New research shows how labour shortage is directly affecting recruitment
Canadian businesses are turning to wage hikes to fill vacancies, according to a new report. Research from Capterra found that 50% of employers are increasing their salary offerings to attract new hires. Other enhanced recruitment tactics include:
The research found that the labour shortage has directly impacted 38% of the respondents - leaving existing employees with more workloads, business plan chaos, and declining revenue. Recent research from Robert Half found that 42% of employers have raised their starting salary offers, while 79% who have raised base compensation for new hires have begun adjusting the wages of their current staff.
However, this measure isn't exactly the most recommended solution by economic experts, who warned about its long-term impact in the economy.
"If employers are forced to increase wages because of pressures in labour markets, they counter that by increasing prices. We end up with this wage/price vicious cycle that doesn't help employees improve their real purchasing power," says Pedro Antunes, chief economist at The Conference Board of Canada. "In the end, this can lead to even higher interest rates, adding to the risk of a recession."
The Capterra research is already baring this consequence, as 78% of businesses admitted that they have already, or plan to, increase retail costs to offset expenses due to supply chain disruptions.According to Antunes, implementing one-off or temporary measures would help staff keep up in the middle of a cost-of-living crisis.
"That can help get inflation down over the longer term, benefiting both households and businesses," he said.
