Insights on Canadian Society
Long-term job vacancies in Canada

Introduction

Businesses invest time and money to attract and hire candidates who possess the skills needed to carry out the duties of the positions they want to fill. Some positions require minimal skills, experience or education, while others require specific knowledge and skills, making them more difficult to fill. For businesses, it is important to understand the factors that affect the duration of vacant positions since long-term job vacancies can lead to additional costs and challenges (e.g., decreased production or lost business opportunities). For workers, a better understanding of the characteristics of long-term job vacancies can help them make better decisions about training and career choices.

The duration of job vacancies varies depending on economic and labour market conditions.^{Note 1} When the economy is doing well and approaching its full employment potential, the labour market tends to tighten up. Fewer people are looking for jobs, and there is more competition between employers as businesses expand and increase their workforce, a phenomenon referred to as a congestion effect. As a result of these factors, finding new employees takes longer.

This effect is even more pronounced among businesses that are seeking skilled workers.^{Note 2}  Other studies have shown that the duration of a vacancy is positively correlated with more demanding hiring criteria such as age, level of education and years of required experience.^{Note 3} Positions left vacant for longer periods are also more likely to be removed from the market prior to being filled.^{Note 4}

Sometimes, vacant positions can be difficult to fill because of the type of work required^{Note 5} or working conditions (work schedule, wages and benefits). Jobs that involve working at night or performing dangerous tasks are examples of positions that are more difficult to fill. These types of positions are not a good fit for everyone, and employers must often provide additional benefits in order to attract a sufficient number of candidates.

Finally, positions can be more difficult to fill when the demand for certain skills or educational requirements exceeds the supply—that is, when there is a labour shortage. In such cases, employers may compete between themselves to select the best candidate, which may result in higher offered wages and in a longer period of time to find qualified candidates.

The issue of long-term job vacancies has not been studied recently in Canada, largely because there was a lack of detailed data on job vacancies.^{Note 6} This situation changed with the introduction of the Job Vacancy and Wage Survey (JVWS), which collects data on the characteristics of job vacancies in Canada, including the number of days that employers spent recruiting (see Data sources, methods and definitions.) In this study, a long-term job vacancy is defined as a position for which recruitment efforts had been ongoing for 90 days^{Note 7} or more on the day of the survey.^{Note 8}

The following questions are examined in the study:

1. What is the prevalence of long-term job vacancies in Canada?
2. How do long-term job vacancies differ from other vacant jobs?
3. Is there a link between the duration of the vacancy and the offered wage?

Long-term job vacancies represent 9% of all vacancies

According to a previous study, the most common reasons provided by employers for long-term job vacancies were a smaller pool of candidates and a lack of experience among applicants.^{Note 9} Even though vacancy duration should not be used exclusively to identify sectors where labour demand exceeds supply, it can offer a cautionary tale for those sectors.^{Note 10} When labour demand increases, the number of unemployed workers often declines which, in turn, brings an increase in the duration of job vacancies. When this happens, the probability of a position remaining vacant long enough to be observed increases,^{Note 11} which exerts upward pressure on vacancy rates (all else being equal).

In 2016, the number of positions vacant for 90 days or more averaged 35,200^{Note 12}, representing about 9% of all job vacancies in Canada (Chart 1) and 0.23% of total labour demand (i.e., the total number of filled and unfilled positions in Canada). The results were similar in 2015.^{Note 13}

Data table for Chart 1

Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1. The information is grouped by Number of days the position has been vacant (appearing as row headers), 2015 and 2016, calculated using percent units of measure (appearing as column headers).

Number of days the position has been vacant	2015	2016
	percent
Less than 15	28.2	28.1
15 to 29	21.2	22.1
30 to 59	15.4	15.6
60 to 89	5.6	5.6
90 or more	8.7	9.3
Note: The percentages do not add up to 100 because vacant positions for which employers are constantly recruiting have no duration. Source: Statistics Canada, Job Vacancy and Wage Survey, 2015 and 2016.

Long-term job vacancies, however, do not affect all regions of Canada and industries in the same way. Regional differences are examined in the next section.

Long-term job vacancies are more prevalent in the North, in oil-producing provinces, and in British Columbia

The proportion of long-term job vacancies varies by province and territory. In 2016, the percentage of positions vacant for 90 days or more varied from less than 6% in Prince Edward Island to nearly 17% in Nunavut (Table 1). In general, there was a higher percentage of long-term job vacancies in the territories (Nunavut, the Northwest Territories and Yukon), which also had the highest percentages of workplaces reporting long-term job vacancies. Long-term job vacancies also represented a larger proportion of vacant positions in the oil-producing provinces (Alberta, Saskatchewan and Newfoundland and Labrador) and in British Columbia.

