Workplace responses to vacancies and skill shortages in Canada

Purpose - The purpose of this paper is to analyze employer responses to vacancies and skill shortages by adopting certain workplace practices. Design/methodology/approach - Making use of the longitudinal nature of the Workplace and Employee Survey, a nationally representative sample of Canadian organizations, the paper applies both linear and probit models to examine incidence of positive vacancies and vacancy rates and subsequent adoptions of various workplace practices in response to such vacancies and skill shortages. Findings - Employers respond to labour and skill shortages in a number of ways, focusing more on short‐term and less costly solutions, such as adoption of flexible working hours and increases in overtime hours, greater reliance on flexible job design and part‐time workers, and implementation of self‐directed work groups and problem‐solving teams. There is no evidence that workplaces would raise employee wages or fringe benefits to alleviate shortages. Practical implications - In the absence of a well‐developed internal market, firms are likely to continue using short‐term and less costly solutions. Governments should work with firms, workers and their representatives and act strategically to resolve issues of timely identification of skill shortages in order to make informed decisions and put mechanisms in place to address such shortages. Originality/value - The results are based on a national longitudinal survey and a number of important practical and policy implications are discussed in the paper