In this week’s EconMinute, we’re talking about the job vacancy rate.
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Based on news reports and surveys, businesses are eagerly trying to staff up. However, with these reports often comes a reference to labour shortages, with a story of how the businesses who are trying to recruit and employ more workers are finding it more difficult to do so.
We were curious to know which industries have the most open positions they are scrambling to fill. To get a sense of this, we look at what is known as the job vacancy rate. This rate is simply the number of positions which are vacant in a given industry compared with the total number of positions in that industry. A number of 5%, say, would mean that 5% of all positions are currently unfilled.
Unfortunately, one caveat is this data is reported with a bit of a lag, so the latest available data is July, as restrictions were still being eased across provinces.
So, how many open positions are there, and which industries have the most openings?
- On average, the job vacancy rate across Canada was 4.8% in July, similar to the June rate (4.9%) but much higher that the rates as of last year (as low as 3.0% in December). This amounts to 805,500 jobs vacancies.
- In Alberta, the numbers were slightly better. There were about 75,300 vacant positions in the province in July, resulting in a job vacancy rate of 3.9%.
- In many ways, this is an encouraging sign: it indicates that businesses are open and actively recruiting workers, a hopeful sign for those who are unemployed.
- Data on job vacancies by industry are only available at the national level. The number show a clear connection to the industries directly affected by COVID. For instance, accommodations and food services had the highest vacancy rate of any industry (11.6%) by a longshot, representing 132,800 positions.
- The lowest rates were mostly seen in industries less directly affected by COVID: industries and work related to the public sector, wholesale trade, and transportation & warehousing, to name a few.
- While industry-specific data are not available for Alberta, labour shortages in hospitality industries are a clear concern in this province as well. Quarterly numbers show that the mountain parks region, where hospitality and tourism are far and away the most important industries, has the highest job vacancy rate in the province.
In some ways, a high level of job vacancies in hard-hit industries is encouraging: businesses feel confident enough to hire again. That said, an inability to find workers in a timely fashion will hamper the economic recovery.
Time will tell whether this is a temporary phenomenon or not. If individual preferences change, and many no longer want to work in hospitality and food services, it could drive businesses to raise wages to find the people they need.