Workforce Obstacles in Manufacturing

Statistics Canada

Employment fell by 200,000 (-1%) in January, and the unemployment rate rose 0.5% to 6.5%. The Consumer Price Index rose 4.8% yearly in December 2021, up from 4.7% in November. Many jurisdictions had implemented stricter public health measures during the fourth quarter of 2021 and continued through the first quarter of 2022 to combat the spread of the Omicron variant of COVID-19. The combination of inflationary pressures, labour challenges, public health measures, and supply chain issues have impacted businesses in various ways.

From January to early February 2022, Statistics Canada conducted the Canadian Survey on Business Conditions. The survey collects information on the environment businesses are currently operating in and their expectations moving forward. Here we present a snapshot of workforce-related issues specifically within manufacturing compared to the Canadian economy in general.

In January, the labor force participation rate dipped, down 0.4% to 65%. Shortage of labour force was expected to be an obstacle over the next three months for 37% of all businesses, with 48.1% of manufacturing companies stating this was a point of concern. In addition, recruiting skilled employees was also expected to be an obstacle for 38.5% of businesses, while retaining skilled employees was expected to be an obstacle for 30.4%. Manufacturing faced the biggest challenge in recruiting qualified employees, with 50.8% of businesses citing this as a concern.

Over 77% of businesses expect to retain the same number of employees over the next three months, similar to the fourth quarter of 2021. Conversely, 8.1% of companies expect their number of employees to decrease, down from 9.7% in the fourth quarter of 2021. Within manufacturing, 37.9% of manufacturing businesses worry about retaining skilled employees.

In terms of vacant positions, 9.3% of businesses expect to have more job vacancies over the next three months. However, 14% of companies in manufacturing expect to have more vacant positions. Just over 60% of businesses indicated having some plans over the next 12 months related to recruitment, retention, and training. Almost 50% of companies plan to increase wages offered to current employees over the next 12 months, with over 50.1% of companies in manufacturing planning to do so. Nearly one-quarter of businesses plan to increase wages offered to new employees (23.7%) or plan to offer flexible scheduling (23.3%). In terms of training, 19.9% of businesses plan to encourage employees to participate in on-the-job training.

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