Tech talent in demand while other positions face elimination in post-pandemic life
Alykhan Jetha has been on the hunt for software developers for months. But his company's job postings have only turned up a handful of applicants, most of whom don't have the skills he needs. It's a far cry from a year or two ago, when he could rely on roughly 50 applications rolling in per month for each role, with close to 10 per cent skilled enough to interview.
For Jetha, the chief executive officer of Marketcircle, a Markham, Ont.-based software company, the talent shortage has serious implications.
“There are features I need to implement to remain competitive that I'm being held back from implementing because I need people to do it. So that renders me less competitive than I would like to be,” he said. “The longer-term impact is incalculable. If I'm more competitive I get more customers, and ... I can invest more money into being more competitive.”
Jetha's challenges exemplify one side of the impact of technology on Canada's labour market. The country's skilled tech sector is experiencing significant growth and a high rate of job vacancies as companies compete for coveted talent, a trend that has only picked up speed during the pandemic.
On the other, the acceleration of automation and digitalization among Canadian businesses in the past year may permanently claim some service sector jobs as e-commerce and people working remotely become ingrained parts of post-pandemic life.
“The pandemic represents a labour reallocation shock. Employment conditions are strong in some sectors, but weak in others,” wrote Sri Thanabalasingam, senior economist with TD Economics, in a June 23 note. “Individuals with skills in digital technology are likely to be in high demand, but those in more traditional retail roles may not be. These workers will have to retrain to acquire expertise in this regard.”
According to Statistics Canada's job vacancies report for the first quarter of 2021, there were a “record” number of vacancies in professional, scientific and technical services, with vacancies for computer and information systems professionals up 11 per cent, or 2,100 positions, from this time last year.
“We're really seeing strong employer hiring appetite in the tech world,” said Brendon Bernard, senior economist at the Indeed Hiring Lab.
Jetha, who expanded his search to other countries, said he believes domestic companies are increasingly competing with U.S. firms that can translate savings on health-care costs into higher salaries for Canadian workers.
Shannon Leininger, president of Cisco Canada, traced the growing number of vacancies to a failure to encourage school-aged kids and teens to pursue science, technology, engineering and math disciplines, a lack of access to digital skilling in certain communities and the fact that Canada's tech sector is growing at twice the pace of the broader economy.
But Bernard was reluctant to label the phenomenon a skills shortage.
“This is a rapidly growing industry and has been for a while. That suggests there are workers to take these jobs, but the overall demand is quite strong and there's a lot of competition,” he said. “I think that while a strong demand for workers can mean hiring for individual employers is difficult, it doesn't mean the sector overall can't grow.”
Meanwhile, the widespread adoption of technology that was “crucial” to Canada's economic recovery after the devastating firstwave lockdowns may weigh on the labour force, Thanabalasingam wrote. Retailers and wholesalers that invested in e-commerce saw sales grow even with fewer employees than pre-pandemic levels, and the Zoom boom has prompted a society-wide desire for hybrid work post-pandemic that could see fewer people in the workplace, and may reduce demand for the services that cater to office workers.
The jobs most likely affected by these structural shifts — office support workers, salespeople and service sector employees — had already been deemed by Statistics Canada to be among the five occupation types most at risk of having their jobs displaced by technology. Many of those same occupations experienced significant employment drops in the past year.
Weighing in on the two-sided recovery in a June 10 speech, Bank of Canada Deputy Governor Timothy Lane pointed out that the jobs at risk of displacement are ones “disproportionately held by women, young people, low-wage earners and racialized Canadians.”
Bernard said it's still unclear how these changes will shake out, giving the example of an initial rush back to brick-and-mortar retailers. “In some cases the post-pandemic short-term and long-term might look a little different.”
TD forecasts the unemployment rate will reach 2019 levels by the end of 2022, but “if the digital transformation is deeper, and more workers are permanently displaced by technology, it could take even longer.”