Staff shortages continue to hurt business

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The retail and the hospitality sectors of the economy continue to suffer because of staff shortages, not just in this part of Ontario, but across the country. A recent study by Statistics Canada on the impact of COVID-19 on businesses in retail trade for the third quarter of 2021 showed that around one-third of retail businesses expect that finding skilled workers, and a general shortage of labour, will be major obstacles in the coming three months. As a result, business growth will be slower than expected, in spite of the opening up of the economy and the easing of almost all restrictions by the end of October. The Stats Can study reported that only about 20% of businesses in the retail sector expect their profitability to increase in that period.

The study showed that “the number of job vacancies in food services and hospitality increased by nearly 15% between the second quarters of 2019 and 2021, reaching an all-time high of 89,100.” Job vacancies in general increased by 24% in Ontario, with even hospitals finding recruitment of skilled staff difficult, leaving nurses, doctors and support staff feeling the stress of longer shifts and more patients per nurse, in addition to the ongoing stress of dealing with a pandemic.

Deloitte Canada is reporting that an estimated 30% of businesses in Canada are reporting staff shortages, and the most affected industries are hospitality, food service, and healthcare. This situation is expected to ease gradually into next year, but shortages in staff “will remain significant for some time”

in part because government financial support programs pay more than many jobs in the retail and food sectors, but also due to more and more workers in those areas shifting to different kinds of jobs. It seems that long days confined to home and away from work has encouraged many Canadians to rethink their careers, and many have opted to return to education as the way forward. The Economist has noted that “most of the growth in Canadian employment in the last decade has occurred in knowledge-based sectors”. While this bodes well for an educated workforce in the future, it also signals a problem for retail and food industry jobs.

In many sectors of the economy, particularly those paying minimum wage, or slightly higher, the challenge will be to compete for a shrinking pool of workers. Many of the businesses affected by this change are restaurants, stores, and other labour intensive enterprises. As these very often are areas with a small profit margin as it is, paying workers higher wages will require higher prices for the service these businesses provide to the public.

The pandemic has had a serious impact on society in many ways, but its effect on the economy is only now beginning to be felt. The ramifications are far-reaching and still largely unknown. So when you find that service in a restaurant is a bit slower than usual, be patient and get used to it. Fewer workers means longer waits in many places, and, as with so much of life today, we need to get used to an entirely new normal.

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