Executives often talk about employees being their most important asset. But those words will soon ring true as never before. By 2020, the Canadian labour market is expected to face a shortage of a million workers. Yet it won’t take nearly that long for companies to start feeling the pain. In a 2004 survey of Canadian HR executives, more than half said they had already encountered significant challenges hiring for key technical or skilled jobs, and retaining critical talent. In another survey, 83% of Canada’s medium and large companies said they were currently experiencing shortages of skilled labour, with more than 60% expecting the problem to become even more pronounced in the future. Canada’s growing shortage of labour and talent is being driven by a number of long-term trends. Baby boomer retirement. Slower population growth. Competition from employers in the U.S. and abroad. And a chronic shortage of skilled immigrants. When experienced employees retire, they take with them a wealth of knowledge. Companies will find it increasingly difficult to fill those vacant positions — and even harder to replace retiring employees’ experience and expertise. To preserve those priceless assets, companies need to bring in new people while the old guard is still available to share what it knows. People-related issues will have a big impact on business strategies. With labour and talent in short supply, companies will need to carefully plot their long-term moves. “Failure to anticipate shortages will force companies into tough choices,” says Stephen Diotte, a partner in Deloitte’s Human Capital practice. “They will either have to buy the necessary talent at a huge premium — or watch their strategies fail for lack of resources. In either case, the impact on shareholder value is clear.” The typical reaction to a labour crunch is focusing massive efforts on acquisition — recruiting aggressively and paying big premiums for what is often low to midrange talent. But there’s a better way. Learn about Deloitte's Develop-Deploy-Connect model, designed to help companies generate superior performance.  Return to our series on Talent Management
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