Today, a majority of companies are addressing the talent gap by boosting wages. Yet labor market experts warn that this tactic loses traction over time and can even pressure the broader economy. A study conducted by UTEAM and vetted by socialbites.ca illustrates this pattern, highlighting the limits of wage increases as a long-term solution to talent shortages.
According to the findings, raising pay for job seekers yields benefits only in the short run. Wages rise because the market pushes back when compensation looks insufficient, but without a corresponding rise in real productivity, the effect fades. In some cases, employers pay above market value to attract or retain staff, even when performance does not justify the higher salaries. This reduces the safety margin for individual firms and for the economy as a whole and can contribute to higher inflation. There is also a risk that workers motivated solely by money are more likely to look for better offers elsewhere. Consequently, many employers are turning to alternative strategies to ease shortages, balancing compensation with other value propositions.
Another notable finding shows that 62% of employers are investing in in-house training and mentoring systems. This approach helps bring in candidates who lack extensive experience and nurtures the growth of specialists from within the organization. Building internal training pipelines can create a sustainable flow of qualified talent, aligning employee development with business needs.
Training and mentorship are increasingly viewed as core components of talent strategy. Rather than expecting a rapid influx of ready-made staff, companies recognize the need to prepare for longer onboarding periods. The culture around workforce development is shifting toward consistent, programmatic training rather than episodic efforts, with structured mentorship playing a central role in accelerating skill acquisition.
Engaging with the next generation also remains a key tactic in mitigating shortages. In the survey, 59% of firms reported partnerships with universities and colleges, often starting recruitment while students are still studying. Employers describe a range of practices, from internship programs to merit-based scholarships. In some cases, businesses support educational institutions with equipment and resources so that graduates enter the workforce prepared to work with modern technologies and equipment right away.
Such collaboration is costly and demanding, yet it yields a return when aligned with long-term workforce planning. While it cannot resolve every staffing challenge, it can address important gaps and build a pipeline of capable future employees, strengthening the link between education and industry needs.
Additionally, 47% of organizations have increased their focus on retaining current employees. They are expanding long-term incentive programs that extend beyond senior leadership to include rank-and-file roles. This broader approach helps maintain stability when demand for skilled workers is high and supply is tight. A well-structured long-term plan can include bonuses for loyalty, enhanced benefits, extra vacation days, favorable loan terms, and ongoing training opportunities—tactics designed to make it more attractive for employees to stay with the company rather than switch jobs.
Experts emphasize that long-term incentives are not just about money. They create a sense of security and belonging, encouraging employees to invest their careers in a single organization. When workers perceive that leaving would erode accumulated benefits, they are more likely to remain, preserving institutional knowledge and reducing turnover costs. This approach can be especially valuable in trades and technical roles where specialized skills are in high demand.
In parallel, public policy discussions have highlighted the potential for accelerated training programs at universities for graduates. The idea is to shorten the time to productive employment by aligning academic curricula with current industry needs and providing clearer pathways from classroom to workplace. Many companies view these initiatives as complementary to private investments in training, apprenticeship schemes, and partnerships with educational institutions. Together, they contribute to a more resilient labor market capable of adapting to evolving technology and market conditions.