Key Takeaways
- Labour shortages are affecting businesses in several sectors of the Quebec market, with repercussions on their productivity, margins and customer retention.
- Successful companies focus on human resources planning and employee development, in addition to recruitment.
- Succession planning requires a transparent and structured approach, a reality taken into account by financial institutions when assessing the health of their business clients.
- Technology is a real lever, but its impact depends on the workforce's ability to adopt it.
A position remains vacant a little too long. Hiring is done too quickly. And in the following weeks, management of the resulting performance issue takes on an unexpected scale. Many Quebec executives have experienced this type of scenario. For growing businesses, ambition requires a well-structured talent management strategy.
An Issue that Goes Beyond Operations
"The pressure to recruit is very present in several sectors," notes Marc Saulnier, Market Vice-President, Montreal-Centre and South Shore at Scotiabank, whose team specializes in commercial lending. "For several years now, this pressure has been even greater with respect to qualified staff," he adds. For businesses in these sectors that are actively pursuing growth, this constraint goes beyond operational issues and can also influence their ability to implement strategic priorities.
Constraints on Multiple Fronts
"You can find staff but finding qualified people who can fill the positions you're looking for is very difficult," he continues. Challenges may be related to government regulations, certificate or designation requirements, or technological advancements.
Wage competition adds to these constraints. Because businesses recruiting from the same candidate pools may end up bidding against each other, which affects profit margins without necessarily guaranteeing they have found the right person. And hiring is just the beginning: a new hire takes several months to become fully productive, which can temporarily increase the workload of the existing team.
Adapting Practices to Remain Competitive
Faced with these challenges, some businesses have chosen to redefine their operational models for recruitment. The adaptations noted by Mr. Saulnier include:
- Outsourcing certain functions, such as client communications or appointment scheduling, to maintain service levels without relying solely on internal staff.
- Introduction of flexible hours and tangible benefits, such as employer-subsidized lunches, to encourage attendance, or workplace day care centres, in response to the constraints of young parents struggling to balance in-office attendance with family life.
- Attention paid to workforce diversity: a team whose profile reflects that of the customer base is an asset, both for internal cohesion and customer relationships.
- Purchasing properties to house newly arrived workers in the country when housing became an obstacle to recruitment.
Mr. Saulnier encourages organizations to move away from hunting for the same profiles and instead focus on candidates without direct experience, but with the desired interpersonal skills. Technical skills can be taught, but behavioural skills, a little less so. A common pitfall: hiring the first available candidate to fill a vacant position, then dealing with the consequences. "It's better to leave a chair empty, but with the idea that the candidate eventually found will be the right one," he insists.
Beyond these recruitment principles, internal development practices distinguish the most stable organizations.
After years of supporting businesses, Mr. Saulnier has identified a winning characteristic: a marked focus on the planning and development of their human resources. This translates into sincere conversations with employees to learn about their ambitions. "Managers who check boxes, in an insincere approach, lead an exercise without added value," he notes. "We need to develop a development plan, provide training, bring employees to another level of thinking, and encourage them to take on more responsibilities," he observes.
Succession Planning: An Area of Focus that Leaves No Room for Improvisation
Talent management takes on a particularly delicate dimension when it comes to succession planning, whether it is family or internal. In the case of family businesses, explains Mr. Saulnier, oftentimes the succession does not survive beyond the second generation. As children have not necessarily been exposed to the same experiences as their parents, the sense of accountability may not have been acquired. And when shareholders remain active into their late sixties, or even later, some potential successors may lose interest before the opportunity to take over arises.
The transitions that work, according to him, have in common an anticipated planning, spread over several years, where potential successors occupy different roles within the organization. He cites the example of a client in the automotive sector whose three children were integrated into the business from a young age in separate roles, and where the intentions of the transition were clearly communicated to the management team. "Transparency avoids surprises and maintains team engagement," he explains.
Given the importance of the workforce to the sustainability of an organization, the issue of succession planning is systematically among the issues analyzed when Mr. Saulnier assesses a company, just like the financial structure. In assessing the company's strength, a vague succession plan or a key position without an identified successor are warning signs to watch for: if a client is unable to fill key positions, their ability to serve their own customers may be affected, not to mention the potential impact on their revenue.
Technology as a Lever
Finally, technology plays an increasing role in managing workforce constraints, but its contribution depends on one condition—that the teams in place are ready to adopt it. Mr. Saulnier notes a generational divide between employees whose relationship with digital tools requires a little more support, and the new generations who seek the flexibility and remote access that these tools allow. Bridging this gap without losing either side depends on both leadership and training.
The workforce is not simply an input to be managed—it largely determines a company's ability to grow, innovate and navigate uncertain times. Leaders who give as much attention to their recruitment and development strategies as they do to their financial strategy give themselves a structural advantage that promotes the achievement of their ambitions.
To explore how Scotiabank can support your workforce evolution, speak with your relationship manager or get in touch today.
Disclaimer
This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third-party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly, and action is taken based on the latest available information.