Businesses face 'massive' challenge finding workers in Vancouver

Finding cooks and other staff is the bane of restaurant owner Patrick Mercer’s existence.

Mercer is co-owner of Brix & Mortar, a popular restaurant in the Vancouver neighbourhood of Yaletown for nearly 20 years. He’s tried raising wages, offering bonuses and in one case offering free room and board to keep staff, but still he’s still running his restaurant with a skeleton crew.

Ten years ago, he would advertise for a server and receive 100 or 150 resumes. About 30 would be worthy candidates. Today, he gets about four applicants, he says, and none are qualified.

A chef who would have been paid $38,000 last year, now gets $45,000 just to stick around, he said. The job market is so hot that chefs are regularly lured away by higher wages. The restaurant has spent $24,000 so far this year training staff who then quit.

“People are offering stupid money because they’re desperate,” Mercer said.

In the past, he often hired foreign students from Australia to work at Brix, but this year, he hired three and they all quit within a couple months because they couldn’t afford to live in Vancouver any longer.

He closed Mondays in November, simply to give his chefs a day off. He’s thinking about doing that again in February.

Mercer is far from alone. An online search shows more than 200 job openings for cooks in Vancouver.

Food service workers are among the most in-demand employees in Vancouver’s extremely tight labour market, along with technology workers, nurses, and teachers.

Prosperity meets catastrophe

Across Canada, the unemployment rate is the lowest since Statistics Canada started keeping records. If the national numbers are strong, B.C.'s are super-charged. B.C. led the way in 2018 with an unemployment rate of 4.4 per cent, which the Central One Credit Union says is below all other provinces by more than a percentage point. Uncertainty over China, the price of oil and the housing market may be shaking the economy, but employment is going strong in some sectors.

Most employment gains in the province in November were in Metro Vancouver.

For Mercer, the Vancouver housing market is the ultimate cause of employee scarcity.

“Everything else I’ve told you about is a byproduct of housing. Nobody can afford to live here,” he says. “The restaurant scene in Vancouver is on the verge of catastrophe. There will be a market correction, there’s no other choice. … A lot of restaurants will go under.”

He says a sous chef recently moved back to Ontario because he could no longer afford to live in Vancouver. Mercer and his business partner gave him free rent for a month, plus an extra $1,000 to stay for a month while they looked for a replacement.

The average rent in Vancouver now for a one-bedroom apartment is $2,130 a month and $3,230 for a two-bedroom apartment, according to Padmapper, a website that tracks rental prices around the world. The benchmark price of a detached house in Metro Vancouver is nearly $1.5 million and for an apartment it's $664,100, the Real Estate Board of Greater Vancouver says.

Technology companies constrained by access to talent

B.C.'s tech sector is a story of "sky-high opportunity," says the November 2018 British Columbia Technology Report Card by KPMG LLP. The tech sector is the leading economic driver of growth in the province, with more than 10,000 companies and more than 100,000 jobs, the report says. The sector employs more people than forestry, mining, oil and gas and utilities combined and generates 6.5 per cent of the province's GDP, the report says.

But a lack of qualified employees makes growth a challenge.

Jill Tipping is president and CEO of the BC Tech Association, a non-profit member-based organization that works to make B.C. the best place in the world to grow a tech company. She says employment in the tech sector in B.C. grew by three per cent a year between 2011 and 2016, but that growth could have been at least double if more qualified employees were available.

Competition for employees from tech giants like Microsoft and Amazon coupled with Vancouver's high housing prices make it tough to find employees, said Helen Sheridan, senior vice-president of human resources for Stemcell Technologies, which has 1,200 employees. Stemcell is a life sciences company with headquarters in Vancouver that hires scientists, software developers, salespeople, manufacturing technicians and supporting positions in IT, finance and human resources.

"We're not Microsoft, we're not Amazon," Sheridan said. "Getting our brand out there in all of the noise of these large multinational competitors who are bringing their offices here ... is pretty challenging for a Canadian business."

Sheridan has worked in human resources for technology companies in Vancouver for 25 years and she says she can see the landscape rapidly shifting.

"What's changing after all of these years ... is that we now have young people leaving the city because of the housing prices," Sheridan said. "We definitely are seeing a bit of a brain drain to elsewhere in B.C."

Salary expectations are also quickly changing in supporting fields like finance, HR or IT that are portable across industries, Sheridan said.

