Job vacancies are falling – but not the sky

A recent study suggests that open jobs in Nova Scotia are disappearing.

The study, ‘Job vacancies, third quarter 2016,’ published by Statistics Canada on Jan. 25 reports on the job vacancy rate, or the percentage of payroll jobs not currently filled, across the country. In Nova Scotia the number was 2.3 per cent during the third quarter of 2016. That figure accounts for 9,075 open jobs in the province, which is down from 11,985 vacant jobs in 2015.

The report was compiled using responses to the Job Vacancy and Wages Survey, which is randomly sent to employers nationwide.

“From an employer perspective, it shows the number of unfilled positions as a share of total payroll employment,” says Fred Bergman, a senior policy analyst with the Atlantic Provinces Economic Council.

Job vacancies are “just one way to measure employee turnover,” says Bergman. Jobs could open when employees find another job, move, retire and so on.

With Canadian vacancy rates at 2.5 per cent in 2016, Nova Scotia’s vacant job rates roughly match the national trend. The study notes that, nationally, there was “little changed compared with the third quarter of 2015.”

Alex Whalen, operations manager with the Atlantic Institute for Market Studies, thinks the study reinforces general marketplace trends, which he says is reassuring.

“In the labour market, we see regular fluctuations from quarter to quarter,” says Whalen. “Fewer job vacancies means jobs out there are being gobbled up. You generally want to look at unemployment rate, and Nova Scotia is getting healthy.”

However, Whalen says a huge gap between certain industries may indicate a challenge approaching the province.

The sales and service industry has the most vacancies of any occupation at both the national and provincial levels. In Nova Scotia, there were 3,585 vacancies in 2016 and 5,270 vacancies in 2015.

That compares to only 970 Nova Scotian vacancies in 2016 and 1,635 vacancies in 2015 in the next most open industry: trades, transport and equipment operators.

“The vacancies by sector in sales and services are three times higher than the next,” says Whalen. “Probably speaks to lower wages, but there’s going to be a real labour shortage in Nova Scotia. (There is a) demographic cliff because the population is aging, young people are leaving and the lower-end jobs are at a large shortage now.”

Bergman explains ‘lower-end jobs’ might be the kind held temporarily by more transient workers, such as students temporarily studying in a city or people switching careers.

Though Bergman says vacancies indicate employee turnover within the industry, Whalen has a different view. Whalen says high numbers of vacancies that are left unfilled each year could indicate a population is shrinking, rather than growing to fulfill those necessary but lower-paying positions.

Whalen’s reference to earnings can be found in the Stats Canada study as the average hourly wage for a vacant service job in Nova Scotia was $12.25 in 2016. The national average for the same industry was $13.35 in 2016, which is significantly lower than the overall national average of $19.80 across all job vacancies.

Bergman says jobs with lower wages might use incentives like tipping to attract workers to positions. However, if the pay still isn’t enticing enough, positions may experience a shortfall in labour supply, as people look elsewhere to earn a living.

The report mentions that broad vacancies exist in the sales and service industry across Canada, with almost 145,000 positions such as cashiers, shelf stockers and clerks left available.

Bergman cautions that the study is not only complex, but also only a few years old and therefore unproven. This means it can’t quite be compared to other data sets yet.

“When you’re trying to compare results from this survey to another large labour indicator such as the Labour Force survey, it becomes a bit more fuzzy,” says Bergman.

The Labour Force survey is “household-driven” and “from the employee rather than employer perspective,” says Bergman. He explains that the Job Vacancy and Wages Survey is still “fairly new” but that Stats Can will find out “how to link it to other economic indicators.”

Whalen also wants to see how the market will stabilize, but doesn’t want to lose sight of general growth.

“In a general sense, it’s a cyclical thing to play out,” says Whalen. “I stress that we need to focus overall, not just on derivatives of the bigger picture.”