On This Episode Of Hoarders…

Finding it tough to find and hire new talent? Perhaps it’s because they’re being squirreled away for a brighter day

As the labour market tightened coming out of Covid, many businesses began experiencing a level of competition for labour and talent they hadn’t encountered before. And, just like any competitive commodity, the economy is now seeing a great deal of “labour hoarding” going on, as businesses try to keep as much talent as they can.

What is labour hoarding? It refers to a situation where employers are retaining more workers than they actually needed, often during economic downturns. Companies know that, even if they are a little overstaffed right now, that they will need to hire again in the future; labour hoarding now serves as a hedge against the competition they’re likely to face in the labour market when the outlook improves.

There are other reasons to hoard labour now too, beyond retention. “It’s not just retention,” said ZipRecruiter’s chief economist Julia Pollack. “It’s retention plus morale, plus productivity … Labor market dynamics have fundamentally changed: time-to-hire, recruiting costs and hiring costs have all grown substantially.”

What we’ve seen in the Canadian labour market is an unexpected level of strength at the employment level ― 150,000 jobs added in January’s jobs numbers came as a particularly big surprise ― suggesting at least some labour hoarding is going on. That tracks globally as well: a study from Skynova recently found that 91 per cent of all small businesses are doing everything they can to avoid layoffs, with 89 per cent saying they plan to keep labour hoarding into 2023. That will likely be welcome news for workers worried about a downturn.

“It has been such a tough road to staffing up, and turnover is still high, so firms are reluctant to freeze hiring and plan to use any slowdown to acquire or hold onto top talent,” economist Julia Coronado recently wrote. “[It’s] the opposite of the scar tissue from the Great Recession.”

Content written by Kieran Delamont for Worklife, a partnership between Ahria Consulting and London Inc. To view this content in newsletter form, click here.

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