As businesses search for ways to cut costs, a majority of Canadian employers say they’ve been forced to hire “underqualified” staff due to recruitment budget constraints – a trend one recruiting firm says is playing out in Ottawa as well.
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As businesses search for ways to cut costs, a majority of Canadian employers say they’ve been forced to hire “underqualified” staff due to recruitment budget constraints – a trend one recruiting firm says is playing out in Ottawa as well.
“We’re seeing a significant skills gap in the marketplace that has been caused by AI and retirement and other factors,” said Sandra Lavoy, the National Capital Region regional vice-president for employment agency Robert Half Canada.
“We did a survey a few months ago and found that 41 per cent of hiring managers stated that they regretted some of the hires made in the past year, compared to 17 per cent the year before.”
According to Lavoy, the rising cost of living and a shortage of talent have increased employees’ salary expectations over the last three to four years. As a result, many companies are cutting back on hiring.
Another report by recruitment consultancy Robert Walters said a survey of more than 3,000 white collar workers found that 71 per cent of employers nationwide are bringing underqualified staff onboard because of budget cuts.
It’s an issue that’s become more prominent since the beginning of the year, Megan Gallagher, a senior consultant at Robert Walters, told OBJ.
“Post-COVID, everybody kind of ramped up in terms of hiring,” she said. “They did it in a very voluminous way, without much strategy behind it. I think we’re paying the price for that now.”
In the last few years, industries have dealt with a number of expensive challenges, including inflation and rising interest rates. As a result, many companies have taken a massive financial hit, leading to layoffs and restructuring.
In an effort to get back on track, many businesses are looking for ways to be more cost-conscious, Gallagher explained, and have begun rethinking their hiring practices.
In some cases, she said, it’s not that employees are underqualified; it’s that employer expectations are too high for what they can afford to spend in a competitive market.
“Usually a client comes to us and they have a profile with all these different requirements, then they tell us their budget, and it’s like okay, you’re probably not going to get somebody that is going to tick all of these boxes at that price,” said Gallagher.
The problem then becomes that the hire can meet the organization's needs, leading to other challenges.
“Instead of adjusting the budget to reflect the profile they wanted, they adjust the profile to meet the budget that they have,” she said. “It’s not really fulfilling the actual needs of the business.”
Businesses surveyed by the company reported a variety of knock-on effects of these underqualified hires. In many cases, Gallagher said responsibilities that should fall to the new hire end up on the plates of other employees.
As a result, 81 per cent of employers said employees’ stress levels had risen due to increased workloads created by underqualified hires. In addition, 53 per cent of employees said they didn’t feel supported by their employers due to lack of resources. There were also reports of decreased productivity, higher rates of turnover and difficulty retaining workers.
All of these issues have a significant impact on the culture of a company, according to Lavoy.
“The culture of a company has to be good to retain staff,” she said. “When you retain staff, you will grow your business … When you hire underqualified people, they get frustrated. It affects not only the new people but the tenured people.”
For employers in this situation, Lavoy said the best place to start is evaluating the organization’s current compensation structure. While allocating more money for new hire salaries is one solution, she said additional perks could help make up the shortfall for some candidates while money is tight.
“Sometimes you can’t pay them any more, so you have to look at what is most important to employees besides money,” she said. “Fifty per cent of employees today want increased flexibility like remote or hybrid roles. It could be maybe a wellness program, sabbaticals, no cap on vacation days. Employees today want to make money, but also, more important than money is quality of life.”
