Home Regular Contributors Adam Legge The solution to the labour shortage problem might be right under our...

The solution to the labour shortage problem might be right under our noses

Adam Legge

Alberta’s economic recovery story continues as we head into the latter half of 2022. In fact, economists project that the province will regain 2014 levels of economic activity as commodity prices hit a near-decade high and unemployment rates hit a five-year low recently.

However, this robust economic environment has led to a variety of challenges, including inflation and its painful remedy, rising interest rates. But for businesses, the primary challenge keeping CEOs up at night is labour shortages.

Labour markets in Canada are tighter than they’ve been in decades. There are over one million unfilled jobs across Canada, and over 100,000 of them are in Alberta. Alberta’s job vacancy rate is currently 5.2 per cent, meaning one in 19 jobs is vacant. This is up from one in 42 jobs pre-pandemic. At the same time, while many jobs are looking for people, relatively few people are looking for jobs as Alberta’s unemployment rate has fallen to record lows – 4.9 per cent in June.

This all adds up to businesses having an exceptionally difficult time filling vacant positions. More than three-quarters of Alberta businesses report that labour-related constraints are limiting their ability to meet demand.

Structural changes such as an ageing population and shifting work preferences, and pandemic-related factors such as slowed immigration and worker absences, have added to the labour shortage we see today. With several different contributors, there are certainly many possible solutions (e.g., investing in automation or increasing immigration levels).

But one important opportunity that is often overlooked is enabling the participation of Albertans who are not currently in the labour force and belong to groups underrepresented in the labour force.

There is a huge opportunity to add more workers to Alberta’s economy by removing critical barriers to participation faced by various demographic groups, including women, persons with disabilities and older workers. These groups consistently have lower participation rates than their counterparts. And while immigrants, visible minorities and Indigenous peoples have similar participation rates to their counterparts, people from these groups are more likely to be underemployed with respect to their training, exacerbating the skills shortage reported by employers.

While any individual person may face challenges or barriers to employment and career success, research consistently demonstrates that many face systemic barriers based on the group or groups they belong to. Barriers can include discrimination in the hiring process, harassment and micro-aggressions from colleagues, self-selection into “safe” or “appropriate” jobs, or a lack of transportation, accommodations, supports or training. Ultimately, this leads to the chronic underrepresentation and underemployment of these groups in the labour market.

Addressing these barriers is undoubtedly important from an equity and inclusion perspective. But furthermore, removing barriers to labour force participation could assuage the critical labour shortages facing Alberta’s economy. If we can improve the engagement of these groups, well over 100,000 people could be added to Alberta’s labour force. Closing the participation gap for women alone can add over 140,000 people. Ultimately, helping Albertans have equal opportunity to pursue the work they want would go a long way to filling the 100,000 vacant jobs in the province.