Hiring staff during a labour shortage

Hiring and retaining staff during the pandemic has been tough. Just ask Jason Schnurr, who has been unable to hire a manager for the surf and sportswear stores he owns in Sauble Beach and Port Hope in Ontario. “We have a manager job that has been open since March that we cannot fill, we just don’t get applications for [it],” Schnurr told Global News. “If we weren’t having the labour shortage, we would have filled this position.”

A CFIB report from December 2021 found more than half of small businesses (55%) cannot find all the staff they need for current operations or to meet new demand. Another 16% of businesses were only able to hire staff by offering wage increases, flexible hours, or hiring bonuses, all of which comes at a cost to businesses.

A long-term shift in the labour market

Is the pandemic to blame for the labour shortage? Not entirely; it’s the pandemic combined with demographic changes.

Pierre Cléroux, vice-president of research and chief economist at the Business Development Bank of Canada (BDC ), says one of the biggest factors in the labour shortage is the aging Canadian population, which sees more employees retiring, with not a lot of younger people starting work to take their place. That means a smaller percentage of the Canadian population is available to apply to jobs posted by small businesses. However, the pandemic has exacerbated this problem. Some Canadians retired early during the health crisis and, during 2020 and 2021, roughly half the usual number of immigrants entered Canada. According to BDC’ research, 20% of Canadians who lost their work during the pandemic changed sectors, with restaurants being one example where, following a roller coaster of openings and closings, workers left to find employment in other fields.

How badly the labour shortage affects your business may depend on your field. Economists from RBC are predicting greater shortages in skilled labour in the industrial sector, along with a shortfall in workers in the travel and hospitality industries.

Employees want salary and benefits

If you’re an entrepreneur, you’re probably asking what motivates employees to stay at a job, and what they’re looking for in their next career.

In terms of retention, the bad news is that 65% of Canadians are seriously considering leaving their position, according to a December 2021 survey by Hays Specialist Recruitment Canada Inc., due to compensation, declining job satisfaction and overall well-being.

An October 2021 survey from Policy Options reported 42% of job-seekers rate salary as the most important factor in choosing their next placement, while 17% look for a good work schedule. A different survey from September 2021 found wages and benefits were the most important factors: 57% of employees say they would like to leave their situation for higher wages, while 32% say more benefits would motivate them to change positions.

How businesses are coping

Small- and medium-sized businesses have been trying a few things to overcome the labour shortage. Here’s what’s recommended by the Business Development Bank of Canada.

1. Hire underutilized workers.

That means being willing to hire youth and immigrants. It also means keeping older workers on the payroll by offering flexibility in work structure and phased retirement.

2. Offer flexible work arrangements.

Telework, flex time and compressed work weeks are draws in today’s labour market.

3. Provide internal training.

While it would be nice if every candidate was ready to roll from the get-go, there might be employees in different roles in your organization who could potentially fill tough-to-fill shoes if they had the right training.

4. Automate certain tasks.

Robot chefs, touchscreen order terminals, chatbots, self-checkout registers, and other forms of automation can help to improve your business’ productivity and free up employees for more interesting tasks.

5. Use a formal hiring process.

Identify your organizational needs, put out a job posting that lists relevant roles and responsibilities, and advertise the position to reach a pool of candidates, then pre-screen candidates and evaluate them before you extend an offer.

6. Offer a total compensation package.

Salary isn’t everything. A total compensation package might include flexible work arrangements, perks and bonuses, paid vacation, health and wellness benefits, a supportive workplace culture, along with diversity and inclusion initiatives.

The labour shortage isn’t going anywhere soon, so businesses must make strategic choices in how to recruit and retain staff. Salary and employee benefits are important ways for entrepreneurs to start to tackle the problem.

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