The ninth annual Hays Canada Salary Guide, released today, finds that employers across Canada will cap 2018 as a year of growth, with more than half intending to hire permanent staff in the year ahead.
Sixty-three per cent expect the booming economy to add to their bottom line, but fewer than a quarter plan to give salary raises greater than 3%. Employers have chosen instead to boost salary offers to entice new candidates, which Hays says it s "concerning signal that the country's employers are struggling in a tight labour market."
Conducted this past fall, the Guide survey revealed employers had another strong year. Optimism is high and business is thriving as evidenced by the 37% year-over-year increase in the number of companies planning to grow their staff. Conversely, Hays found employers offering raises of anything more than a cost of living increase has hit a five-year low. Yet,61% admit they have hiked salaries to attract candidates, even at the risk of potentially losing current staff. Compounding the issue is the fact that nearly three quarters of employers said a shortage of skilled workers has resulted in heavier employee workloads and heightened stress.
"Despite 2018 success, the negative impact of talent shortages is at its highest point since 2015," says Rowan O'Grady, President of Hays Canada. "From an employer's perspective, the job market is extremely competitive, and without the right people in place, next year's business goals could end up in doubt. So, employers have curtailed spending on existing staff in favour of getting new candidates through the door. The intent may come from a good place, but this is a band-aid solution. Without taking a more holistic view of staffing or having smart support and advice, further workforce problems are all but inevitable."
New data suggests that last year's erroneous forecasting and what was thought to be an unwillingness to commit to long-term staff has since given way to prudent 2019 business planning. When asked, employers said they expect to take on contract and temporary staff to address the need for special skills, but permanent hiring remains a priority in IT (45%) and finance (48%) departments.
Many experts acknowledge that employees have the upper hand in the current job market. Hays labour market experts observed a spike in job vacancies in 2018 across sectors. New positions and opportunities are being created each day, leading many to shift roles at an increasing rate. This, coupled with stagnating salaries for current employees, will spark churn as the economy continues to soar.
Encouragingly, employers said they have taken steps to protect their talent assets. Slightly more than half of Hays Salary Guide respondents noted that salary is a retention challenge followed by career progression (42%). In response, 53% are working to make compensation and benefits packages more attractive, while a similar number (50%) promote their working environments and professional development (39%) among current and prospective employees. An ongoing companion study conducted by Hays validates this strategy having demonstrated that employees seek salary alongside training opportunities and rewarding culture.
In Canada's IT sector, demand continues to drastically outpace the supply of skilled candidates. As companies such as Shopify, Uber, and Intel continue to invest in the country, IT employers are engaged in a talent war that is only expected to heat up in 2019. To rise above the fray, IT companies say they are pulling out all the stops.
"Employers use money, and only money, when they have nothing else to offer," says Dinesh Kandanchata, COO at Macadamian. "We strive to be competitive with our salaries but know that we are up against big players that have endless resources. This challenges us to be creative and to break the mold. Money isn't the only thing that gets people in the door. The purpose of a company providing people with meaningful work and a culture they feel passionate about goes a long way."
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