Fifty-five per cent of small firms say they’re struggling with labour shortages
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Small businesses in Canada are struggling with worsening labour shortages and say offering higher pay isn’t doing much to help, according to a new report from the Canadian Federation of Independent Business.
The report, entitled “Labour shortages are back with a vengeance,” paints a difficult picture for Canada’s small firms. A majority or 55 per cent of CFIB’s membership polled in November complained of not being able to either find staff to hire, keep current employees or get them to work hours needed. The pinch is especially bad in Quebec and New Brunswick, where 64 per cent and 60 per cent of small firms, respectively, say they’re struggling.
Certain sectors are also faring worse than others. Small business owners in construction and transportation have been hardest hit, with 74 per cent and 68 per cent, respectively, saying they can’t find the staff they need. The hospitality industry isn’t faring much better, with 65 per cent of businesses unable to fill positions.
To cope, many small businesses have tried to woo workers with wage increases. In fact, 82 per cent of owners who can’t find employees say they’ve hiked pay. But it doesn’t seem to have had the desired effect: 60 per cent of owners who offered more money say they either didn’t get applicants with the right skills or got no one applying at all.
CFIB says that while labour shortages had been an issue prior to 2020, the pandemic has only exacerbated the problem.
“Industries that were locked down for long periods of time, like hospitality, have seen a mass exodus as workers upskilled or switched to other jobs, and virtually all sectors are facing major demographic upheavals with not enough new workers coming in to replace those who are retiring,” CFIB vice-president of national research Simon Gaudreault, in a release.
Indeed, 63 per cent of business owners say they can’t find people with the right skills or experience for vacant positions. Another 52 per cent say they don’t have any applicants at all. Many firms (58 per cent) are blaming government programs for their lack of staff, saying workers prefer to stay on Employment Insurance or the Canada Recovery Benefit instead of working.
Others say wage expectations of potential employees are too high. One reason for that could be a mismatch between education levels of applicants and jobs available. With the majority of vacancies centred in jobs where higher education isn’t necessary, applicants are coming in overqualified. For example, the report says 22 per cent of job seekers in Q1 2021 had a bachelor’s degree or higher, but only 15 per cent of empty roles required such a degree. That imbalance may be leading to higher salary expectations from some that small businesses simply can’t meet.
Pandemic lockdowns also caused a number of workers to exit industries altogether. Twenty-four per cent of owners say they lost employees to other sectors. And it will come as no surprise that hospitality and personal services, both hurt by lockdowns, saw even more people leave. Forty-eight per cent and 37 per cent of employers in those industries, respectively, said they’ve experienced an employee exodus.
While raising wages hasn’t been the solution to staffing shortages for most businesses, some say they’ve found relief with automation or by hiring temporary foreign workers. Indeed, businesses that have invested in automation report an 81 per cent success rate. Those that have turned to temporary foreign workers have a 52 per cent success rate. CFIB says that suggests the program could be expanded to reach other sectors. The lobby group also recommends it be simplified so more businesses can take advantage of it.
In the end, CFIB says governments need to step up to help small businesses address labour shortages.
“(Businesses) are already doing all they can to attract workers,” said Corinne Pohlmann, senior vice-president of national affairs at CFIB, in a release. “But they need governments to do their part by adopting policies that increase productivity, connect job seekers with employers and don’t put the cost of hiring out of reach.”
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A LIFE UNINTERRUPTED Gillian Stein, CEO of camera retail chain Henry’s Enterprises Inc., has come out as the first Canadian chief executive to announce a mental illness diagnosis. Stein, diagnosed 20 years ago with bipolar disorder, decided to open up about her experiences as a way of combating the stigma that still exists around mental illness. Stein says she hopes coming forward will inspire other CEOs to do the same, and says CEOs must recognize the responsibility they have for their employees’ health. Read the full interview from the latest edition of Financial Post Magazine. Photo by Peter J. Thompson/National Post
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This time last year, enthusiasm for Canada’s electric vehicle sector was flying high and stock valuations were soaring. For example, Vancouver-based Ballard Power Systems Inc.’s stock was on fire, surging 157 per cent after rising from $20.93 per share in September 2020 to $53.90 by February 2021. But, a year is a long time and now it looks like the investment bubble around Ballard has burst – and it’s not the only one feeling the pinch. Cleantech firms that experienced huge gains in their share price in early 2021 have also seen their stock prices come crashing down. FP’s Gabriel Friedman has the story .
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Today’s Posthaste was written by Victoria Wells (@vwells80), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
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