With People Inc.

Decoupled: Wages and CPI are on a break from one another.

by | Apr 9, 2022 | Competition, Human Resources, Labour Market Update, Negotiations, Payroll, Recruitment, Wages

CPI and Wages: With CPI trending between 3.1% and 3.7%, are wages following suit? The answer is no. 

CPI is inflated due to:

  • disruption in energy transition, 
  • increased government spending,
  • cash injections from the Bank of Canada, and 
  • pandemic shifts, 

all of which increase the risk for employers and do not translate to job creators being able to afford increased wages for their employees.

The increased business risk driving increased CPI has significant implications for wage adjustment considerations and collective agreement negotiations.

The path of least resistance, and at times lazy approach labour relations and human resources practitioners take when considering wage adjustment, is blindly following CPI increases. That is precisely the type of thinking that reduces the confidence executive leadership has in labour relations and human resources personnel and reduces their usefulness and effectiveness to the organization.

Wages and collective agreement targets must be driven by fulsome reviews of such adjustments’ affordability, sustainability, and prudence. This analysis and determination must ensure that operations and employment continues to be a going concern, presently and into the future.

CPI and wages are not automatically linked, nor should they be. Human resources and labour relations practitioners would be wise to test the business fundamentals before making promises they can’t keep with their union counterparts. Granting unsustainable wags increases helps no one if it results in shrinking operations and layoffs.

Please visit our home page or our news and knowledge centre for more information.

Respectfully submitted,

Sam Kemble

Executive Operating Officer

With People Inc.

(780) 886-1679

[email protected]

Alberta Labour Wage Settlements and Negotiations Update -Q1 2022

Alberta Labour Wage Settlements and Negotiations Update -Q1 2022

by | Apr 3, 2022 | Collective Bargaining, Competition, Human Resources, Labour Market Update, Negotiations, Payroll, Recruitment, Wages

The Current Economic Environment Introduces Head-Scratcher Interactions at Collective Bargaining Tables

Several economic pushes and pulls create head-scratcher moments at collective bargaining tables as negotiators assess:
  • where the fair deal resides, and
  • how best to communicate that to rank and file members.
This phenomenon presents unique challenges for negotiations conducted by human resources and labour relations practitioners, and union leadership.

Oil’s Influence on Negotiations

Oil prices soften to $100.28, and the WCS price differential increases to $11.90/barrel. Alberta’s overall economic activity is up 4.5% year over year, bouncing somewhat from 2019 and 2020 depressed levels. Overall, these factors send positive messages to negotiators currently in collective bargaining.

Employment Impact on Collective Bargaining

Unemployment decreased to 6.8%, with a 69.4% labour market participation rate and 1.1% population growth yearly. While, on the surface, negotiators view this as a positive trend in collective bargaining, they need to realize there is significant displacement within the labour market. 

Inflation and Negotiations

Those engaged in collective bargaining must realize that inflation pressures are not the result of a growing, healthy economy. Instead, it is the result of commodity pressures, supply chain issues, government policy, regulation, taxes and spending. All of which increase the risk profile for employers.

Earnings, Average Wages and Collective Bargaining

Average weekly earnings are up 3%. A significant portion of that increase results from overtime and not hourly wage increases. Average hourly wages remain unchanged (0% increase) year over year.
The split between earnings, CPI/inflation, and wage rates present an inconvenient truth for negotiators currently engaged in collective bargaining. Now is not the time for a significant wage increase, except for perhaps the lowest earners – to offset growing costs of essential expenses.

Collective Agreement Negotiations

So how have negotiators at collective bargaining tables responded? Alberta’s February Bargaining Update shows 2022 settlements averaging 0.91%, 2023 settlements averaging 1.87%, and 2024 settlements averaging 1.70%.

The gap between inflation and wages is symptomatic of a great deal of increased risk, unfriendly business policy and environment, and policies with the stated goal to make certain activities more expensive for Canadians in support of greening the economy. These upward pressures are not the result of a confidence-inspiring, predictable and healthy growing economy, so employers are appropriately cautious and reluctant to lock into structural operational cost increases.
Respectfully submitted,
Sam Kemble
Executive Operations Officer,
With People Inc.
(780) 886-1679

Canada Labour Market and Employment Update, March 11, 2022

by | Mar 12, 2022 | Attendance, Collective Bargaining, Equity, Human Resources, Indigenous, Labour Market Update, Negotiations, Payroll, Recruitment, Wages

