Three ways Canada’s HR leaders can build resilience in the face of a trade war

Canadian businesses looking to overcome tariff-driven volatility would do well to proactively focus on the talent agenda now. In volatile times, when nothing seems certain, workplace management strategies can help keep businesses running while still building for the future.

People-focused decisions businesses make in difficult times can reverberate through your organization for months and years to come. From job insecurity and stress to dips in corporate growth and spikes in team workload: you must manage dynamics well to preserve workforce trust, mitigate talent loss and preserve the culture that fuelled your success in the first place.

That’s no easy feat for Canadian businesses facing increasing pressure to manage labour — and labour costs — in a market where supply chain, cash flow and customer demand are shifting daily.

How can you balance these competing priorities while continuing to make sure you have the right people to get the job done and forge ahead? Build a plan that’s equal parts strategic and flexible.

Be sure to:
 

Proactively explore options for your workforce

Planning ahead in this way makes for better long-term employee relations. This will look different depending on the nature of your industry — the impact of tariffs, regulatory guidelines, labour market competition — as well as current terms of employment and any collective bargaining relationships.

Start by assessing potential vulnerabilities around unique skills, confidentiality, competition and the duration and extent of relief you may need for the business to succeed. With that scenario planning done, look at all options for managing headcount in the immediate, medium and long term. This stage should include a focus on encouraging creative and productive workplaces and managing those workers who are not meeting workplace requirements. Performance management should not be forgotten. With this focus, organizations can demonstrate continued commitment to excellence.

Next, HR should undertake an audit of current employee terms of employment to determine if there are opportunities to address the changes tariffs will bring to the workplace. That should include asking key questions like whether the organization can legally reduce work hours, combine positions, change duties, use variable compensation or defer payments with temporary incentive plans.

Think through options like:

• Using temporary layoffs to mitigate rolling supply, order or work shortages
  
• Engaging workers through a workshare program that supplements a reduced work week with employment insurance benefits
  
• The potential impact of foreign workers and work permits on these decisions.

You will also want to consider whether voluntary attrition programs could encourage disengaged employees to move on, opening up opportunities for others.

If it’s clear that permanent headcount reduction is required, seek professional advice to ensure applicable provincial, federal and other laws are followed, collective bargaining and employment contract terms are reviewed, and workers are managed in a professional and responsible manner.

Inconsiderate conduct and mistakes can cause reputational damage that will be a challenge when recruiting in the future. Determining your legal rights and responsibilities will strengthen your workplace decisions.
 

1.  Provide consistent good-faith communications.

Tariffs could generate more than a mechanical impact for your workforce. After all, these are real people, navigating the real implications of massive geopolitical and trade uncertainty. Continuing to communicate clearly, respectfully and consistently with your people while navigating this landscape and any potential workforce changes can help keep folks engaged and support lasting employee loyalty. Doing so also enables people to thrive in tough times.

With that in mind, keep weaving your organizational purpose into every aspect of the decisions you make and communicate. Involve employees in discussions and decisions where you can, so people feel they have a voice. Walk the talk when saying people are your greatest asset by using data and robust, transparent methodologies to support fair, equitable policies, processes and workforce actions.

Don’t abandon who you are when times get tough. Double down on organizational ethos to do the right thing both for your people and for your business. Be mindful that with all the uncertainty, it’s hard to predict what future decisions the organization will have to make. Be sensitive to not overcommit or overshare. Communications should be framed as of the date and time shared.
 

2.  Balance short- and long-term needs in your approach.

Many organizations will need to draw on a combination of workforce solutions to maintain operations. Employee population, costs, anticipated impacts, potential tariff drawbacks and government programs each influence these decisions in various ways.

As you work through the talent agenda now, focus on those dynamics — but aim to strike a balance between what you need to weather this storm, and how quickly you’ll want to ramp back up as trade stability eventually returns. Weigh and assess risks carefully, in line with scenario planning, to avoid making short-term decisions that will limit long-term business success.