 percent of workers approaching retirement age intend to move up their retirement plans as a response to the coronavirus pandemic.

Skills gap

Another factor standing between companies and the workers they need is a skills gap. The available workers may not have the qualifications for the roles that need to be filled. Of course, that situation is often exacerbated by the trend of employers asking for a long list of credentials that may not be necessary to actually do the job.

This is the practice of companies inflating the requirements they ask for in their job descriptions. These exaggerated qualifications could be a wish list of credentials that a dream candidate for the role might have.

Another reason for this practice is to use inflated requirements as a screening tool to weed out lesser-qualified applicants with an intimidating list of qualifications required.

Applicants do not actually need to have all of those skills and certifications in order to be hired. Research has shown that candidates with just 50 percent of the qualifications listed in a job advertisement have as much chance of being interviewed for the role as applicants with as many as 80-90 percent.

If there is a job available that you know you can do – but on paper, you don't quite have all of the qualifications – apply anyway. Write a resume that shows you understand the role and can be successful at it.

Employers are lowering their demands

A recent employer survey found that the tight labour market is changing how companies hire. The majority of participants surveyed said they were now more open to hiring staff with no on-the-job experience, with 77 percent of them saying that ‘soft’ or interpersonal skills were more important than ‘hard’ technical abilities.

Given the shortage of candidates, more organizations simply want to hire people with basic communication, teamwork, and problem-solving skills, as they know they can train motivated hires in most of the skills necessary to perform the role.

That same survey also found that the vast majority (80 percent) of employers would now consider hiring candidates who don't have a degree or certification related to the job and would offer new hires on-the-job training instead.

Salaries are another consideration

Skyrocketing inflation has raised the cost of living in both Canada and the US in recent months, and workers aren't seeing a commensurate increase in wages. In a tight labour market, employers looking to attract talent from a shrinking pool of available candidates will need to offer competitive salary and benefits packages.

Recent reports from both sides of the border indicate that this has started to happen. Between 40 and 50 percent of employers say that they have begun to increase their salary offers to new hires to attract candidates.

Flexibility is key

Employers are also using other strategies to attract more people into the workforce. Flexible work, hybrid and remote options, and accommodations for health or family challenges can all encourage more people to consider roles they might otherwise have avoided and at least partially offset the economic impact of a declining labour supply.

Here are more essential salary and benefits trends to watch for in 2023.

Want to find your next opportunity in the hot job market? Check out the thousands of positions available right now on Talent.com.