The Daily. Thursday, November 1, 2001

Workplace and Employee Survey: Job vacancies

Virtually one-half of all the long-term job vacancies in profit-oriented firms during 1999 were in the retail trade and consumer services industries, according to a new report based on data from the 1999 Workplace and Employee Survey (WES).

These sectors, which pay relatively low wages and have high rates of labour turnover, accounted for 50% of the job vacancies that went unfilled for at least four months prior to the time the survey was taken.

This suggests that even in periods of strong growth in the high-technology sector a substantial share of job vacancies is found outside high-tech industries. Both employment and gross domestic product recorded strong growth during 1999, while the unemployment rate was relatively low.

Firms in retail trade and consumer services accounted for 30% of jobs in the private sector in 1999. They paid their full-time workers an average of $13.18 per hour, compared with an average of $19.14 for all firms, and they also had a relatively high rate of labour turnover.

Of the 735,900 establishments in Canada, about 13%, or 95,400, reported a total of 286,415 job vacancies in 1999. This put the job vacancy rate at 2.6%. About 1.2% of positions were still vacant after four months or more, which is an indicator of vacant jobs that employers find hard to fill. These figures may overestimate the number of jobs available to unemployed workers because they include some positions available only to people inside the firm. Companies may fill these positions, through promotions or lateral moves, with existing workers, and might not replace them through external recruitment.

Note to readers This release is based on analysis in a new report titled Quest for workers: A new portrait of job vacancies in Canada, and an accompanying research paper, Which firms have high job vacancy rates in Canada?, both available today. Quest for workers is the second report in the Evolving Workplace Series, a co-operative venture of Human Resources Development Canada and Statistics Canada to promote research on the workplace using data from the 1999 Workplace and Employee Survey (WES). This survey collects a broad range of information on a sample of employers and their employees. It aims to shed light on the relationships between competitiveness, innovation, technology use and human resource management on the employer side, and technology use, training, job stability and earnings on the employee side. Future reports in this series will cover such topics as training determinants, gender-based wage differences and the computer technology-education connection. The WES covers all industries except farming, fishing, hunting, trapping and public administration. Unless otherwise stated, all numbers presented in this release refer to these industries. In these industries, the vast majority of establishments operate for profit. In this release, the term private sector refers to the establishments that operate for profit in the aforementioned industries. The job vacancy rate equals the number of unfilled positions divided by the total number of positions, both filled and vacant.

The report found two types of establishments with high vacancy rates. The first consisted of firms that employed a highly skilled work force and that innovated and adopted new technologies that require greater skills. The second type consisted of firms that were not unionized, were part of a single-establishment company, and operated in retail trade and consumer services industries.

Despite the growing interest regarding labour shortages that emerged during the economic expansion of the late 1990s, there was no Canadian survey measuring the number of job vacancies in Canada, until recently.

The WES, which covers topics such as technology adoption, innovation, human resource practices and business strategies, also contains information on job vacancies. It is the first nation-wide Statistics Canada survey to measure job vacancy rates since the Job Vacancy Survey during the 1970s. That survey estimated job vacancy rates between 1971 and 1978 at 0.4% to 1.6%.

While the WES measured both vacant positions available to people inside the firm and those available to workers outside the firm, the Job Vacancy Survey measured only vacant positions available to people outside the firm. As a result, the two surveys are not comparable.

Vacancy rates vary markedly by industry and region

A high unemployment rate usually coincides with a low job vacancy rate and, conversely, a high job vacancy rate coincides with a low unemployment rate. As the demand for labour rises, the number of unemployed workers tends to decline, and the number of job vacancies tends to increase.

In 1999, the extent of labour shortages varied substantially by industry. In forestry, mining and oil and gas extraction, where hourly wage rates for full-time workers averaged $26.42, job vacancy rates were 0.9%. In contrast, job vacancy rates were 3.9% in retail trade and consumer service industries.