In the territories, long-term job vacancies did not only affect a higher percentage of workplaces, but each workplace also reported a higher proportion of long-term job vacancies. Factors that may contribute to labour shortages in this part of Canada include remoteness from large urban centres and greater challenges in finding workers in this part of the country.

When expressed in relation to total labour demand, the rate was also higher in the North. In Yukon, the Northwest Territories and Nunavut, long-term vacancies represented 0.42% to 0.50% of total labour demand in those parts of the country. Among the provinces, British Columbia had the highest rate (0.33%). The lowest rate was in Prince Edward Island, where long-term job vacancies represented 0.11% of total labour demand.^{Note 14}

The territories, however, represent a small fraction of Canada’s long-term job vacancies with 1% of the total in 2016. Much like total vacancies, most long-term job vacancies could be found in Ontario (41%), British Columbia (20%), Quebec (16%) and Alberta (13%).The disparities between provinces may reflect other regional differences related to occupations and industries. These differences are examined in the next section.

The prevalence of long-term job vacancies is higher in the health care and social assistance and professional, scientific and technical services sectors

In 2016, the health care and social assistance sector (14%) and the professional, scientific and technical services sector (11%) had the highest prevalence of long-term job vacancies (Table 2).^{Note 15} The professional, scientific and technical services sector also posted the highest long-term job vacancy rate (0.31%). The lowest long-term vacancy rate was in educational services, which represented 0.07% of labour demand.

Long-term job vacancies also varied by occupation. Those in health (16%), management (16%) and natural and applied sciences and related fields (14%) had the highest proportions of long-term job vacancies (Chart 2). For these occupations, the percentage of such vacancies was approximately three times higher than the proportion observed for occupations in sales and services (5%). Such results reflect the aging of the population, which exerts upward pressure on the demand for health services, and could possibly reflect the importance of scientific and management skills in the Canadian labour market.

Data table for Chart 2

Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2. The information is grouped by Occupational category (appearing as row headers), Percent (appearing as column headers).

Occupational category	Percent
Sales and service	5.2
Art, culture, recreation and sport	6.5
Manufacturing and utilities	7.2
Business, finance and administration	7.3
Education, law and social, community and government services	8.0
Natural resources, agriculture and related production occupations	8.4
Trades, transport and equipment operators and related occupations	9.2
All occupations	9.3
Natural and applied sciences and related occupations	13.6
Health	15.6
Management	15.6
Source: Statistics Canada, Job Vacancy and Wage Survey, 2016.

The proportion of long-term job vacancies was also calculated for each occupational skill category. To do so, job vacancies were divided into four broad categories: management positions (senior and intermediate), positions requiring a university education (professionals), positions requiring a college education (technical personnel and supervisors) and positions requiring a high school diploma or less (support staff).

The results indicate that management and professional positions were the most likely to remain vacant for 90 days or more (Chart 3). The percentage of long-term job vacancies for management positions (16%) was nearly three times higher than the rate observed for support staff (6%). Among health occupations, more than 1 in 5 (22%) vacant professional positions were long-term vacancies while less than 1 in 10 (8%) vacant support staff positions were long-term vacancies.

Data table for Chart 3

Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3. The information is grouped by Skill level (appearing as row headers), Percent (appearing as column headers).

Skill level	Percent
Support staff	6.3
Technical personnel and supervisors	11.1Note *
Professionals	14.2Note *
Senior and intermediate managers	15.6Note *
Note * significantly different from reference category (support staff) (p < 0.05) Return to note * referrer Source: Statistics Canada, Job Vacancy and Wage Survey, 2016.

Large workplaces are more likely to have long-term job vacancies

In 2016, the highest prevalence of positions vacant for 90 days or more was found in larger workplaces^{Note 16} (500 employees or more), which posted a 14% long-term vacancy rate. In comparison, the proportion of positions vacant for 90 days or more was 6% in workplaces with 20 to 99 employees, 9% for those with 100 to 499 employees, and 10% in workplaces with less than 20 employees (Table 3).

Workplaces with less than 20 employees, however, had the highest long-term vacancy rate (0.30% of labour demand). Since smaller workplaces do not have the same human resources or staffing recruitment tools as larger ones, it is possible that smaller workplaces face greater recruitment or hiring challenges. Small companies also have higher staff turnover rates than large businesses,^{Note 17} which increases the probability that they have to recruit for positions that take longer to fill.

While smaller workplaces represent the majority of Canadian workplaces,^{Note 18} relatively few had vacant positions for 90 days or more (Chart 4). In 2016, 1% of workplaces with less than 20 employees had at least one long-term vacancy, while 8% had a vacant position for less than 90 days and 91% had no job vacancies.

