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July 21, 2021   Enterprise, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Services, Innovation and Resources, Stories   No comments

A wave of Canadians quitting their jobs is about to squeeze the labour market

Financial Post | Victoria Wells | Jul 21, 2021

Help wanted - A wave of Canadians quitting their jobs is about to squeeze the labour marketCombination of job vacancies, people quitting or retiring will make labour shortages worse into the fall, RBC says

It seems like everyone is quitting their job these days.

Headlines out of the U.S. speak of mass resignations and a “summer of quitting,” as Americans leave because of overwork and burnout.

Here in Canada, there is evidence of the same trend. Even the boss is ready to quit, said a survey released Thursday by LifeWorks and Deloitte Canada, with 51 per cent of exhausted senior managers reporting they’re considering quitting, retiring or moving to a lesser role.

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But all that quitting and retiring will have a negative impact on the Canadian labour market, a new report from RBC Economics says. And that could mean labour shortages will be even worse this summer and heading into the fall.

The report explains what’s behind the job resignation trend. Uncertainty over the economy forced people to stay put in significant numbers during the pandemic, even if they were unhappy, the report says. Retirements fell 20 per cent and quitting due to job dissatisfaction plunged 40 per cent, compared to the pre-pandemic period (March 2019 to February 2020).

But that’s all started to change as more people get vaccinated and the country reopens. The job market is recovering, with hard-hit industries such as retail seeing employment at almost near pre-pandemic levels. Sectors where employees could work from home are already past pre-crisis levels.

Things don’t seem so uncertain anymore, and it’s leading people to head for greener pastures.

“People are once again willing to quit if unsatisfied with their current positions — among the clearest signs that confidence in the labour market recovery is firming,” writes Andrew Agopsowicz, a senior economist at RBC Economics.

RBC says the number of people who left their jobs in June tripled compared to the same month in 2020. Meanwhile, retirements are picking up again. RBC expects 125,000 people to retire in the second half of the year as baby boomers opt out of the daily grind.

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That’s bad news for the already-declining labour force participation rate. RBC says this expected wave in voluntary job departures, combined with a rise in job vacancies, will make a labour shortage worse.

Expect industries where employment levels are back to pre-pandemic highs to be hit hardest. It’s going to be a lot more difficult for companies to find the skilled workers they need to fill positions, RBC says. Sectors such as professional, scientific and technical service, which has a vacancy rate of 4.6 per cent, compared to 3.6 per cent across all industries, will be impacted the most.

So what’s the solution? RBC says workers may be able to negotiate higher wages or more flexible working conditions amid a labour crunch, preventing some of those job vacancies due to dissatisfaction. But beyond that, the country will need to turn to new sources of workers, including immigrants, women and visible minorities. Still, those sources of labour won’t be enough in the short-term.

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