Ontario, Manitoba and Alberta, three provinces with relatively low unemployment rates in 1999, displayed fairly high job vacancy rates. In Ontario, the job vacancy rate was 3.2%; in Manitoba and Alberta, it was 3.4%.

This was in sharp contrast with the Atlantic provinces, where the job vacancy rate was just 1.6%, likely reflecting the relatively high unemployment rates prevailing in these provinces.

Job vacancy rates and hourly wages, by industry

1999

High vacancy rates in establishments with strong skill requirements

Establishments with indicators of strong skill requirements tended to have relatively high job vacancy rates in 1999. For instance, establishments that implemented an innovation in the period from April 1, 1998 to March 31, 1999 had job vacancy rates of 3.0%, compared with 1.8% for other establishments.

Furthermore, profit-oriented establishments that had a greater-than-average proportion of skilled employees (managers, professionals and technical or trades workers), and that innovated and also introduced a skill-increasing technology reported an even higher vacancy rate, 3.9%.

High vacancy rates in small and non-unionized establishments

Job vacancy rates appeared to be lower among large employers. Establishments with fewer than 100 employees had job vacancy rates of roughly 3.0%, but those with more than 500 employees reported only 1.9% of their positions vacant. Similarly, workplaces belonging to a multi-establishment company reported a vacancy rate of 1.9%, much lower than the 3.1% reported by others.

In unionized establishments, only 1.8% of jobs were vacant, compared with 3.0% in non-unionized establishments.

These differences may reflect a number of factors. First, large establishments and those belonging to a multi-establishment firm have an internal labour market that allows workers to change jobs without changing employers. Second, these establishments, along with unionized establishments, tend to pay relatively high wages.

Both factors are likely to reduce workers' rates of quitting, thus decreasing the number of vacancies created as a result of employees' departure. They may also increase the pool of applicants for a given job opening, leading to lower vacancy durations and, thus, lower vacancy rates.

The joint effect of employer size, union status and industry is substantial. Non-unionized workplaces in retail trade and consumer services industries that do not belong to a multi-establishment firm had job vacancy rates of 5.3%. These workplaces accounted for fully one-third of all job vacancies in the private sector.

Lack of experience, too few applicants cited as problems in filling vacancies

After four months or more, 1.2% of positions were still vacant. The explanations employers cited most often for long-term vacancies were the applicants' lack of experience and that there were too few applicants. However, these two reasons varied depending on the occupational group.

Among managerial, sales, marketing and production positions, for instance, the reason most often cited was applicants' lack of experience; for professionals, technical personnel and the clerical and administrative group, too few applicants was the reason most often cited.

Another reason was lack of education, which was reported frequently (46% of respondents) for having long-term vacancies in technical positions.

These findings must be interpreted with caution, because any of these reasons cited may conceal poor compensation offered for some vacant positions. Furthermore, the reasons for being unable to fill vacancies may vary depending upon current economic growth and the associated labour demand.

The quest for workers: A new portrait of job vacancies in Canada is now available electronically (71-584-MIE01002, free) from both Statistics Canada's Web site () and Human Resources Development Canada's Applied Research Branch Web site (www.hrdc-drhc.gc.ca/arb). A paper version (71-584-MPE, no. 2, $15) is also available.

The research paper Which firms have high job vacancy rates in Canada? (11F0019MIE01176, free) is now available on Statistics Canada's Web site (). From the Our products and services page, choose Research papers (free), then Social conditions. A paper version (11F0019MPE, no. 176, $5/$25), can be ordered from Hélène Lamadeleine (613-951-5231).

For more information, or to enquire about the concepts, methods or data quality of this release, contact René Morissette (613-951-3608), Business and Labour Market Analysis Division, or Diane Galarneau (613-951-4626), Labour Statistics Division. To enquire about related statistics or services, contact the Client Services Unit (1-866-873-8788; 613-951-4090; fax: 613-951-2869; labour@statcan.gc.ca), Labour Statistics Division.