Are low wage hikes leading to record-high job vacancies?

Canada had more vacant positions than ever in the second quarter of this year.

Across all sectors, employers were actively seeking to fill nearly one million (997,000) vacant positions, the highest quarterly number on record, according to Statistics Canada (StatCan).

That was up 4.7 per cent (45,000) from the first quarter and 42.3 per cent (296,500) higher than in the second quarter of 2021.

Read more: Continuing declines with August job numbers

The job vacancy rate was also at an all-time high of 5.7 per cent in the second quarter.

Employers continued to face significant hiring challenges during the second quarter, with 44 newly hired employees for every 100 vacancies. In comparison, there were 113 new hires for every 100 vacancies in the second quarter of 2016 (not seasonally adjusted), says Ottawa.

Wages not keeping up

The Consumer Price Index (CPI) increased 7.5 per cent in the second quarter, compared with the second quarter of 2021.

However, the average offered hourly wage increased 5.3 per cent to $24.05 year-over-year in the second quarter, while the average hourly wages of all employees rose 4.1 per cent.

And 82.9 per cent of the total vacancies were in sectors that had offered wage growth on par with or below the CPI in the second quarter, says Statistics Canada.

“The record-high number of job vacancies in recent months has focused attention on the extent to which unmet labour demand was associated with higher wages,” says Ottawa.

Read more: Do we have a wage shortage, not a worker shortage?

Among sectors, the growth in offered hourly wage was above the CPI in:

• professional, scientific and technical services (11.3 per cent)
• management of companies and enterprises (10.7 per cent)
• wholesale trade (10.6 per cent)
• mining, quarrying and oil and gas extraction (8.2 per cent)
• transportation and warehousing (7.8 per cent)

The increase was at par with the CPI in the manufacturing sector. However, it was below the average in the rest of the sectors:

• accommodation and food services (7.4 per cent)
• utilities (6.8 per cent)
• other services (except public administration) (6.3 per cent)
• agriculture, forestry, fishing and hunting (6.2 per cent)
• information and cultural industries (6.2 per cent)
• admin. And support, waste management and remediation services (6.0 per cent)
• retail trade (5.7 per cent)
• public administration (5.5 per cent)
• construction (5.2 per cent)
• health care and social assistance (3.6 per cent)

Read more: One in five workers will switch jobs within a year

“Talented employees know what they’re worth. If your company isn’t offering a competitive salary, you won’t be able to attract the top talent that your company wants. There are only so many top employees out there. If your company isn’t willing to offer these stellar candidates what they’re worth, then your competition will,” says MatcHR.