Labour shortage impacting over half of small businesses: report

Labour shortages continue to hurt businesses across the country, both large and small.

A recent report on labour shortages from the Canadian Federation of Independent Business expressed that 55 per cent of small businesses said they were experiencing labour shortages and difficulties hiring. While 16 per cent said they found success, but faced some challenges along the way. 

Julie Kwiecinski, director of provincial affairs for Ontario, Canadian Federation of Independent Business, said, “increasing wages is not the silver bullet.”

She adds that 82 per cent of the small business survey said they did increase wages to solve the labour shortage problem, 60 per cent of those who raised wages but did not find it helpful. The CFIB reports the main concern is the lack of applicants and not how much they are paid.

“The times we are facing now where you are hearing about the cost of going up by seven per cent next year. Suppose a business was to hire someone and train them. In that case, you need to make sure that person can get in there and roll up their sleeves and go, go, go, especially if the labour shortage affects several positions.”

She says increasing the minimum wage is not the answer to solving the labour shortage issue. 

“The liquor servers wage will be eliminated on January 1st, and that creating a 20 per cent increase in only three months. That is a massive burden on restaurants, especially those who are now having capacity limits reinstated in at least four public health units across the province.”

With government assistance programs halted, CFIB suggests governments provide tax relief for workers who wish to remain employed by making their hours worked taxed free. The other thing that was surprising was automation.

“Higher wages are forcing businesses to get creative by automating. We are not just talking about robots.” Kwiecinski said “it could be automating payroll or using software automation for phone answering. Employee less grocery store, pour your beer bars, replacing servers with iPad in restaurants.”

CFIB suggests stimulating automation through programs or tax credits as a result. 

The full report can be found here.