According to the Conference Board of Canada, the cost of job vacancies in Ontario alone is $24.4 billion. And the cost of vacancies is a number HR should be aware of and should use to assist in budgeting for succession planning, training and recruitment.
Consequences of unfilled positions
Job vacancies that go chronically unfilled can cause several major issues for employers.
When unfilled, strategic management roles can cost millions in lost business or missed opportunities. And without good managers and leaders, employees can become less productive, lose their morale and eventually even leave the employer. These are far-reaching consequences that can push a profitable business into a problematic position.
However, customer service roles are just as critical. Take for instance the heavy duty mechanic who needs to satisfy the customer who needs a crane fixed correctly the first time. Cranes or similar equipment often are one of the main parts of the supply chain for dozens of employees and contractors waiting for delivery of materials or for critical assembly. Not only is this mechanical company missing out on lucrative contracts, but it’s also affecting a lot of other companies down the supply chain. The domino effect of a few unfilled positions goes surprisingly deep.
Critical costs across Canada
In Alberta, the cost of vacancies in manufacturing is likely staggering, with over 55% of employers having difficulties hiring millwrights (one of the critical trades to keeping assembly lines humming and mills and upgraders working). If 10 production workers are waiting on a millwright to fix equipment, the results can be devastating to the bottom line with the average manufacturing employee producing $400,000 in revenue; waiting on finding a skilled employee is extremely costly. And with 17,700 manufacturing vacancies in Canada, this adds up quickly on a national level.
The transportation and heavy equipment industries across the country face similar challenges, with a national shortage of heavy duty mechanics. In Alberta, 76% of employers report hiring difficulties and 23% report vacancies lasting over four months. Imagine having equipment costing hundreds of thousands of dollars sitting idle for months or even worse, losing millions in revenue due to not being able to use equipment in oil sands and coal mining. That’s a lot of economic activity at all levels lost because of unfilled positions.
Things are looking up
Fortunately, Canada’s Job Grant program and Canada’s colleges are moving as quickly as possible to train Canadian apprentices. Hopefully, employers are calculating the costs of their vacancies and investing in training and recruitment alongside the government to create more skilled workers. Everyone will benefit from higher employment rates, higher job fulfillment rates and better trained trades workers.