As labour pool shrinks, top talent will become high-priced free agents

Employers need to build a permanent presence in the job market

Canada’s labour market is being transformed by powerful forces that will create a shortage of up to one million qualified workers in the next decade or two, according to Conference Board of Canada forecasts.

The generation known as baby boomers has begun retiring and will leave a vacuum of skilled workers in the labour force. The Conference Board of Canada, in its publication Hot HR Issues for the Next Two Years, said companies competing for skilled workers are already facing a “war for talent” that will only intensify.

What does this mean for Canadian business? The implications are serious.

Key positions could remain unfilled for longer periods of time as companies seek the right candidate from a shrinking talent pool. Attracting and retaining skilled workers and top talent will grow increasingly difficult as the labour market shifts dramatically from an employer-dominated seller’s market to a candidate-dominated buyer’s market.

A comprehensive study called Future Shortages in the Canadian Labour Market, by People Patterns Consulting, said labour force growth between now and 2010 is expected to slow to about 123,000 people annually and decline further to about 42,200 between 2010 and 2015, finally falling to about zero growth between 2016 and 2024.

While many HR professionals recognize this trend toward a dwindling pool of qualified workers, many expect quick fixes like increased immigration or later retirement will eliminate any labour shortage risks. According to the People Patterns Consulting study, however, the sheer size and complexity of the problem offers no easy solution. And symptoms of the problem are already visible, including:

•higher turnover rates in industries where employees are finding it easy to switch jobs;

•fewer candidates in the market when actually needed;

•changing attitudes among jobseekers who have higher expectations;

•shorter job tenure; and

•pressure on salaries as competitors aggressively pursue the “A” players.

Smart companies already adopting new approaches

The job market under a labour-shortage scenario could come to resemble professional sports and a free-agent system in which talented players can test the market and choose which team they join. Candidates will create a best-employer shortlist to send out resumés and the challenge for employers will be to get on a shortlist by adopting a marketing approach that enhances employer brand.

Some HR professionals already acknowledge this need for marketing-oriented strategies that sell candidates on the firm and build a stronger employer brand to attract talent. It involves employers being permanently visible in the job market and establishing relationships with potential candidates even before they enter the job market.

This will require a new approach among recruiters who, instead of simply reacting to current staffing needs, will need to establish a pipeline that constantly generates candidate leads amid a growing scarcity of talent.

So the task for recruiters is not simply to inform the market of job openings but to convince workers early and often that their organization represents the best choice and the smartest career move.

HR professionals are not necessarily trained in marketing, but coping in the rapidly changing labour market will require HR to adopt new recruiting strategies that incorporate best practices for an emerging labour shortage.

The value of Internet recruiting

Some companies are already seeing the value of the Internet as a key solution to a shrinking pool of good job candidates. That makes sense because there is no denying that jobseekers are flocking online to scan opportunities and connect with employers.

According to the 2004 Canadian Interactive Reid Report conducted by Ipsos-Reid, Internet use among Canadians has hit 78 per cent, an increase of five per cent over 2003. Out of the 78 per cent of Canadians online, 73 per cent said they have or would use the Internet to look for a job.

Gabriel Bouchard is vice-president and general manager of Monster.ca.

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