Omicron expected to fuel workplace ‘absenteeism’ in January as cases surge

Click to play video: 'B.C. businesses warned to brace for severe staffing shortages'
B.C. businesses warned to brace for severe staffing shortages
WATCH: Local businesses are being told to create contingency plans so they can keep their doors open when employees start calling in sick. Global News Morning talks to BC Jobs, Economic Recovery and Innovation Minister Ravi Kahlon about whether the province is doing enough to help struggling businesses. – Jan 5, 2022

The number of people unable to work because of COVID-19 is likely being underestimated and will rise in the new year, a Canadian economist is warning, putting further strain on businesses already facing restrictions related to the Omicron wave.

Vancouver-based clothing retailer Lululemon Athletica gave markets a sign of the looming impact of isolated workers on Canada’s economy Monday, signaling that its full-year earnings would be on the lower end of expectations thanks to a series of pandemic-related concerns including “limited staff availability.”

Word that shifts are going unfilled at Lululemon follows Friday’s latest jobs numbers from Statistics Canada, which showed more than 55,000 net new positions added in December.

But some economists watching the Omicron wave sweep across the country say other figures in Statistics Canada’s Labour Force Survey could point to a tough month ahead for the Canadian economy.

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Despite the jump in jobs during the typically busy holiday season, total hours worked in Canada saw “little change” from November to December, the agency reported.

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This figure, which accounts for lost hours due to sickness as well as extra hours taken for overtime, is key to measuring Omicron’s impact on the workforce, according to Stephen Brown, senior Canada economist at Capital Economics.

Current case figures in Canada would suggest maybe 0.5 per cent of workers are sidelined with an active COVID-19 infection, Brown tells Global News.

But given the way the fast-spreading Omicron variant has overwhelmed testing capacity in provinces such as Ontario, he believes the rate of “absenteeism” among Canadian workers on any given week is closer to 1.5 per cent.

Metro Inc., parent company of drugstore chain Jean Coutu, said in a statement on its website recently that it’s adjusting staffing models at the retailer to minimize the impact of “absenteeism” on its operations. Other sectors are also needing to adapt on the fly, including airlines cancelling trips without flight attendants available.

Dan Kelly, the president of the Canadian Federation of Independent Businesses (CFIB), says Omicron is a new beast when it comes to workplace disruptions.

“Almost every employer has somebody that may be touched by this, either themselves or a close family member, and they now might need to isolate. … That’s way, way up compared to other waves of the pandemic,” he told Global News on Monday.

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While he applauded policy changes to shorten isolation periods for the virus to five days from 10, Kelly pointed to a lack of clarity around testing procedures in the latest wave as a significant obstacle for businesses who are unsure whether they can plan to have an employee back at work in a week’s time if they’re exhibiting even mild symptoms.

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Many owners are opting to close temporarily rather than attempt to run the ship with a skeleton crew, Kelly said, but he’s concerned that businesses already weakened by successive lockdowns will not reopen at the end of this current wave.

Brown says sectors such as construction and public-facing industries like retail and food services are going to feel outsized impacts from even marginal reductions to staff, depending on where they’re hit.

“If you’re a restaurant and your two chefs have got COVID, then you need to close the restaurant, even if the rest of your staff are absolutely fine because no one’s cooking. So that’s where the issues lie,” he says.

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Brown expects employment figures in January will show a reduction in total hours worked and possibly net jobs as well, with Capital Economics trimming its gross domestic product projections for the first month of 2022.

Many businesses forced to close or reduce their hours due to lack of staff or other pandemic-related pains are eligible for support such as the new Hardest-Hit Business Recovery Program.

“If they have a revenue fall, for whatever reason — and a shortage of workers could be that reason — they could be covered,” Finance Minister Chrystia Freeland told reporters last week.

Brown believes current supports should be sufficient to get a majority of retailers and others affected by restrictions through a difficult first quarter of the year.

Brown said that while most businesses should be able to subsist on the current government support program, he sees pain points on the horizon when government support lifts and the Bank of Canada raises interest rates, a move his firm projects for April.

That’ll hit hard the businesses that took out loads of debt to survive the Omicron wave, he warns.

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According to CFIB figures, the average small firm has taken on $170,000 in COVID-19-related debt.

Kelly said he’d like to see the Canada Emergency Business Account program, with forgivable loans built into the relief, reopened to help alleviate the burden.

— with files from The Canadian Press

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