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Focus on morale, skills are key to continued growth for Canadian business

The COVID-19 pandemic has upended every aspect of life. And as it progresses into its third calendar year, the long-term effects of living and working in the “age of adaptation” is taking its toll on the average Canadian employee.

Undoubtedly, you’ve seen plenty of headlines lately about severe labour shortages in many sectors and regions across Canada. Take Quebec — recent estimates suggest as many as 200,000 workers are needed to fill the available roles requiring talent today.

As many as 3,000 more truck drivers and 25,000 manufacturing workers were needed yesterday.

In fact, some estimates say the province’s manufacturing sector has lost $18 billion in the past two years due to the lack of sufficient staff to secure contracts.

You’ve likely read articles about the impending “Great Resignation” and the increasing number of employees who are prepared to walk away from their current roles if working arrangements — or the work itself — doesn’t improve. A 2021 study from Microsoft found that more than half of Gen Z workers and more than two-in-five employees overall were already considering resigning from their current roles.

Given these trends, it’s perhaps unsurprising that the findings of HSBC Bank Canada’s most recent 2021 Navigator: The Voice of Business report showed that more than one-in-four (28 per cent) Canadian business leaders see workforce morale as a significant threat to their future growth.

What’s surprising about the morale concerns is that they rank second to only a COVID-19 resurgence in terms of growth threats in Canada, and the 28 per cent figure ranks highest across all markets surveyed in the report – a full 25 per cent higher than the global average. And nearly as many (24 per cent) say that the shortage of relevant skills and a tight labour market is a threat to both their recovery and growth over the coming year.

The concerns around labour and particularly morale are twofold.

First off, the majority of businesses are still trying to return to pre-pandemic profitability. The new Navigator report pegged November 2022 as when the average Canadian business expects to return to the same profitability levels they were achieving before COVID-19. Secondly, if morale and labour shortages drag more heavily on Canadian businesses than those in other markets, individual businesses and our overall economy are at risk of falling behind global competitors.

Overcoming morale, talent concerns

There’s no single silver bullet to address the potential operational and labour implications that a severe COVID-19 infection resurgence, decreasing morale or labour and talent shortages could have on Canadian businesses.

However, there are some approaches that those polled as a part of the recent Navigator survey are leaning more heavily towards to try to limit the potential impact of each development.

First, the pandemic has had at least one positive effect on Canadian businesses and employees — it’s fuelled the rapid adoption of new technologies in the workplace. Whether it’s overcoming dispersed workforces or circumventing pandemic-born challenges, most Canadian businesses have found new tools that can help them succeed on a day-to-day basis.

These adoption rates are not likely to subside. More than a third (38 per cent) of the Canadian companies polled said they regard technology and digital tools as their best solution to protecting themselves from challenges in the future. Nearly half (46 per cent) say that technologies designed to improve the efficiencies of hybrid and remote working — and to further enable both for their employees — will be critical to improving their business’s margins in the new future.

Similarly, even more (48 per cent) say spending on these tools will be their biggest technology and digitalization investment over the next three years.

But investing in technology is only half the answer. What good are new tools if a company’s employees can’t use them? Or even worse – if the company doesn’t have the employees to use them in the first place?

Given the extreme challenges businesses are facing in trying to attract new talent, it’s clear that many need to put greater emphasis on developing new skills within their current workforces. In fact, one-in-three (32 per cent) Canadian companies we spoke to for the Navigator report say they are also future-proofing their businesses by increasing investment in their people via upskilling and training their staff.

It’s safe to say that very few businesses are entering 2022 expecting their operations to go back to how they were pre-pandemic. But those recognizing the importance of investing in their people, and investing in the tools those people need to thrive, will have a much better chance of retaining and expanding their talent pool and setting up their business for long-term success.

Alan Turner is the head of commercial banking at HSBC Bank Canada in Toronto.