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Nov 20, 2019
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    Wages seen rising in tight labour market

    By Louise Egan

    OTTAWA (Reuters) - Canadian companies in need of new talent will raise salaries by 3.5 percent next year to attract and keep skilled staff in a tight labour market, according to a survey released on Thursday.

    With the unemployment rate at a 30-year low and a booming oil and gas industry in Western Canada sucking up new blood, many firms are hard-pressed to fill vacant positions.

    The salary increase, based on forecasts of employers surveyed by Watson Wyatt Worldwide, would come on top of a higher-than-expected 3.6 percent average wage hike in the June 2005 to June 2006 period.

    The report is based on responses from 380 private and public sector organizations representing over 1 million employees.

    "We're seeing the beginning of the true supply-demand labour crunch in Canada," said Graham Dodd, Watson Wyatt's managing consultant for Western Canada.

    Dodd said it was very unusual to have strong economic growth bolstering demand for new workers at a time when the labour force supply is shrinking. "The supply and demand lines are very close to crossing," he said.

    Topping employers' short-term agenda is "recruiting key talent," the survey found.

    That job is made more difficult because employee qualifications obtained in one province are often not recognized in another, something that central bank and finance officials have pinpointed as a barrier to productivity.

    Another survey released on Thursday by the Workplace Partners Panel (WPP), an independent group of business and labour leaders, found that over 50 percent of managers and nearly two-thirds of labour leaders described the shortage of skilled labour as a "serious problem."

    A decade ago, only one third of managers and one in five labour leaders agreed with that assertion.

    Although 70 percent of managers believe the answer lies on more training of staff, very few actually carry out the promise.

    The need for retraining is especially apparent in Canada's manufacturing sector, which has laid off 33,000 workers in the past year as businesses hurting from the strong Canadian dollar reorganize themselves to compete better internationally.

    "Canadian firms invest less in formal workplace training and learning than do firms in many developed countries," including the United States, the United Kingdom and Scandinavian countries, according to Shirley Seward, chief executive officer of WPP.

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