Addressing Skills Shortages in Small and Medium-Sized Enterprises

Ottawa, August 14, 2024 — In fast-growing Canadian cities, skills shortages are the most common employment challenge facing small and medium-sized enterprises (SMEs), according to new research from The Conference Board of Canada. The analysis focused on Abbotsford-Mission, B.C., Halifax, N.S., Moncton, N.B., Oshawa, Ont., and Saskatoon, Sask., which saw rapid immigration population growth between 2016 and 2021 and is a summary of conversations with SME owners and senior leadership from nine sectors.

“While Canada relies heavily on immigration to address labour and skills shortages, newcomers often encounter significant barriers to entering the labour market,” stated Stefan Fournier, Executive Director, The Conference Board of Canada. “To effectively unlock the full potential of the immigrant talent pool and address these shortages, SMEs must proactively work to dismantle these barriers.”

The labour shortage faced by SMEs across Canada is not due to a lack of applicants but to a scarcity of candidates with the requisite skills. For newcomers, SMEs prioritize English and French proficiency. However, some immigrants struggle to develop the required language proficiency due to limited access to language classes and the tendency of SMEs to overlook language as a learnable on the job skill.

Furthermore, complicated immigration systems dissuade SMEs from turning to immigration to meet their labour needs. Negative experiences with immigration programs, including ambiguity about the processes and outcomes, underscore the need for collaboration between SMEs and SME-serving organizations. Such partnerships can improve SMEs’ access to information about immigration procedures and their ability to navigate the system effectively.

“Challenges around sourcing staff continue to occupy the minds of business owners in Canada,” says Pouya Zangeneh, Senior Vice President of Small Business at Scotiabank. “New Canadians, with their diverse skills and experience, provide a valuable pool of talent that can play a critical role in alleviating the skilled worker shortage that Canadian Small Businesses often face.”

Although SMEs have adopted inclusive hiring practices, these initiatives lack inclusive recruitment and onboarding strategies, further impeding employment opportunities for immigrants. Engaging with immigrant-serving organizations can help facilitate the attraction, retention, and successful integration of immigrant talent into local labour markets.

Additional hurdles compounding labour market challenges are affordable housing, public transit, and accessible childcare. While businesses may not be able to directly tackle the unique infrastructure challenges of small and mid-sized cities, adapting workplace policies to accommodate transit accessibility and childcare responsibilities could be significant in alleviating these obstacles.

Given Canada’s skills shortages and the pivotal role of immigration in filling workforce gaps, concerted efforts by SMEs and SME-serving organizations are needed to fully leverage Canada’s immigrant talent pool.t pa

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