With news of the Canadian economy shedding 71,000 full-time jobs in December and unemployment increasing to 6.6 per cent, 2009 is shaping up to be a bleak year for businesses.
But the news isn’t all bad, according to Patrick Sullivan, president of online job board Workopolis.
With a tight economy driving layoffs and reducing competition for talent, there is an opportunity for HR professionals to build a stable of high-quality employees, said Sullivan.
“There are still opportunities for HR professionals to take advantage of this downturn,” he said. “It really is a chance for an employer to find some of those ‘A’ players. Particularly in a tough time, you need to have ‘A’ players on your team to make sure that the organization continues to do well.”
Despite predictions of the worst United States recession in decades, a survey of Canadian economists and portfolio managers foresees a milder downturn for the Canadian economy.
The Watson Wyatt 28th Annual Survey of Economic Expectations predicts GDP growth in Canada to hover around zero per cent this year and the unemployment rate will rise to seven per cent, but remain far below the historical highs of more than 10 per cent in the early 1980s and 1990s.
Even amongst the job losses in December, Workopolis had 55,000 job postings on the site, said Sullivan.
“There are employers who are looking for great employees and I think that will continue to be the case going forward,” he said.
There is still demand on Workopolis for most health-care jobs, including nurses, aid workers and IT workers.
“They are continuing to build long-term care homes and the hospitals are getting ready for the baby boomers who will start to impact that sector,” said Sullivan.
He is also seeing an increase in postings in the finance sector, particularly in accounting, and a demand for IT workers, especially developers and IT support. There is also a growing demand for environment- and energy-related jobs, despite declines in the price of oil.
But there are definitely sectors showing declines. Besides the obvious manufacturing sector, especially auto, Sullivan has seen declines in tourism, most likely due to the high Canadian dollar and the recession in the U.S. The high dollar has also led to a decline in many natural resources jobs, he said.
Recent numbers for Statistics Canada show the hot Western markets are cooling, with Alberta posting a decline of 16,000 jobs, all full time, the highest job losses of any province in December. But Alberta’s unemployment rate of 4.1 per cent remains the lowest in the country.
“There’s still great demand in those markets. They may be moved from full time to contract and from contract to part time, but we will still see some growth,” said Sullivan.
But the situation is likely to get worse before it gets better, according to another survey by Watson Wyatt. The November poll of 138 Canadian companies from various sectors found 44 per cent of respondents plan to lay off workers.
“For some industries, where sustainability is highly questionable, layoffs are still very much, unfortunately, a viable solution,” said Liz Wright, Watson Wyatt compensation practice leader for central Canada.
The survey also found 42 per cent of respondents will be reducing salary increases, going from an originally planned average increase of 3.3 per cent to just two per cent. Nearly as many (41 per cent) have already stopped or will freeze new hires.
Manufacturing, financial and professional services were the sectors most likely to report a plan to reduce salary budgets for 2009, said Wright.
When the economy is booming, there’s a high demand for professional services firms, but when the economy is struggling, that demand dries up. But these firms know laying off staff isn’t the answer, said Wright.
“They will need these people at the other end of the cycle when it goes up,” she said. So the firms are looking to make strategic reductions, including cutting travel costs and reducing tuition reimbursements.
Just like Sullivan at Workopolis, Wright reports no major cutbacks in health care, as well as pharmaceuticals and mining, oil and gas.
There are other ways to weather this economic downturn besides layoffs, hiring freezes and salary increase reductions, said Wright. They include improving communication with employees to engage them in the organization’s strategy and reviewing total rewards offerings to ensure the organization is spending money on what employees value, she said.
The survey found nearly one-third (30 per cent) of organizations have already or will review their total rewards strategy.
“All those things have to be constantly revisited to make sure the alignments are there, both from an employee as well as an employer’s standpoint. So that was great to see,” said Wright.
In the next few years, the baby boomers will begin retiring in record numbers and there still aren’t enough younger workers to take their place. That means employers will soon be fighting over talent once again, said Sullivan.
“If it’s an employer’s market for now, it will only be an employer’s market very briefly, so take advantage now,” he said.
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