The Middle Management Cull is Coming to Canada, Too
As we step into a new year, Canadian employees should be aware of the looming threat to their middle management roles. A recent article in the Wall Street Journal foretold the massive downsizing of middle management positions in the United States, and it’s only a matter of time before this trend reaches our borders.
The Decline of Productivity and its Consequences
Canada has been struggling with declining productivity under the Liberal government, resulting in a significant gap between our productivity levels and those of the United States. The increased taxes, reduced foreign investment, and Trump administration’s emphasis on reshoring have further exacerbated this issue, making it even more challenging for Canadian employers.
The Rise of Artificial Intelligence
Artificial intelligence has revolutionized many industries, but its impact on the job market is undeniable. Many companies are now adopting AI-powered tools to streamline processes, automate tasks, and increase efficiency. Unfortunately, this shift often leads to the elimination of middle management positions, as these roles become redundant.
U.S. Employers Lead the Way
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. While these numbers are alarming, it’s essential to note that many U.S. employers can demote their middle managers with impunity.
Demotions in Canada: A Different Story
In Canada, such demotions would be considered constructive dismissal, allowing the employee to resign and sue for wrongful termination. This reality makes it challenging for Canadian employers to adopt a similar approach. Instead, they may need to consider more substantial measures, such as advance notice or severance packages.
The Case for Advance Notice
Advance notice can make sense in the context of demotions where the employer wishes to retain the employee and provide them with advance notice of their new role. The length of notice for a demotion is identical to that of a dismissal – typically ranging from 2-24 months, depending on the province. This provision allows employees to find alternative employment if they choose not to accept the change.
The Consequences of Downsizing
As downsizings become more frequent in Canada’s middle management ranks, employers will face significant challenges. With fewer comparable positions available for laid-off employees, severance pay will increase, further burdening Canadian companies. This scenario sets up an unanticipated corporate crisis that the next government may struggle to address.
The Expert’s View
Howard Levitt, senior partner at Levitt LLP, emphasizes the inevitability of this trend. As a renowned employment and labour lawyer with extensive experience in eight provinces, he predicts that an abundance of management layoffs will result in greater severance pay, exacerbating the plight of Canadian employers.
Conclusion
The middle management cull is indeed coming to Canada, too. Employers must adapt to this changing landscape, considering measures such as advance notice or severance packages to mitigate the impact on their business and employees. As we navigate this uncertain future, it’s essential for companies to prioritize communication, transparency, and support for affected employees.
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