- Supply chain breakdowns: 60% of companies are seeing profits decline.
- Labour shortage: 74% of businesses are resigned to hiring less skilled workers.
- Recruitment and retention challenges are at levels not seen in 13 years.
MONTREAL, May 9, 2022 /CNW Telbec/ - The 13th edition of the STIQ's Quebec Industrial Barometer shows that the problems caused by the labour shortage are the worst in 13 years, based on the indicator's measurements taken over those years. To overcome this obstacle, 15% of SMEs have had to relocate some operations outside Quebec, which resulted in a net loss for the Quebec economy. In addition, 74% of businesses are resigned to hiring less skilled workers. The number of positions to be filled has increased 36% in just one year, with companies averaging 12 vacant positions. 91% of manufacturing SMEs deem recruiting specialized employees to be a critical issue, while 73% see retaining such workers as a significant challenge. These are the highest levels reached since the barometer was first compiled. There has also been a major increase in international recruitment (+11 points) since 2019.
"There are significant consequences for the manufacturing sector," says Richard Blanchet, President and CEO of STIQ. "In this sector, which accounts for 86% of the total value of Quebec exports, 62% of SMEs have lost or turned down contracts, limiting their growth. 30% have cut back on their investments in innovation, which can jeopardize the company's future. Previous editions of the Barometer have shown that innovation and investment are interconnected and improve business performance."
The labour shortage is exacerbating the supply chain disruption issues and having serious impacts on manufacturers. 60% are seeing profits decline, 95% have increased their prices, and 80% have delivered contracts or orders late. There is also a decrease (20%) in the quality of products and services, which can have serious consequences for the end user.
Over the last three years, manufacturer integration of new technologies has not increased significantly. A major reason for this is the labour shortage, since an SME needs more skilled employees to implement new technologies. This is a proving to be a substantial barrier to businesses' digital transformation. New fact: 44% of SMEs flag the magnitude of the technology lag as a bar to integrating new technologies. In some cases, moreover, it can sometimes take several years to fully implement a technology, another factor that can delay integration of technologies.
"A technology divide is materializing: on one hand, businesses that have made little progress on the digital transformation (28%) do not see the issue as very important, whereas, for 80% of companies that sell outside Quebec and 91% of companies that have already introduced digital technologies or plan to do so, digital technologies are a priority," says Mr. Blanchet.
SMEs took advantage of the pandemic to overhaul all of their processes to make them more efficient. This has led to the implementation of measures that will prove positive in the short or medium term. 42% deployed new technology for business development and 70% adopted new human resources management practices to improve their employees' autonomy or well-being. The goal is to promote retention by focusing on such aspects as welcoming living and working environments, flexible hours, training, versatility, accountability, etc. SMEs with 100 to 500 employees or which are well ahead on integrating digital technologies are significantly more likely to have implemented these changes.
In terms of cybersecurity, 88% of manufacturers have taken action on risks. Since one in four businesses has been the target of computer attacks in the past three years, SME managers were surprised that only two thirds of the responding businesses perceive a risk or consider it to be a risk. According to the SME managers, the threat is very real for all companies. However, they feel they are ill-equipped to take action on cybersecurity. They need to be better informed and advised on the matter, to make their companies more aware.
To read the complete survey: STIQ.com (in French only)
Founded in 1987, STIQ is an association of Quebec based manufacturers dedicated to the improvement of the supply chain efficiency and doing so by helping suppliers develop their business, diversify their customer base and identify business opportunities with prime manufacturers. STIQ offers professionals and technical services for suppliers' research, evaluation and assistance as well as organizing a number of networking events.
The Barometer is an annual portrait of the manufacturing sector compiled by STIQ since 2009, using a series of unique and measurable indicators. This objective approach provides an overview of the situation in Quebec's manufacturing sector. This year's Barometer focuses on emerging themes such as the positive effects of the pandemic, supply chains and cybersecurity.
For the 13th year in a row, this exercise was fuelled by BiP Research and consisted of a telephone survey, conducted between January 18 and February 16, 2022, on the status of these indicators in 2021. The survey population consisted of 3,000 manufacturing SMEs located in Quebec, registered in the STIQ database and with between 10 and 500 employees. Some 500 SMEs were surveyed, a representative sample relative to the survey population, both geographically and sectorally, and for firm size. The margin of error is 3.9%, 19 times out of 20.
SOURCE STIQ
Lawrence Esso, for STIQ, 514-690-5660, [email protected]
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