Labour shortages continue to challenge small business

"SMEs have been the hardest hit by the economic impact of COVID 19, especially smaller businesses and those in the services sectors."

A new report, Small and Medium Size Employers (SMEs): Skills Gaps and Future Skills indicates labour shortages and skills gaps continue to challenge small and medium size employers (SMEs) but, if addressed, could support pandemic recovery and growth of Canada’s SMEs. 

The report by Ryerson’s Diversity Institute and the Ontario Chamber of Commerce in partnership with the Public Policy Forum and supported by the Future Skills Centre, found that 40 per cent of SMEs identified skills shortages as a major competitive challenge. 

These skills shortages vary across regions and sectors, with Atlantic Canada, British Columbia and Ontario being more severely affected, and manufacturing, retail trade and construction representing the hardest hit industries, said the report. 

Further data from a 2020 OCC report found that 62 per cent of SMEs tried to recruit employees in the last six months and among those, 82 per cent mentioned having experienced at least one challenge. The top one, cited by 60 per cent of respondents, was finding someone who possesses the adequate qualifications, added the report.

“Further research and supports for SMEs is vital and can’t be ignored in our discussions of economic recovery and growth,” said Wendy Cukier, founder of the Diversity Institute, in a news release. “SMEs have been the hardest hit by the economic impact of COVID 19, especially smaller businesses and those in the services sectors. Most of the discussion regarding skills development is focused on large businesses despite SMEs being Canada’s biggest driver of job growth.”

“Small and medium-size employers are an integral part of Canada’s economy, and their health is vital to the resilience of our job market. One of the big challenges they face is finding employees with the right skills and qualifications, as recent research has shown,” said Pedro Barata, Executive Director of the Future Skills Centre. “That means that we need to align our skills training with what the labour market is demanding—and, above all, to ensure that training can respond quickly to sudden economic shocks.”

“We understand the hardships small businesses are enduring while COVID-19 abatement measures are in place. Many have pivoted, and will be integral to recovery and growth post-pandemic,” said Ashley Challinor, Vice President, Policy, Ontario Chamber of Commerce and a co-author of the report. “Small firms will need to leverage new talent and technologies to adapt to the virtual economy. As consumer behavior changes, the ability of small businesses to ‘go digital’ will be a major determinant of Ontario’s long-term economic recovery.”


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