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Get creative, small business, to fix worker woes: Study

By John Chilibeck, The Daily Gleaner

Luke Randall co-owns an art supply and toy store in Fredericton where he encourages customers to express their creativity and put on their thinking caps.

He applies the same principle to his business, which survived the pandemic and continues to grow revenue.

“A lot has changed since 2019,” Randall said at ThinkPlay and Endeavours in downtown Fredericton. “It’s challenging. The skills required in the workplace have changed significantly because how we sell things changed. Before, very little of what we sold was sold online. Now we’re very reliant on online sales and online ads. The skills for selling online, shipping and receiving, coding, all those things, you wouldn’t have needed in the old retail space.”

To avoid the same kind of funk many small businesses found themselves in, the owners made sure they automated more processes and trained their staff properly. Today it functions with nine full-time employees, compared to peak employment of 18 several years ago.

“Our staff is smaller than ever and our sales have grown,” he said. “We’ve automated more and more because during the pandemic we had a difficult time finding staff.”

Empty seats

He’s not alone. A new study by the nonprofit C.D. Howe Institute, released Tuesday, speaks at length about worker shortages.

“Empty Seats: Why Labour Shortages Plague Small and Medium-Sized Businesses and What to Do About It,” outlines the situation across Canada.

Although these mom-and-pop operations are the biggest part of the economy and employ 14.3 million workers – eight out of every 10 in Canada – they are faced with some stark realities.

Nearly two-thirds of these businesses have cited a shortage of qualified candidates as the primary cause of their labour woes. According to Statistics Canada, job vacancies increased to a historical high in the second quarter of 2022, exceeding one million.

With record low unemployment rates (4.9 per cent in June and July 2022), the unemployment-to-job vacancy ratio dropped to its lowest-ever level, basically one for one. As a result, jobs stayed vacant for longer, with more than one-third of job openings remaining unfilled for 90 days or more in late 2022.

Wages rising

Employers, mindful of keeping costs down, have raised wages but, crucially, not as high as most workers would like.

In a table that shows the problem in several sectors with high vacancies, the contrast between the minimum pay a worker will accept and what employers are offering is noteworthy.

For instance, the average construction worker expects a minimum of $29.55 an hour, but the average pay only bumped up from $27.50 an hour at the beginning of 2022 to $28 an hour a year later.

In retail, the expectation is $23 an hour, but the pay has only jumped from $17.85 to $19 an hour on average, year-over-year.

Parisa Mahboubi, a senior policy analyst at the institute and co-author of the study, told Brunswick News businesses should consider reaching out to groups that have been overlooked, such as Indigenous people and people with disabilities.

“When there are not enough people applying for a job but employers are asking for a certain number of years of work experience, they should consider hiring someone with less experience and train them,” she advised. “We have untapped potential and there’s a lot of talent out there. Young people, for instance, have high unemployment rates. Even at the peak of shortages, there are certain population groups facing higher unemployment rates. When people are facing high unemployment rates, they get discouraged and leave the labour force. But if there are real opportunities available, with training to do the job, they participate.”

Role of automation

Mahboubi also spoke of the importance of automation, a role governments could help with, chiefly with promotion of the idea to businesses and targeted funding programs to get people the training they need.

For his part, Randall said managers had to dedicate more time to ensuring their staff were up to speed on technology.

With profits slim, small businesses must be lean to thrive, he said.

“Our revenues are up. Now, that being said, post-pandemic margins are tighter, costs are much higher. We are keenly aware as employers we need to keep up with and exceed inflationary pressures so our staff can afford to live. So it’s important for small businesses to find efficiencies. They need to be able to pay themselves and their staff.”