"Vancouver has always been known as this weird environment where we are paid the lowest in Canada and our cost of living was the highest," Sheridan said. "I can see that changing right in front of our eyes."

Michael Tippett, CEO of Wantoo and a technology entrepreneur with more than 25 years' experience, mostly in Vancouver, says he can't remember a time when it has been so easy to land a tech job or so tough for companies to find qualified employees.

Wantoo, a platform that allows companies to manage customer feedback, is based in Vancouver, but is a virtual office, Tippett said. The employees work remotely from their homes, wherever they live.

"We're starting to see that more and more," Tippett said. "It's kind of a bad thing for Vancouver in the sense that it's pretty easy for people to leave Vancouver and keep their jobs here. We lose a lot of talented people who would ordinarily be working here."

The spread of technology to other industries also adds to the demand for qualified workers.

"Every company is a tech company, so not only are tech companies competing for those workers, but the general business world is competing for those workers as well," Tippett said.

Investing in education for tech workers and getting more women interested in the sector would help alleviate the shortage, Tippett said.

Bruce Ralston, B.C.'s Minister of Jobs,Trade and Technology, says the provincial government is focused on building a strong economy that works for everyone, across all regions of the province. The labour market is expected to tighten in 2019, Ralston said in a statement.

"The Conference Board of Canada predicts that B.C. employment will continue to grow for the next three years, meaning employers in many sectors will continue to have challenges attracting and retaining workers," Ralston said.

He promises that government will try to find areas where it can help fill the labour and skills gaps.

"For example, B.C. has recently signed agreements with the federal government that will see Canada provide more than $2.5 billion over six years for targeted investments in jobs and skills training, and in January 2018, we announced 2,900 new tech-related spaces at post-secondary institutions throughout the province to improve access to training and education," he said. “We are committed to continuing to diversify, to growing and strengthening the economy of the entire province, and to building resilience in a rapidly changing global environment.”

The provincial government has also made some steps towards trying to cool the housing market and improve affordability for both owners and renters, but there's a long way to go.

‘Massive labour market challenges,’ economist says

Bryan Yu, chief economist at Central One, says Vancouver is facing "massive labour market challenges" in terms of trying to find people for jobs.

Yu said food service, technology and skilled construction trades workers are in high demand.

Despite the strong employment numbers and tight labour market, wages aren’t rising much, Yu said. He’s not sure why.

The minimum wage in B.C. went up $1.30 an hour to $12.35. Mercer, the restaurant co-owner, said that increase cost $40,000 off his bottom line.

Brendon Bernard, an economist at Indeed Canada, an online job listings site, said that a recent Bank of Canada business outlook survey found that 37 per cent of companies reported labour shortages.

“That’s the highest share we’ve seen since 2008,” Bernard said. “B.C. is probably leading the way.”

While employees in some job categories like sales and customer service, are in high demand across the country, others stand out in B.C., Bernard said. Jobs in the skilled trades are at the top of his list.

“Even though B.C. home sales have come down, in general this suggests that there is still significant demand for the skilled trades involved in both housing construction and renovation,” Bernard said. Like Yu, Bernard also mentioned food service workers as being in high demand.

“One category that interested me, but I think is consistent with some of the things going on in B.C. is mental health and substance abuse social workers – those job postings are much more prevalent in B.C. than in the rest of Canada and we know B.C. especially is struggling with the opioid epidemic and troubles with homelessness, so we see demand for the kind of workers that can help deal with those problems,” Bernard said.

Let’s talk about police, nurses and teachers

Not everyone is having trouble finding employees.

The Vancouver Police Department says it doesn’t have trouble getting or keeping employees.

“We typically receive very few resignations each year and our hiring / recruiting process is very competitive,” Sgt. Jason Robillard said in an email. “We typically do not lose many officers to other agencies and we aren’t anticipating a change.”

In fact, because the police department offers competitive salaries and benefits, such as a wellness program, the department attracts officers from neighbouring agencies, Robillard said. In 2016 and 2017, it hired 27 experienced officers from other police departments, he said.

It hasn’t been the same story for Vancouver’s teachers. The province has hired more than 3,700 teachers since the B.C. Teachers’ Federation won a landmark court case in 2016 restoring classroom conditions that had been stripped in 2002. That created an employees’ market for teachers, with many of them leaving pricey Vancouver to work closer to home in the suburbs or moving to less expensive areas of the province.

