The hiring process in Canada is “broken,” with employers saying a number of factors including a lack of qualified candidates are combining to make it challenging to fill roles in the current labour market, according to a recent survey.

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The No. 1 barrier businesses say they face when recruiting new workers is the “poor quality of candidates,” with 47 per cent of employers identifying that as a top-five issue in a survey of nearly 400 employers in April by Recruit Holdings Co. Ltd.’s Indeed, a web-based hiring platform that connects employers with job seekers.

The time it takes to hire was cited by 42 per cent while 40 per cent said competition from other companies. Rounding out the top five were not enough applicants (38 per cent) and too many applicants (24 per cent).

Raj Mukherjee, executive vice-president at Indeed, said there are “systemic imbalances” in the labour market, though its data shows job postings on its website are up 36 per cent since the end of January 2020.

“From an employer perspective, they are not finding the talent they need,” he said. “Our foundational thesis is that’s because the hiring process itself is inefficient and broken.”

Canada’s labour market had been resilient, adding jobs each month since last October until it shed a surprise 17,000 positions in May, Statistics Canada said on June 9. The unemployment rate ticked up 0.2 percentage points, putting the rate above five per cent since December.

The hiring process itself is inefficient and broken

Raj Mukherjee, executive vice-president, Indeed

James Orlando, a senior economist at Toronto-Dominion Bank, said the labour market “had been defying gravity for months and was bound for some giveback” in the face of increasing interest rate hikes by the Bank of Canada.

“The question is now: Is this a one-off or the start of a trend?” he said in a note on June 9, adding he expects the unemployment rate to rise towards six per cent by year-end.

Mukherjee said despite the macroeconomic headwinds, there is still a “tremendous” need to hire in “many” sectors, but companies using digital tools to find candidates often find the online matchmaking between job seeker and employer isn’t as effective as they need it to be.

Indeed launched a new payment model in Canada at the beginning of this year that allows a small-to-medium-sized client to pay to receive successful applications rather than opting to pay for job-posting clicks on the hiring platform site.

Recent job vacancy data, a more lagging indicator than the Labour Force Survey, shows the number of unfilled positions dropped 3.8 per cent in the first quarter this year to 843,200, according to Statistics Canada data on June 20.

It was the third consecutive quarter in which vacancies declined from a record high of 984,600 in the second quarter of 2022, just after the central bank started tightening monetary policy.

In another June 20 report, the agency said almost a third of temporary foreign workers with a bachelor’s degree or higher were overqualified for their current positions.

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