Canada Labour Market

The Canadian labour market increased jobs to pre-pandemic levels in February. Employers did this by adding 337,000 jobs across the country. Factors contributing to the economic surge in jobs recovery included Health authorities relaxed Omicron restrictions based on case count and hospitalization trends. This relaxation enabled employers to open more services and increase operating levels, permitting them to hire and rehire workers on layoffs. 
Public places and spaces open up. Services sectors surged, accounting for much of the gains. This trend is clearly reflected in a 12.6% month-over-month employment increase in the following sectors: 

The private Sector Leads the way in the Canadian Labour Market

Private sector-led growth accounted for 347,000 jobs added in the Canadian labour market. These gains were not evenly distributed, with a high proportion of growth experienced in Ontario and Quebec and prairie provinces lagging in recovery with higher unemployment rates.
Meanwhile, public sector employment levels remain flat. This trend makes sense as public sector employment remained steady during the pandemic and did not experience the layoffs many in the private sector experienced.

Self-Employment Cools

After an initial surge of increased self-employment, many Canadians realize the self-employment life is not for them or as fruitful as imagined. They revert to seeking more traditional employment opportunities.

Canada Labour Market Equity  Improves but Gaps Remain.

Canada’s labour market achieved record-high employment participation rates for core working-age women, and Indigenous and BIPOC populations, but equity gaps remain.
However, older workers are not experiencing the jobs gain recovery and risk being left behind as the employment market transitions, changing skill requirements, and ageism takes a toll on opportunities for this demographic.

No Great Resignation in Canada

Unlike in the United States, mass resignations are not expected in Canada’s labour market, as employees and employers return to work in on-premise, remote or hybrid formats. Employers take a thoughtful approach, offering options and time to adjust to proposed changes.

The Implications

These factors impact the Canada Labour Market in many ways, including adding uncertainty among employees, confusion among recruiters, frustration among hiring managers, and increased risk for employers.

Employees notice their purchasing power shrink and consume news with mixed or nuanced messages about inflation. Messages surrounding the causes of inflation are politically torqued with a spin—objective and unbiased information on the topic is challenging to find. Anxiety is created not only by actual and perceived loss but also by a fear of missing out as news of a tight-labour market comes from loud and vocal stakeholders. Employees agonize over whether they have pressed hard enough to get more favourable terms with their employer and in the labour market. Speculation over the expected length and extent of current inflation levels creates more uncertainty about what people should pursue and how they should position themselves to navigate these conditions.

Recruiters receive cold responses and combative candidates with aggressive positions regarding salary expectations. There is movement in the market, and a mismatch of skills, uncertainty, and physical isolation create communication challenges during the exchanges. As recruiters fall short of meeting fill rates, they seek to increase terms and conditions. Increased rates do not create more candidates when looking in the wrong places. Increased rates do create structural cost increases for businesses.

Hiring managers are frustrated by difficulty managing budgets and risk and delays in recruiting, and employees with demands at times with overtures to leave.

Employers face increased input costs, downward price pressure, uncertain financials, and rough market conditions. The Canada Labour Market, if approached without foresight and sophistication by employers, recruiters and hiring managers, has the potential to exacerbate inflationary pressures as what occurred in the United States.

Visit our News and Knowledge Centre Blog for more articles of interest.
(c) Workforce Delivery Inc. 2020

US Wage Increases Risk Making Inflation Permanent 

by | Feb 27, 2022 | Collective Bargaining, Competition, Equity, Human Resources, Labour Market Update, Negotiations, Recruitment, Welcoming, Workplace Respect

Canada and the United States experienced what the Bank of Canada and Federal Reserve call transitory inflation throughout 2021.

 Without getting into politics, it is clear that this inflation did not result from a stable, healthy, growing economy. It is not business as usual. Aspects of price pressure result from:

  • pandemic pressures,
  • changes within the economy, and
  • supply chain issues.

Price pressure also arises from public policy directions taken during trying times.

United States

Concurrent to this inflation environment, US employers faced labour movement, including resignations in their workforce. Employers experienced job vacancies and labour shortages. Displaced workers scanned job postings. Human resource practitioners and applicant tracking software disqualified them. The workforce movement and misalignment resulted in jobs without people and people without jobs. Absent any more strategic approaches, human resource and recruitment personnel engaged in a wage escalation, rather than focusing on increasing supply.

US human resource practitioners and employers adjusted their recruitment tactics. Sadly, they sought to overcome shortages by pulling primarily one leaver. That leaver was increasing wages. Upping wages did not increase the labour supply. They made the existing workforce more costly to employ.

Companies passed on the increased costs to customers. US employers’ wage increases, structurally increase prices. This wage inflation makes inflation in the US economy permanent.

Canada

For the most part, Canada is not following the same wage patterns as the US. This Canadian trend is a more subdued degree of inflation and very little labour market-wide wage escalation.

