WHERE ARE THE WORKERS?: LABOUR AVAILABILITY A GROWING PROBLEM
Labour availability has become a stand out issue over the past year – both in the Tri-Cities and across the province. One in three local businesses in the Tri-Cities say that recruiting and retaining employees is a major challenge, with a further 14% saying it is the biggest challenge they face.
The result? – A quarter of local business owners said that difficulties recruiting and retaining employees is seriously impacting their profitability. Another 37% have felt modest impacts due to labour availability.
Tri-Cities business owners are, unsurprisingly, pointing to housing affordability as the main antagonizing factor. 57% of local respondents to the BC Chamber’s Collective Perspective Report 2019-2020 said housing affordability was a very big or big factor in recruiting and retaining talent.
Affordability is putting pressure on BC’s already low unemployment rate of 5% for November 2019, exacerbating an already tight labour market. The national unemployment average stood at 5.9% the same month (1). As a result, most owner-operators in the Tri-Cities are opting to work more hours than they would like – 61% reported doing so regularly. Meanwhile, 23% of businesses have had to regularly change their growth plans, along with 15% who have had to reduce output.
The silver lining to the tight labour conditions has been its positive effect on wage growth. Stats Canada data shows that BC’s year-over-year wage growth for October 2019 was 3.3% (2), much higher than inflation at 2.2% (3). Meanwhile, average year-over-year hours worked for the same month rose a modest 0.6%, suggesting that longer hours do not account for all the wage growth seen. The results of the Collective Perspective Report support the provincial data. 40% of respondents said they are regularly paying their employees higher wages or overtime due to labour shortages.
Other Key Insights:
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(1) Statistics Canada. “Labour force characteristics by province, monthly, seasonally adjusted.” [both sexes, 15 years and over]. Accessed January 6th, 2020. URL: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410028703.
(2) Statistics Canada. “Year-over-year change in average weekly earnings and average weekly hours.” Accessed January 6th, 2019. URL: https://www150.statcan.gc.ca/n1/daily-quotidien/191219/cg-a001-eng.htm
(3) Statistics Canada. “The Consumer Price Index rises faster in November than in October in nine provinces.” Accessed January 6th, 2019. URL: https://www150.statcan.gc.ca/n1/daily-quotidien/191218/cg-a003-eng.htm