This contemporary problem that threatens growth
Stopping at the corner café was pleasant before the shortage…
It is seven o’clock in the morning, I leave for the office. On the way, I choose to make a small detour to get a coffee. I go in to order…but nothing seems to go right. A huge line separates me from the counter. The most disturbing thing is not the wait, but the energy of panic and stress of the employees. The cashier is frantically going back and forth between her station and the kitchen, sometimes even screaming. It’s finally my turn. I order the long-awaited coffee and ask if everything is okay. The cashier, and manager of the café, retorts that her job has become difficult since several experienced employees have left. As a result, she had to recruit two young people under the age of seventeen to take orders out of the kitchen. Recruits that they have to train “on the job”, and who could also go elsewhere for an extra dollar or two an hour. With my beverage in hand and my head full of questions, I go out and wish them luck. This coffee will definitely not leave me indifferent to the situation, both managers and employees.
Current impacts and revealing indicators
Yes, the labour shortage phenomenon1 unfortunately affects all sectors in Quebec. Of course, there is a shortage of doctors and other specialized resources, but there is also a shortage of workers in service occupations such as cashiers, waiters and beneficiary attendants. This is not a one-time or sectoral situation, but a widespread one.
According to a study2 by the Institut de la statistique du Québec, supported by data from Statistics Canada, there are more than 250,000 vacant positions throughout Quebec. The job market is increasingly under pressure. Since 2018, the demand for qualified workers is constantly increasing while the pool of resources is shrinking. A real scourge for the Quebec economy, the lack of personnel is a major barrier to the growth of SMEs in Quebec, particularly in the manufacturing sector, which represents 12.6% of Quebec’s GDP. According to a file3 from Manufacturiers et exportateurs du Québec (M&EQ), many companies are forced to refuse contracts due to the lack of qualified resources. Other entities are more cautious and are delaying or cancelling investments, while waiting to fill the vacant positions. These monetary losses are estimated to have been $7 billion Canadian in the last year. A huge value if we consider inflation and the post-COVID global economic situation.
Other data and facts collected by the STIQ4 business association place the labour shortage at the top of the manufacturing sector’s concerns. For example, shortage problems are the worst in 13 years, according to the same indicator measured by the association over that same number of years.
Fatality or opportunity to innovate? The first elements of the answer are “internal”…
Are Quebec and its economy condemned to suffer the consequences of the shortage? No, and fortunately not. Quebec companies are proactive and are redoubling their creativity to deal with this labor shortage. At the annual STIQ conference on manufacturing issues (November 2022), a panelist stated that several HR strategies have been put in place in her company to address the lack of resources. The main strategy is to invest in employee retention and the quality of the work environment. Offering attractive salaries is no longer enough. You have to provide a developmental environment and stimulating working conditions. Employees no longer come for a paycheck, but for a mission that values them as individuals in the organization. The panelist summed it up well: “We need to take care of the ones we already have and keep them, before we go looking for others”. For many manufacturing SMEs, this awareness is becoming a priority and even an avenue for competitiveness.
Another way to retain employees would be to provide more continuous training to develop new skills internally, instead of systematically looking for the rare pearl. In addition, developing the talents of resources provides a sense of accomplishment and helps create more value. More and more hiring managers are no longer looking to fill positions one by one. They are recruiting individuals who have the skills to meet diverse needs and can cover multiple functions in combination with other employees.
International recruitment, a promising path with its challenges
Another strategy that companies use is to use immigration as a human lever for growth. Canada, and Quebec, are very popular destinations for immigration candidates. By applying here, often qualified candidates seek to improve their situation and the prospects for their families. In this context, an open international recruitment strategy remains a win-win approach for all parties. However, the administrative burden, the length of the process, the lack of resources for linguistic integration, and the pre-established quotas set by the federal government, are elements that slow down the potential momentum. Not to mention that immigrants who settle in the regions often prefer to move to the cities after a few months of integration. This exodus is a phenomenon that extends to the entire population and is not new; on the other hand, many regions are successful in attracting talent from larger centers and elsewhere.
