No end in sight for restaurant labour shortages

For six months now, many industries have experienced devastating labour shortages. That remains a major factor for a large majority of restaraunts in October, according to new data.

Alignable’s October Hiring Poll of 3,181 small business owners found that nearly four in five (78 per cent of) restaurant owners say the lack of workers cuts into the number of customers they can serve, as well as their hours of operation, which have been reduced significantly by many restaurants suffering from labour shortages.

Some also report that customers are getting tired of the long wait times and aren’t coming back as often as they would when restaurants are fully staffed and operating normally.

That was reflected in Leger data that showed that 60 per cent of Canadians have experienced a situation where in-person businesses like restaurants/bars, retail and/or grocery stores have been under-staffed in the last three months.

Overall, the Alignable report found that only transportation companies were more affected than restaurants by labour shortages in October.

On top of that basic staffing crisis, nine per cent more small business owners reported needing to pay higher wages for the employees that they can actually find and hire, up to 64 per cent from 55 per cent last month.

For restaurants, October’s 78 per cent figure is up by five per cent, as only 73 per cent of restaurants reported higher employee costs in September. Half of restaurants (49 per cent) paid between 11 and 25 per cent more in wages.

Leger’s consumer-facing data found that Canadian diners are cognisant of this problem.

As for how to solve the issue, 50 per cent of Canadians think that companies could offer better salaries to entice more people back to work at service jobs. Nearly the same proportion (48 per cent) think the best option for companies to deal with employees earning minimum wage is to increase that wage to the level of inflation.

Add in the increased percentage of small businesses reporting that supplies are more expensive than they were before COVID-19 (60 per cent in October vs. 57 per cent in September, per Alignable), and there is a recipe for a stifled recovery moving into November. Leger found 34 per cent of Canadians say the economic factor affecting them most right now is the higher cost of goods.

Further exacerbating the problem, for the second month in a row, 85 per cent of small businesses say they’re having significant trouble accessing the supplies they need and are paying more for what they can source. 

All of this adds up to the fact that only 30 per cent of small businesses are reporting that they’re fully recovered, earning as much if not more monthly revenue than they generated prior to COVID-19. While that’s two per cent higher than September, it’s still five per cent lower than its July peak of 35 per cent. 

Given these statistics, and many more in Alignable’s October Road To Recovery, it’s no surprise to see that the number-one concern among most small businesses in October has shifted from Delta-related government shutdowns to increasing inflation. Nearly half (48 per cent) of all small businesses say inflation is their top worry, up 10 per cent from September.