IT hiring slump to bring about skills shortage: Survey

Following a slump in hiring activity last year, a majority of Canadian technology companies are facing a talent shortage in 2014, according to a recent survey.

As much as two-thirds or 64 per cent of Canadian IT companies believe they will experience “moderate to significant” skills shortage, a survey conducted by the Canadian arm of international recruitment consultancy firm Hays.

When asked about the potential causes for skills shortages 44 per cent of respondents cited lack of training and professional development, 26 per cent said very few people were entering the labour market.

Hays Canada surveyed 140 Canadian IT employers in November 2013 on their on their hiring plans and outlook. The recruitment firm found that company leaders were “overly optimistic” of their hiring prospects while they were actually “suffering severe skill shortages.”

“Companies would be better served by producing more accurate assessments of their growth prospects and adjusting their hiring plans accordingly,” said Rowan O’Grady, president of Hays Canada.

There was a 13 point difference between forecasted and real decrease in business activity last year – six per cent expected a dip in activity, and yet 19 per cent actually experienced one, according to the survey report.

“This translated into fewer people being hired for permanent positions,” according to a statement from Hays Canada. “Sixteen per cent of IT businesses expected to decrease headcount in 2013 when in fact 31 per cent did.”

As much as 53 per cent of employers expect to increase salaries by three per cent over the next 12 months. About 25 per cent expect to increase salaries by three to six per cent and 7.5 per cent expect to increase salaries by six to 10 per cent.

Other highlights of the survey were:

  • 39.5 per cent of employers expect permanent staff to increase in 2014
  • 21 per cent expect permanent staff to decrease
  • 39.5 per cent expect numbers to remain the same
  • 35 per cent of employers believe economy will strengthen in next six to 12 months
  • 58 per cent believe economy will remain the same

The top five benefits offered by Canadian employers are:

  1. Extended health benefits
  2. Individual performance-related bonuses
  3. Ability to work from home
  4. Pension/RRSP contribution matching
  5. Flexible work hours

Companies that are frustrated by an inability to find skilled professionals, particularly at the mid management level where there is additional pressure to fill vacancies, can hire a slightly less experienced candidate with transferable skills who can be trained and mentored to develop into the ideal employee, according to Hays Canada.

This may mean that employers will have to invest more in their human capital to achieve the desired result but training courses on the latest platforms and systems are essential for employees to keep pace with adoption.

Succession planning should also play a role, the firm said.

Knowledge transfer will become a key issue for many companies that will lose the baby boomer generation to retirement in the coming years.

While 46 per cent of companies have or are implementing a succession plan, that number is too low.

Unsuccessfully transferring knowledge from one demographic to the next will only serve to exacerbate shortages in all industries, Hays said.



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Jim Love, Chief Content Officer, IT World Canada

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Nestor E. Arellano
Nestor E. Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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