Fifty-nine per cent of small businesses in B.C. are experiencing a labour shortage — the fourth-highest rate in Canada according to the Canadian Federation of Independent Business.
In November, 55 per cent of small businesses nationwide reported they were unable to find enough staff, the CFIB said Thursday in a new report.
Sixteen per cent were able to cope with that challenge, but at significant additional cost, it added.
“That’s really bad,” said Seth Scott, the CFIB’s senior policy analyst for B.C. “It’s an issue that’s complex. No one is going to be able to figure it out right away.
“There’s some demographic challenges, there’s a mismatch of skills, lack of applicants in general.”
The pandemic did not create the problem, but has exacerbated it, Scott said. In part, COVID-19 has “disrupted established relationships” between employers and employees, according to the report.
Twenty-four per cent of small businesses said their employees switched industries due to the pandemic — a rate that increased to 37 per cent in the social services sector and 48 per cent in hospitality.
Small businesses in Quebec, Prince Edward Island and New Brunswick reported the most dire labour shortages, with 64 per cent, 64 per cent and 60 per cent, respectively.
Amid a labour shortage, in August, a Vancouver restaurant made waves when it posted an online ad for a new dishwasher with a salary of $50,000 per year. That Handi Grill’s ad was successful.
According to the CFIB, more than 80 per cent of businesses affected by labour shortages raised wages this year to solve the problem but found their success rate was a “mere” 31 per cent. Three out of five of those businesses did not find increased wages helped attract qualified applicants.
A report from RBC states the number of job vacancies in Canada jumped by about 22 per cent in the summer as the economy reopened. In June, there were over 800,000 job vacancies in Canada, though the country’s unemployment rate in October dropped to a pandemic low of 6.7 per cent.
Scott said governments must intervene with support for small business.
Examples listed by the CFIB include improved temporary foreign worker and immigration processes, tax credits for on-the-job training, tax relief for workers over the age of 65, and reduced EI premiums for small businesses to help offset the costs of hiring.
“We need to make sure government is not making EI preferable or better than going to work,” Scott added. “Small businesses need staff, they want staff, and to provide services and goods to the community.”
—With files from David Lao