About 100 teachers on call have left the Vancouver School Board in the past two years and at least 125 full-time teachers have resigned or retired this year. The shortage has stabilized, but there are still several teaching jobs posted online, including teachers on call, science teachers and French immersion teachers.

Nurses are also in short supply and the housing crisis hasn’t helped. Christine Sorensen, president of the B.C. Nurses Union, said there is a worldwide nursing shortage that extends to B.C. and Vancouver.

At BC Children’s Hospital, the emergency room has had a 30 per cent job vacancy rate since October and 10 nurses recently resigned, Sorensen said. Some may have resigned due to the high cost of housing, she said, but it’s more likely they resigned due to their workload and being asked to come in and work on their days off.

“Nurses have the ability to go pretty much anywhere in the province and apply for work and find a position, particularly if you are a nurse in a specialty area – the operating room, the emergency room, intensive care – where we are desperately short,” Sorensen said. “Many nurses will relocate closer to home because they can get jobs closer to … where they live so they are not spending so much time commuting and away from family.”

A significant number of nurses are nearing retirement age, so there is also an issue with retention, Sorensen said.

What can be done to address the shortages?

Sorensen said she has been approached by health authority CEOs in the Metro Vancouver area wondering what to do and one suggested providing a housing allowance, something Sorensen supports.

“If professionals like nurses cannot live in the city, imagine how dire it must be for some of our most vulnerable residents,” Sorensen said. “I’m hopeful we can work with the health authorities to provide some sort of incentive to address this for our healthcare professionals. I certainly want to make sure there are nurses there when patients need them.”

The shortages might also be addressed through contract negotiations. The Vancouver Sun reported that a tentative agreement has been reached that would force health authorities to pay nurses an hourly premium if they work in short-staffed units. The strategy is designed to push health authorities to hire more nurses to avoid paying the premiums.

In addition to paying more or providing housing or moving allowances, there are a few other strategies employers can use to attract workers, including offering higher wages and benefits, Bernard said.

“Other ways of navigating a tight labour market include broadening your search of candidates,” Bernard said. “So that might mean taking on someone with a little less experience than you might otherwise. Another option is to search outside of your immediate region and then try to have the new employees relocate to your workplace.”

Of course, with such high housing costs, convincing employees to relocate to Vancouver can be difficult, Bernard said.

He will be keeping an eye out for wage growth in B.C. in 2019.

“Wage growth hasn’t picked up to the level that we might expect given the strength of the job market,” he said.

Mercer has tried all of the above, including paying higher wages. He would like to see the government find a way to reduce costs for restaurants, so they can offer higher wages, especially given they are facing higher minimum wages and the new employer health tax coming next year. He would like to see restaurants be able to buy liquor at wholesale prices, which is done in other jurisdictions, rather than the current retail prices paid in B.C. That recommendation was made by a panel that investigated B.C.’s liquor policy earlier this year and Mercer is hopeful the government will soon make the change.

In the tech sector, Tipping, whose organization wants to make B.C. a magnet for tech companies of all sizes, acknowledges the B.C. government for creating new tech spaces in universities, but says the investment could easily be tripled and graduates would still be gobbled up.

"We, the industry, can hire as many people as you can push out the door," she says. And that's not just computer coders who sit in front of a computer all day -- the tech industry also needs people with marketing and customer service skills, data skills, design skills and senior people who have experience growing a company from the start-up stage, she says.

Government could create more opportunities for mid-career people to transition into technology fields, Tipping said. She's also advocating the federal government continue a pilot project that allows skilled employees to come to Canada.

But the industry can also help itself, Tipping said, by focusing on diversity and inclusion, including women and other people who haven't traditionally worked in the tech industry. By doing a better job of explaining that tech workers are not just computer coders, but are also people who want to solve some of the world's most pressing and interesting problems, more employees will be attracted to the field, she said.

Everyone seems to agree the housing crisis – both the high cost of buying a home and the shortage and expense of renting – is contributing to Vancouver’s labour shortage. What would normally be a good news story about everyone being able to find jobs is transformed when put in the context of no one being able to afford to live in the city. It’s a problem that must be addressed, perhaps with a massive infusion of affordable rental properties on public land, if we want to make sure young people are able to live, work and thrive in our communities and businesses are able to stay afloat.

Tracy Sherlock writes about B.C. politics for National Observer. Send your tips and ideas to [email protected]