Data table for Chart 4

Data table for Chart 4 Distribution of workplaces^{Data table Note 1} by job vacancy situation and workplace size, 2016
Table summary
This table displays the results of Data table for Chart 4 Distribution of workplaces by job vacancy situation and workplace size. The information is grouped by Job vacancy situation (appearing as row headers), Workplace size, Less than 20 employees, 20 to 99 employees, 100 to 499 employees and 500 employees or more, calculated using percent units of measure (appearing as column headers).

Job vacancy situation	Workplace size
	Less than 20 employees	20 to 99 employees	100 to 499 employees	500 employees or more
	percent
At least one job vacancy was vacant for 90 days or more	1.0	3.2	11.6	27.6
All job vacancies were vacant for less than 90 days	8.1	30.3	51.2	54.1
No job vacancies	90.8	66.5	37.2	18.3
Note 1 The unit of analysis is the workplace. The calculation is based on all workplaces. Return to note 1 referrer Source: Statistics Canada, Job Vacancy and Wage Survey, 2016.

Among larger workplaces, 28% had a least one position that had been vacant for 90 days or more, and 18% had no job vacancies. This result is not surprising, given that larger workplaces may be more likely to fill highly skilled positions, which typically take longer. Larger workplaces may also have more rigid hiring processes.^{Note 19}

Positions with higher education and experience requirements take longer to fill

Previous studies have indicated that it takes longer to fill positions with a high level of required education and work experience.^{Note 20} Not only are such qualifications more difficult to find, but employers looking for more advanced skills would be more likely to use a more comprehensive hiring process in order to evaluate the candidates. They are more inclined to spend more hours per candidate^{Note 21} and on average they interview more candidates before making a job offer.^{Note 22} This cautious approach to candidate selection can in large part be explained by the high cost of terminating a qualified worker and the productivity losses that result from matching the wrong person to a job. At the same time, candidates with higher levels of educational attainment are more likely to receive a large number of job offers and are less likely to accept a job offer than their less-educated counterparts.^{Note 23}

In 2016, nearly one-quarter (23%) of long-term job vacancies were positions for which the employer did not specify any educational requirements (Table 4). However, the prevalence of long-term job vacancies was higher among positions requiring postsecondary education. Among vacancies for jobs requiring a bachelor’s degree, 15% were long-term job vacancies. For positions requiring a graduate degree, the corresponding proportion was 19%, which is three times higher than the proportion recorded among positions with no educational requirements (6%).

Similar trends can be observed for jobs requiring professional certification or work experience. Among vacancies for positions requiring at least eight years of experience, 18% had been vacant for 90 days or more—double the percentage obtained for all vacancies.

Factors related to longer vacancy times among vacant positions

The findings presented in this section are from a logistic regression model. With this methodology, risk factors affecting the probability that a vacant position will be a long-term vacancy can be examined simultaneously. The dependent variable is equal to 1 when a position has been vacant for 90 days or more; otherwise it is equal to 0. The model takes into account several risk factors related to the local labour market (e.g. unemployment rate), workplace characteristics (e.g., industry, size), and the position to be filled (e.g., occupation type, educational requirements).

In general, the same trends observed in the descriptive analysis were found. The province, workplace size, educational requirements, work experience requirements, and occupational category were all significantly associated with the probability of a position being vacant for at least 90 days, even after holding other factors constant (Table 5).

The probability of a position remaining vacant for 90 days or more was significantly higher in the territories, and in British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador. This raises the possibility that the characteristics of these regions and of the local workforce, along with provincial regulations and local economic fluctuations, influence the length of time that positions remain vacant. For example, in the territories, it is possible that remoteness from urban centres plays an important role and slows the migration of workers toward that part of the country.

As observed in the descriptive analysis, occupations in management, health, and natural and applied sciences had a significantly higher probability of having long-term job vacancies.^{Note 24} However, the regression results indicate that the probability of long-term job vacancies was significantly lower for the professional and technical services sector. This finding is contrary to the observations made during the descriptive analysis and is probably attributable to the fact that a large number of occupations in natural and applied sciences can be found in this sector.^{Note 25}

All else equal, workplace size remains an important factor. This result supports the view that the duration of a vacancy is not solely linked to composition of employment within large businesses, but also to factors that may be more specific to large firms, such as a longer hiring process. Finally, as observed in the descriptive analysis, a significantly higher probability was also observed for positions requiring a certain level of educational attainment or more years of work experience.

Offered wages are higher for long-term job vacancies

Offered wages are an important indicator of the working conditions with potential employers. According to economic theory, employer and worker behaviours are closely related and the cost of labour is determined by variations in labour supply and demand. Employers who are experiencing a rising demand for their products or a labour shortage in certain key occupations should be more inclined to offer higher salaries and negotiate advantageous work arrangements.

