Business Use of Apprenticeships to Fill Labour Shortages Up 217%, With Canada Topping Global List

A woman checks out a jobs advertisement sign in Toronto on April 29, 2020. The Canadian Press/Nathan Denette

Canadian businesses are turning to apprenticeships to cope with labour shortages, a recently released report by a multi-national HR firm has found.

Canadian employers increased their use of apprenticeships by 217 percent last year, compared to the 36 percent average increase reported by the four other countries surveyed by Peninsula Group.

One-quarter (25.7 percent) of the 79,000 small- to medium-sized businesses surveyed in Canada, Australia, Ireland, New Zealand, and the U.K. cited recruitment as their biggest staffing challenge.

The survey also found that 46.5 percent of employers are investing in upskilling and training their existing staff in a bid to fill the labour gap.

“In 2022, we found that the top two concerns for employers were labour shortages and employee retention,” Peninsula Canada CEO Raj Singh said in a Jan. 4 press release. “And one of the best ways to overcome these challenges was to invest in their employees and that is what we saw happen last year.

“By prioritizing the professional growth of their employees, businesses not only mitigate the effects of labour shortages but also cultivate a skilled and motivated workforce, fill in gaps in the workplace, and set the foundation for continued success in the ever-evolving business landscape.”

Employers from all five countries surveyed said pay increases were their top method for handling the ongoing labour/skills shortage, although Canadian businesses were the most likely to increase wages. Eighty percent of Canadian businesses have upped wages to entice workers compared to only 55.5 percent of U.K. businesses.

More than half of Canadian employers have also offered flexible working hours to attract employees.

Canadian businesses ranked high in their retention efforts with 64.9 percent listing financial incentives as their main method to keep workers.

Inflation Top Concern

Eighty-two percent of Canadian business owners ranked inflation as their biggest concern. The central bank has raised interest rates 10 times since early 2022 while remaining at 5 percent over the past six months.

Inflation concerns were followed by labour shortages at 47.8 percent and employee retention at 45.6 percent, an indication that “employers are worried about how the economy will affect their day-to-day business functions,” the report noted.

Despite the challenges identified by Canadian businesses, many are optimistic about 2024. Forty-five percent of those polled said this year “shows some promise” and 44.7 percent ranked growth as their top business goal for 2024.

Part of that optimism may be due to predictions that the country’s inflation rate will drop later this year. Deloitte Canada chief economist Dawn Desjardins recently said inflation would be “headed toward that 2 percent target.”

“We think that as that happens, it opens the door to the Bank of Canada changing positions,” she told BNN Bloomberg in a recent video interview. “Moving from tightening mode to gradually lowering interest rates.”

During a year-end speech in Toronto last month, Bank of Canada Governor  Tiff Macklem said two years of “monetary policy tightening” is “paying off.”

“The economy is no longer overheated, and that is relieving inflationary pressures,” he said. “The 2 percent inflation target is now in sight. And while we’re not there yet, the conditions increasingly appear to be in place to get us there.”