Labour mobility barriers have hampered the hiring of skilled workers for small businesses, according to the "Mind the gap: Workforce challenges holding back Canada’s small businesses" analysis published by the Canadian Federation of Independent Business.
These barriers exacerbate the recruitment issues brought on by a lack of job applicants and skills mismatches. Fifty-four percent of small-to-medium enterprises struggled to draw eligible candidates, and 47 percent struggled to reconcile applicants' skillsets with roles' requirements.
Sixty-nine percent reported that the main barrier for them is the shortage of qualiified job candidates in their industries.
"Over four in ten small firms say a shortage of skilled labour is limiting their ability to increase sales or production. Many are struggling not just to find workers, but to find candidates with the right skills, expectations, and qualifications," CFIB director of research Marvin Cruz said in a statement.
The CFIB highlighted provincial licensing and certification barriers that keep employers in rural areas or in sectors with limited candidates from recruiting in other parts of Canada. It urged governments to address labour mobility issues by:
- mutually recognizing regulatory requirements
- permitting licensed professionals to operate within their current training and experience scope as they navigate registration processes in another province or territory
- collaborate with professional colleges and associations on reducing or waiving interprovincial registration fees
- streamline registration processes by legislating a clear professional certification approval timeline, with businesses being compensated if timelines are not met
Labour quality concerns
Fifty-seven percent of small businesses raised a discrepancy between candidates' pay and benefits expectation and companies' offers. Half of small businesses also indicated that they couldn't match large companies' compensation packages.
"There’s a growing disconnect in Canada’s labour market between small business needs and the available workforce. Even when roles are filled, businesses often deal with employees’ poor productivity, lack of motivation, and weak problem-solving skills," said CFIB research analyst Alchad Alegbeh. "Business operations and output are then lacking, while owners are often forced to spend more time training or rehiring workers instead of focusing on running the business."
The CFIB recommended that governments address labour quality issues by:
- implementing tax credits and grants for SMEs investing in employee training and upskilling
- offer wage subsidies or EI premium holidays for SMEs that hire or train new or inexperienced workers
- support collaborations between small businesses and educational institutions to develop apprenticeship and internship programs that address skills gaps
"Since 2021, wage costs have gone up, but productivity has stagnated. By improving our workforce quality and removing labour mobility barriers, we could boost our productivity and strengthen Canada’s economic competitiveness," Cruz said.