The Writing is on the Wall
A recent front-page article in the Wall Street Journal predicted a massive downsizing of middle management positions. This trend is not unique to the United States; Canada’s middle management ranks are also facing significant changes.
Declining Productivity and the Resulting Consequences
The Liberal government’s policies have led to declining productivity in Canada, resulting in a widening productivity gap with the United States. Higher taxes, reduced foreign investment, and the Trump administration’s emphasis on reshoring have further exacerbated the situation. As a result, Canadian employers are facing even greater challenges than their U.S. counterparts.
The Rise of Artificial Intelligence
The increasing use of artificial intelligence (AI) has also contributed to the decline of middle management positions. With AI automating many tasks, companies are looking for ways to streamline their operations and reduce costs. This trend is expected to continue in the coming years, with a significant impact on Canadian employers.
Gartner’s Research: A Surprising Reality
According to research firm Gartner, U.S. managers now oversee three times the number of employees they did in 2017. Meanwhile, LinkedIn’s Workforce Confidence survey found that close to one-third of employees claim to have bosses who are too stressed to support them.
The Consequences for Canadian Employers
The consequences of these trends will be far-reaching and devastating for many Canadian employers. With fewer middle management positions available, companies will face significant challenges in adapting to the changing landscape. An abundance of management layoffs will result in a shortage of comparable positions for laid-off employees to secure, leading to greater severance pay and further exacerbating the plight of Canadian employers.
The Unanticipated Corporate Crisis
This trend is not just a short-term issue; it has the potential to create an unanticipated corporate crisis that will last for years. As companies struggle to adapt to the changing landscape, they will face significant challenges in retaining talent and remaining competitive.
Advance Notice: A Solution or a Band-Aid?
One potential solution to this problem is advance notice of demotions. This can provide employees with a reasonable opportunity to find new employment elsewhere, reducing the employer’s liability and creating a more positive outcome for all parties involved.
However, some experts argue that advance notice may not be enough to mitigate the effects of downsizing. With an abundance of management layoffs expected, it is unclear whether advance notice will be sufficient to prevent the consequences outlined above.
The Future of Middle Management in Canada
The future of middle management in Canada is uncertain and challenging. As companies continue to downsize and automate tasks, the demand for middle management positions will likely decline. Employers must adapt quickly to these changes or risk facing significant challenges in retaining talent and remaining competitive.
Recommendations for Canadian Employers
To mitigate the effects of downsizing and maintain a competitive edge, Canadian employers should:
- Develop a comprehensive strategy for adapting to the changing landscape.
- Invest in employee development and training programs to enhance their skills and adaptability.
- Foster open communication with employees to ensure they are aware of company goals and challenges.
- Consider implementing flexible work arrangements and remote working options to attract and retain top talent.
By taking these steps, Canadian employers can position themselves for success in a rapidly changing business environment.
About the Author
Howard Levitt is senior partner of Levitt LLP, employment and labor lawyers with offices in Ontario, Alberta, and British Columbia. He practices employment law in eight provinces and has authored six books, including The Law of Dismissal in Canada.