Digital transition to address one of the main triggers: the demographic problem
Looking beyond human capital development and recruitment, how can the labor shortage be effectively addressed? Looking at the Japanese demographics, where the number of septuagenarians is growing and the birth rate is low, the Japanese government has mobilized several types of resources to innovate in order to deal with a systemic labor shortage. Instead of relying on immigration, Japanese companies are using innovation and digital transformation as levers, while valuing the role of humans in the value chain.
We already see automated checkouts (self-service) in most of the provinces, but Japan has gone to a whole new level. In the land of the rising sun, many restaurants no longer hire waiters, the entire process is done in an automated and digitalized way. A collaborative robot accompanies customers as they arrive and assigns them a table. Orders are placed on tablets and the food is transported to the table by conveyor belt. For payment, the customer can scan the empty plates containing RFID (radio frequency identification) chips to generate and pay the bill. This is an example of innovation in the face of scarcity.
This illustration brings us to a very relevant observation for our Canadian and Quebec companies facing a shortage. Many companies, especially manufacturing SMEs, would benefit from optimizing their operations through progressive innovation and digital transformation.
So where do we start to fight the shortage? A plan, yes, but one that makes sense.
In conclusion, the challenge is daunting and may seem dizzying, which brings us to the question posed earlier: is the labor shortage inevitable? Of course, the lack of personnel is a huge brake on growth, but it remains a challenge that we can face by using and combining levers like innovation, digital transformation, HR strategies and immigration. The Quebec economy is based on the people who contribute to it, on the individuals who make up our society: if we value their work, if we offer the right conditions and environments for development, and if we mobilize collective intelligence together, Quebec will do well and remain a leader in the Canadian and global economy.
However, the human factor is not the only contemporary issue: environmental challenges, supply chain problems and respect for communities are also major parameters with which tomorrow’s companies must juggle effectively. That’s why a strong, value-based, global commitment like B Corp certification is so relevant. It serves to guide the company while rallying its employees and partners toward the goal of making a positive impact on many levels. Whether it is a more or less elaborate approach, depending on a company’s means, the important thing is to commit to a collaborative path with the common good at heart. Good luck!
1 Le Devoir | Comprendre la pénurie de main-d’œuvre au Québec, Portrait du phénomène | Août 2022 | https://www.ledevoir.com/interactif/2022-08-23/penurie-maindoeuvre/index.html
2 Institut de la statistique du Québec | Les postes vacants au Québec au 2ᵉ trimestre de 2022 | Septembre 2022 | https://statistique.quebec.ca/fr/document/postes-vacants-au-quebec/publication/postes-vacants-2e-trimestre-2022
3 M&EQ | Pénurie de main-d’œuvre dans le manufacturier : 7 G$ laissés sur la table dans la dernière année | Novembre 2022 | https://meq.ca/2022/11/16/penurie-de-main-doeuvre-dans-le-manufacturier-7g-laisses-sur-la-table-dans-la-derniere-annee/
4 STIQ | Communiqué de presse – 13e édition du Baromètre industriel québécois | Mai 2022 | https://www.stiq.com/2022/05/09/des-pme-delocalisent-leurs-activites-hors-quebec-pour-contrer-la-penurie-de-main-doeuvre-causant-une-perte-nette-pour-leconomie-quebecoise/?utm_medium=email&utm_campaign=HebdoSTIQ%20%2012%20mai%202022&utm_content=HebdoSTIQ%20%2012%20mai%202022+CID_f06b630904fbf5c05784cba9259ed1e6&utm_source=Email%20marketing%20software&utm_term=Des%20PME%20dlocalisent%20leurs%20activits%20hors%20Qubec%20pour%20contrer%20la%20pnurie%20de%20main-duvre%20causant%20une%20perte%20nette%20pour%20lconomie%20qubcoise
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Fabrication et Transformation