What’s driving the labour shortage in Canadian construction?

By Mary Lawson, Partner and Organizational Renewal Leader, MNP LLP

Labour shortages are top of mind for Canadian construction businesses across the country. As you know all too well, delivering high-quality projects means hiring and retaining highquality people.

As you assess the labour landscape, and why this monumental challenge exists, you’ll gain new insights about how your company can manage it.

What are construction companies dealing with?

The data helps separate facts from myths as you build your workforce strategy.

The Business Development Bank of Canada (BDC) released a report with labour statistics and insights for multiple industries, including real estate and construction. Here are some key takeaways.

Across all industries:

• 55 per cent of entrepreneurs say they are struggling to hire

• 64 per cent say that a worker shortage limits their growth

In construction:

• 50 per cent of respondents say they have difficulty hiring

• More than 62,000 employees left the industry between February 2020 and August 2021, either due to retirement or employment outside of construction

While the current economic volatility can be attributed to pandemic disruptions, these employee shortages are long-term trends — they began long before 2020 and will continue long after.

Why is there a labour shortage in Canada?

So how did we get to this point?

Aging population

Baby Boomers are still the most populous generation in Canada; according to Statistics Canada*, Millennials (people born between the early 1980s and the mid 1990s) won’t outnumber them until 2029. As Baby Boomers age, they’re leaving the workforce faster than Generation Z (people born between the mid 1990s and late 2000s) is entering.

COVID prompted many people ap- proaching retirement age to exit a few years earlier than planned. We’ll continue to see a significant number of retirements over the next few years.

Behavioural trends among younger generations

Gen Z are taking longer to finish school and start their careers than previous generations. Labour force participation among teenagers, including summer jobs, is much lower now than in decades past.

This, combined with the fact that Gen Z are less numerous than Millennials and Baby Boomers, creates a natural reduction in the total labour pool.

Shifting priorities

The pandemic prompted many people to think big picture and ask themselves what they truly value in their careers and their personal lives. What’s commonly called the “Great Resignation” is a result of this mass re-evaluation of priorities.

Young people joining the workforce care more about factors like environmental impact, diversity & inclusion, social involvement, and work-life balance than the retirees leaving the workforce. This trend pre-dates COVID and should be treated as central to your hiring strategy.

Addressing myths

Many managers and decision-makers in the construction industry believe COVID subsidies and EI programs are de-incentivizing people from entering the workforce. In reality, COVID programs have ended, and people are working; unemployment in Canada is near record lows.

Born and raised in Nanaimo, Dallas is the kind of accountant who takes getting to know his clients seriously so he can truly help them succeed. But this analytical problem solver’s career didn’t start out with numbers.

Did you always want to become an accountant?

No. I started my adult life in the military, where I worked in the Communications division with radio, satellites and crypto systems. I spent 12 years in active duty, including time in the Middle East. I decided to go back to school and became interested in accounting. It’s very structured, and involves problem solving and figuring out the best solution for people, which I enjoy.

What is your role with MNP?

I’m a business advisor who works with private enterprises. Most of my clients are in the real estate and construction industry — developers, builders, sub-trade contractors. I also work a lot with people who have personal real estate tax problems because they are subdividing land, have multiple rental properties, or have some sort of complex real estate tax issue. My other area of focus is on technological solutions. I can help implement new paperless cloud accounting solutions, and help clients put information into the system in a way that gives them actionable insights into their business.

What’s the common thread that runs through your clients?

The common thread is around business and succession planning: clients have a vision in mind on where they want their business to be or how they want it to grow but may not know how to execute on that vision. My job is often to help them understand the phases and lifecycles of a business and the steps they need to take to make their vision a reality.

How do you approach a client conversation?

On the first visit, I approach it as a doctor seeing a first-time patient. I ask a lot of questions, and some might seem invasive or not pertinent. But if I don’t have the full picture of what’s going on, I can’t diagnose the