Disruption in Canada’s workforce is comparatively less and focused on specific sectors and certain jobs. True, CPI is also up, but it is decoupled from wage increases year over year.

Canadian wage increases do not track CPI. Whether those increases result from collective agreement settlements or through direct negotiations in non-union settings, wage and settlement data confirm this trend.

Permanent Inflation is Regressive

Governments, industry and policymakers should avoid permanent inflation if possible.

Some will say that wide-ranging wage increases are precisely the redistribution society needs. But it is not that simple. Those pursuing such a policy would do so with progressive intentions, resulting in a regressive outcome.

The permanent inflation brought about by broad wage increases will not affect all in society equally. Increased prices negatively affect those who spend most of their income. Furthermore, price increases significantly harm those who spend a higher portion of their income on essential expenses. Price increases are regressive.

A Comment About Wages

Employers should seek mechanisms to react to today’s inflation for those most impacted and smooth the increase over a two or three-year period of forecasted commitments. By forecasting multi-year increases and front-end loading those increases for lower-paid employees, employers can accomplish this.

There is justification for attraction, retention and equity purposes, to embrace adjustments in 2022 for pay bands lower than roughly $25/hour. An example would be committing to 6% over three years, with 3% in 2022, 2% in 2023, and 1% in 2024.

 

For pay bands over roughly $25/hour, CPI prompted adjustments are unnecessary. Employers should avoid tracking CPI for higher-paid employees. Current price increases do not result from a strong and growing economy and coincide with significantly increased business risk and vulnerability. An example for higher-earning employees would be committing to 3.5% over three years with 1.5% in 2022, 1% in 2023 and 1% in 2024.

The above are examples only and overlaid on this needs to be an analysis of each market factor, competition, job classification and sector. There is no one-size-fits-all solution.

Check out our news and knowledge centre for more articles.

Respectfully submitted by Workforce Delivery Inc.

(c) Workforce Delivery Inc. 2022

Employee Secretly Recording Others At Work Results in Termination

by | Feb 23, 2022 | Bullying, Compliance, Equity, Harassment, Human Resources, Labour Market Update, OH&S, Safety, Sexual Harassment, Welcoming, Workplace Respect

I enjoyed watching law and order/crime TV dramas as I grew up. There would be an episode involving a character secretly recording another from time to time.

Then a court would throw out the evidence. Justice denied! It made for heartbreaking yet exciting TV.

Just like many laypeople, that led me to, for a while, believe that recording someone in secret was illegal in every circumstance, or at least would be unreliable as evidence.

Then, inspiring high school and post-secondary educators introduced more nuance. They taught us that recording a conversation was generally not illegal if at least one person recorded is aware of the recording. Like most, I absorbed that into my psyche and moved on.

As an HR practitioner, I have not experienced an abundance of co-worker-to-co-worker covert recordings. When it came up for me, the admissibility of evidence of the recording was rarely the focus.

For instance, an individual recorded roughly 40 hours of his supervisor undermining and directing racial slurs toward him. We didn’t adjudicate the issue of whether the person should have been recording. Instead, the facts backed by the recording motivated us to fix the situation. Fixing the situation included confronting the superiors, firing the supervisor and getting our chequebook to settle the targeted employee’s grievance.

In other files, a person being harassed or intimidated or bullied records another in secret from time to time. In these files, the recording often will assist in credibility assessments when comparing competing testimony from the target and the bully. The necessity for these recordings makes sense, as bullies are sly and often tricky to gather objective evidence of the behaviour.

The legality of the recording is not the only factor to consider in the employment context. The appropriateness of the recording is also an essential factor. A recent BC Supreme Court Case added another nuance. Under this fact set, an employee extensively recorded private and personal conversations with co-workers and supervisors. Findings of fact did not substantiate reasons given by the employee to justify the excessive recordings. The court found that the secret recording activity violated the trust required for a functioning employee/employer relationship and was grounds for dismissal.

Take-Aways

Employers need to tread carefully and cautiously when considering covert recording discipline. Factors such as the extent of the recording and that the recordings included co-workers’ personal information contributed to the court’s decision. Also, the court did not substantiate the reasons the employee relied upon to justify the need to record.

Employers would be well served to get in front of this and consider setting expectations surrounding secret recordings at work by creating a policy.

We recommend legal advice if an employer intends to discipline or terminate an employee recording.

For employees, this feels like it should be a public service announcement. Many are under the impression they can record conversations without negative consequences. That is not the case. And, call me sentimental, but I have this strong preference that when employees behave in a manner that could put their job in jeopardy, they should be aware of that in advance. So govern yourself accordingly.