A Shift in the Canadian Job Market?
In a recent article published on December 31st by The Wall Street Journal, the massive downsizing of middle management positions was highlighted. This trend has far-reaching implications for employees and employers alike. As we look ahead to the year, it’s essential to understand how this shift will impact Canada.
The Drive for Efficiency
The drive for greater efficiency, higher profits, increased international competition, and the impact of artificial intelligence have combined to eliminate many middle management positions. In the United States, research firm Gartner found that U.S. managers now oversee three times the number of employees they did in 2017. LinkedIn’s Workforce Confidence survey revealed that close to one third of employees claim to have bosses too stressed to support them.
The Canadian Context
While Canada has been affected by these global trends, our situation is worse. Declining productivity under the Liberal government and the resulting increased productivity gap with the U.S., along with higher taxes, reduced foreign investment, and the Trump government’s emphasis on reshoring have made the plight of Canadian employers even more challenging.
A Shift in Middle Management
Many U.S. employers are demoting their middle managers. In some states, they can do this with impunity. However, in Canada, such demotions would be considered constructive dismissal, allowing employees to resign and sue as if they had been fired. This reality makes demotions unworkable for most companies, making outright termination an untenably costly option.
An Alternative Solution
One alternative seldom used is providing advance written working notice of a downsizing. This approach has many benefits, including:
- Retaining employees: By giving them advance notice, employers can retain valued employees while also reducing the financial burden of severance packages.
- Reducing liability: If an employee finds new employment, their entitlement to severance is reduced.
- Encouraging productivity: Knowing that they will be leaving soon, employees may focus on completing projects and tasks before departing.
The Future of Middle Management
As the trend towards downsizing middle management positions continues, it’s essential for employers and employees to adapt. With fewer comparable positions available, laid-off employees will face greater challenges in securing new jobs. This will result in higher severance pay, further exacerbating the plight of Canadian employers.
Preparing for the Worst
The corporate crisis that this trend is creating will require careful management by governments and employers alike. By understanding the drivers behind this shift and adapting to the changing job market, we can mitigate some of the negative consequences.
Conclusion
The middle management cull is coming to Canada, too. As we navigate these challenging times, it’s essential for all parties involved to be aware of the implications and adapt accordingly. By doing so, we can ensure a smoother transition and reduce the impact on employees and employers alike.
Recommendations
- Stay informed: Continuously monitor industry trends and news to stay ahead of the curve.
- Develop skills: Invest in your professional development to remain competitive in the job market.
- Diversify: Consider alternative career paths or industries to minimize the risk of being affected by this trend.
By taking proactive steps, we can navigate this shift in the Canadian job market and emerge stronger and more resilient.
