By Ian J. Cook, CHRP

With unemployment in BC still running above eight per cent many organizations believe that there are plenty of fish in the sea. However, other data from several sources, including the HR Metrics Service and the Conference Board of Canada, suggest that hiring is coming back and that it may not take long for the unemployment rate to start declining. If your organization has plans to add staff over the next 12 months, you need to be prepared for a challenging hiring market.

Let’s take a look at the numbers. In January of 2011, the HR Metrics Service suggested that 2011 would see an increase in hiring and that organizations should start to get ready. What we saw in the trends from two years of data were early indications of increases in labour market movement. Absenteeism is a known precursor to an increase in voluntary turnover. Absenteeism in 2010 was running at almost 20 per cent higher than in 2009. Combined with this number, resignations (voluntary turnover) steadily climbed across 2010 in all categories including those with less than 90 days or one year of service. The overall resignation rate in 2010 was 50 per cent higher than in 2009. Other indicators of labour market rejuvenation were the steady increases in vacancy rate, external hires and external time to fill. Increases to all of these measures suggested that hiring was happening more and taking longer.

Information from the Conference Board of Canada’s Help Wanted Index is indicating that a volatile job market in 2010 has settled into a steadily growing market in 2011 all across Canada and that there are clear signs the pace of growth is accelerating. Through the Help Wanted Index the Conference Board tracks the number of online job postings nationally. In March, the index stood at 125.3 points. That’s the highest level since it started in 2005 and a 10.4 point increase on the previous month. BC HRMA’s online postings — the People Portal, which focuses on HR jobs — have also returned to levels previously seen in the summer of 2008.

As a correlate to the Help Wanted Index, the Conference Board also publish a measure of labour market tightness calculated as the number of unemployed people per online job posting. Although this measure does not capture the large population of job seekers who are employed, it does give some indication of how the labour market is changing. This measure has shown a steady tightening over the last 12 months, which has accelerated in the last three months, moving from 2.6 candidates per posting in January to 2.3 candidates per posting in March. We should expect this tightening to continue as the year progresses.

The final key piece of data to bring into your recruitment preparations is to do with the composition of the labour market. This has changed radically over the last five years. Our current unemployment figure is not just due to lost jobs, most of this employment has been recovered. The eight percent figure is largely due to the increase in the number of people participating in the labour market. In BC, 2011 is the approximate year when all increases in the size of the labour market come from inward migration to BC, either from other provinces or other countries. This means that the composition of our labour market has changed and will keep on changing, making it harder to find your “traditional” hire and causing organizations to approach who and how they hire very differently.

BC HRMA’s HR Trends Survey for 2011 indicated that over 50 per cent of organizations in BC expect to add staff this year. That is good news for the economy and those looking for work. However, the indications are clear that the HR groups tasked with finding these high-value hires are entering into a highly-competitive and changing labour market.

Are you ready?

Throughout his career Ian J. Cook, MA, MBA, CHRP, has pursued his fascination with people and business. During his early career, Ian was both an entrepreneur and an operational manager. These experiences led him into consulting on organizational effectiveness, a path he followed for 10 years while serving some of the world’s leading organizations. Ian has established a reputation as a strategic business builder who is far-sighted and thought-provoking.