In 2016, employers were willing to pay $23.61 per hour on average to fill long-term vacancies compared with $19.63 for positions vacant for less than 90 days, amounting to a difference of about 20 % (Table 6).^{Note 26}

Differences in the characteristics of long-term job vacancies could explain the observed wage gaps. More particularly, long-term job vacancies are more likely to be positions with a high level of required education, which tend to pay more.

In most cases, however, offered wages are higher for long-term job vacancies than for positions vacant for less than 90 days, regardless of sector, occupation, educational requirements or required work experience. The wage gap varied depending on the characteristics of the vacant positions. This finding applies to both full-time and part-time positions across the entire period for which data were collected. The gap, however, is smaller when only full-time positions are considered.

Yet, the largest wage gaps (as a percentage) were not necessarily observed in the sectors or occupations with higher numbers or prevalence of long-term job vacancies. In 2016, the largest gaps between long-term job vacancies and other job vacancies were in the manufacturing (32%) and transportation and warehousing sectors (33%). The health care and social assistance (21%) and professional, scientific and technical services sectors (18%) ranked fourth and sixth, respectively.

With regard to required work experience, the salary gap for long-term job vacancies for positions requiring less than one year of experience was nearly five times higher (27%) than the gap observed for positions requiring eight or more years of experience (6%). This is despite the fact that there is a higher prevalence of long-term job vacancies among positions requiring eight or more years of experience.

It may be that salary gaps are more closely related to the characteristics of the long-term job vacancies than to their prevalence. For example, there may be a higher prevalence of positions offering less attractive working conditions (such as hours of work, work environment and types of duties) among long-term job vacancies with lower educational or work experience requirements. In such cases, better wages are often offered for this type of position to compensate for the unpleasant aspects of the job and to attract a sufficient number of applicants. In contrast, salaries may be more rigid for positions requiring an elevated level of education or experience.

To measure the extent to which the duration of vacancies affect the hourly wage offered by employers, a linear regression model was estimated with the offered wage as the dependent variable. Two models were estimated. The first model included the duration of the vacancy as the only variable, whereas the second model added several other control factors related to the region, job seasonality, the local labour market (unemployment rate, activity rate, vacancy rate), workplace (size, sector), job characteristics (occupation, required skill level) and requirements in terms of education and experience. Separate models were estimated for all positions and for full-time positions.

The results indicate that most of the observed salary gap (slightly more than 80%) can be explained by differences in the characteristics of the vacant positions, which is not surprising since there is a high prevalence of long-term job vacancies among well-paid occupations.

However, even after taking the differences in characteristics into account, the offered hourly wage for full-time positions vacant for 90 days or more was 5% higher than the offered wage for positions that had been vacant for less than 15 days (Table 7). Thus, an employer who offers $20 per hour^{Note 27} for a full-time position that has been vacant for less than 15 days, would typically offer one more dollar per hour for the same position when the vacancy duration is at least 90 days. The wage advantage of long-term job vacancies over positions that have been vacant for less than 15 days was 4% when all positions were considered (i.e., part-time and full-time positions).

Conclusion

The duration of job vacancies provides information that may be useful for understanding future fluctuations in labour demand. For individuals seeking their first job or looking to make a career change, identifying which sectors are growing or which have insufficient labour supply may be crucial in determining their field of study. For employers, a better understanding of factors that cause long-term job vacancies could translate into improved hiring strategies that could significantly reduce the time it takes to fill a position when there is a labour shortage or when they plan to expand.

This article presents a profile of long-term job vacancies in Canada and the associated risk factors. In 2016, 9% of Canada’s 377,500 vacant positions remained unfilled for 90 days or more. Although long-term job vacancies occur in all occupations and all regions, their prevalence varies according to their various characteristics. The study’s findings reveal, for instance, that there is a higher prevalence of long-term job vacancies in the territories, in the oil-producing provinces and in British Columbia. There is also a higher percentage of long-term job vacancies in health care, management and professional positions, and in positions requiring a high level of education, more work experience or professional certification.

Lastly, the findings of this study indicate that there is a link between the offered hourly wage and the duration of the vacancy. The average hourly wage for long-term job vacancies is significantly higher than the average hourly wage of positions vacant for less than 90 days. The salary gap persists when differences in the characteristics of long-term job vacancies and other vacant positions are taken into account. These findings support the conclusion that employers are willing to offer higher wages for a comparable position when it remains vacant for 90 days or more.

Manon Langevin is an analyst for Statistics Canada’s Insights on Canadian Society.