The vacancy crisis in Canada’s food and beverage manufacturing industry is costing the industry $3.1 billion annually in lost revenue.
The job vacancy rate, which expresses the number of job vacancies as a percentage of labour demand (i.e. all occupied and vacant jobs), provides insight into sectors and industries that are having difficulty filling job openings. A high volume of unfilled positions can restrict output, leading to lost revenues for businesses and the industry. Assuming a direct relationship between total net revenue and total employment, a single unfilled position in the food and beverage processing industry could cost businesses as much as $190 per day in lost net revenue. FPSC’s 2020 employer survey found that food and beverage processors had an average of six vacant positions. With over 7,600 businesses (excluding those without employees) in the food and beverage processing industry, industry-wide losses from job vacancies could total up to staggering $8.5M in net revenue per day. Assuming that the level of vacancies is constant throughout the year the $8.5M per day becomes $3.1B per year.
The COVID-19 global pandemic has been difficult for businesses with many layoffs andclosures across the country since 2020. That said, the 2020 employment level for food andbeverage processors was at 98% of the 2019 level. For comparison purposes, manufacturing without food and beverage processing was at 91% of its 2019level and the Canadian economy as a whole at 92% of 2019 employment level.
Food and beverage processing has outperformed manufacturing and theeconomy, in addition to this, wages have risen across the food sector by $2.65/hour from 2019. Being designated as essential workers and providing stable employment in aturbulent time has helped the industry retain people, but now the industry is experiencing new challenges as the rest of the economy opens up. Increased competition for workers and changes to workplace norms such as the transition to remote work has increased the difficulties for employers in recruiting and retaining people.
Impact of COVID-19 on employment
How many people does the sector need?
To ensure that Canada maintains its position as a global leader in food production, the industry must recruit tens of thousands of new workers between now and 2025, as well as equip them with an increasingly diverse range of skills and knowledge. FPSC conducted economic modelling on two scenarios:
- “The baseline scenario” is where export growth is tied to a United Nations forecast of world population growth.
- “The growth scenario” is an alternative scenario where the Agri-Food Table’s $85 billion export target is met by 2025.
The hiring requirement for the industry over the 2020-2025 period in the “the baseline scenario” is estimated at about 35,000 (or 12% of the industry’s workforce in 2020). In “the growth scenario” the total hiring requirement rises to 56,000 workers equivalent to 20% of the industry’s 2020 workforce and an additional 21,000 workers over the baseline forecast.
Impact of public perceptions
Public perceptions of working in the sector has a significant impact on the labour market. To understand this better, FPSC conducted a survey in 2018 to gather insights into the perceptions, interests and motivationsof key target audiences: youth, Indigenous People, New Canadians and those with a tenuous connection to the workforce (currently unemployed and/or frequently unemployed). Members of the general public were also surveyed to provide a benchmark.
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