Employers across Canada will cap 2018 as a year of growth with 52% intending to hire permanent staff in the year ahead, according to data from the ninth annual Hays Canada Salary Guide. Nearly the same amount, 58%, plan to take on temporary staff.

Employers said they expect to take on contract and temporary staff to address the need for special skills, but permanent hiring remains a priority within 45% of IT departments and 48% of financial departments.

Survey results also found only 23% plan to give salary raises greater than 3%; instead, they will boost salary offers to entice new candidates — a signal that Canada’s employers are struggling in a tight labor market.

It also found that 82% of employers surveyed said they are suffering from a moderate-to-extreme skills shortage. Nearly three quarters of employers surveyed,73%, said the skills shortage has caused workplace stress/pressure and 60% said it negatively impacts productivity. Thirty-one percent of employers cited fewer people entering the job market as the main reason for the skills shortage.

“Despite 2018 success, the negative impact of talent shortages is at its highest point since 2015,” said Rowan O’Grady, president of Hays Canada. “From an employer’s perspective, the job market is extremely competitive and without the right people in place, next year’s business goals could end up in doubt. So, employers have curtailed spending on existing staff in favor of getting new candidates through the door.”

“The intent may come from a good place, but this is a band-aid solution for a complicated challenge,” O’Grady said. “Without taking a more holistic view of staffing or having smart support and advice, further workforce problems are all but inevitable.”

The 2019 Hays Canada Salary Guide survey was conducted this fall.