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Reopening businesses struggling to lure staff back to work
TORONTO -- Jessica Zimmermann desperately wants her employees to return to her vintage shop so that she can get back to purchasing inventory and running the business and maybe take a day off here or there.
But her employees either don’t want to come back at all or only want to work a fraction of the hours they worked before.
A number of Canada’s leading business groups say their members are struggling to recall workers who are collecting government pandemic relief benefits.
“We fully expect that for the foreseeable future we are going to have a high level of unemployment but also a shortage of labour,” Dan Kelly, president of the Canadian Federation of Independent Business, told CTVNews.ca in a phone interview from Toronto.
If employers can’t convince the workers they need to return, that will be a massive drain on an economy trying to get back on its feet, he says.
“CERB was designed in the middle of a pandemic as emergency relief for those with no ability to earn an income. But it is not designed for a recovery.”
TAKING THE SUMMER OFF
About one-third of businesses surveyed by the CFIB reported that they are struggling to get workers back into their pre-pandemic jobs.
The organization did not ask the reasons for that, but Kelly believes the $2,000-a-month Canada Emergency Relief Benefit, fears about the health and safety of returning to work and responsibilities at home to care for children or elders all play a role.
“Some people are doing a risk-reward calculation and comparing getting $2,000 to stay at home or making $2,500 to go to work full-time,” said Kelly.
“Many employees have told us their employees are saying they are planning to take the summer off and to check back with them in September.”
The Canadian Chamber of Commerce is hearing the same story from employers, especially those in agriculture, retail and food services, says Leah Nord, senior director of workforce strategies and inclusive growth.
She says having to recruit and retrain new employees is an expensive and time-consuming drain on businesses that are already severely struggling.
“CERB was important to get through that lockdown period, but we have to shift our mindset to learning to live with COVID-19,” she told CTVNews.ca in a phone call from Ottawa.
“We need to instil confidence in employees that they are safe to return to work.”
New Brunswick Premier Blaine Higgs said last month that he had hoped to see more of the province’s 70,000 unemployed residents return to work as the economy reopened.
"Do I feel that the federal program of paying people for four months to stay home and not need to even look for a job? Yup, I think that has been a factor and it's been one we've discussed across the country,” he said at the time.
DOING THE WORK OF SIX
Zimmermann, who owns Bungalow in Kensington Market in Toronto, says she, her business partner and a friend working a couple of days a week are doing the work of six employees. One full-time employee wants to work only one day a week, another wants to come in one day a week instead of three. One full-time person doesn’t want to come back at all.
“I understand that people don’t want to come back to work. I completely sympathize with them, but I don’t need people who want to work one day a week. I need full-time,” said Zimmermann.
“I need staff now to try to get ahead.”
Zimmermann says she has followed all public health guidelines to reopen her store, including physical distancing markers, disinfection of surfaces and change rooms after use, the provision of hand sanitizer, and she’s providing masks and shields for staff.
Her sales are less than half what’s normal and another round of rent is looming. She says she simply can’t afford the time and cost of training new employees right now.
There is no data to understand how many people may be choosing CERB over their job, says Mikal Skuterud, an economics professor at the University of Waterloo. He said it’s possible many Canadians are determining that the risk of returning to work isn’t worth the reward, but that decision can have long-term consequences.
“What worries me most is that the longer you’re out of work, the harder it is to get back in.”
MAKING RECOVERY DIFFICULT
The Trudeau government has made clear that Canadians collecting CERB are expected to return to their jobs if they are called back. The federal government tried to modify CERB so that employees recalled to work are automatically cut off from the benefit, but that legislation has yet to pass.
The CFIB and other business groups are lobbying for the CERB to be reworked, including requiring recipients to be looking for work, similar to employment insurance, and allowing recipients to earn more money through working while still collecting the benefit.
Currently, CERB cuts off if an individual makes more than $1,000 a month.
“Many employees are saying they are willing to come back but they don’t want to earn any more than $1,000, so that limits the hours they are willing to take,” said Kelly. “We are proposing that the CERB be gradually phased out over time as earnings grow.”
Ottawa has said CERB, which has delivered benefits to more than 8.4 million people, will remain in effect until the end of August. It has already paid out $43.51 billion as of June 4 and is budgeted at $60 billion.
Since its peak, about 1.2 million people have returned to work or have gone back on an employer payroll with the help of the wage subsidy program that pays 75 per cent of wages for businesses hurt by the pandemic.
Statistics Canada stopped collecting job vacancy data due to cutbacks at the agency caused by the pandemic, says Skuterud. That means there will be no clear indication of how many jobs are going unfilled as the economy reopens.
He says wage subsidies would have been a better tool to support laid-off workers rather than CERB because they keep workers directly connected to their workplace and ease the process of recalling staff.
“We are going to see lots of workers that don’t have a job and employers with job vacancies they can’t fill. That is economic inefficiency. That will make recovery so much more difficult,” he said.
Jayson Rider, an employment lawyer at Crawford Chondon and Partners in Brampton, Ont., says employees can refuse a recall if they are 70 or older, have childcare obligations or if they have a household member with compromised health.
He says if a worker refuses to come back because they are earning more on CERB or “just don’t feel comfortable returning,” employers have the right to tell an employee that constitutes quitting, which would make them ineligible for future CERB payments.
But Rider says before forcing an employee’s hand, he cautions employers about the potential “effect on productivity and morale that may result from having an employee back who either doesn't want to work or is afraid to be there,” he wrote to CTVNews.ca in an email.
“In my experience so far, most employees are eager to get back to work for their employers at the first possible opportunity to do so. That said, most of the employers I represent are in the construction and manufacturing sectors, so they pay well in excess of what their employees can receive on CERB.”
MORE THAN HALF OF BUSINESSES FULLY OPERATIONAL
Federal Employment Minister Carla Qualtrough said Monday that job growth of 300,000 jobs in May gives her confidence that workers, even lower-wage earners, are choosing to work when jobs are offered to them. Statistics Canada's labour force survey for May showed that lower-wage jobs rebounded at a faster rate than the national rate.
But Qualtrough told the Senate finance committee that the government is retooling pandemic aid programs to get business back to work, such as codifying the need to look for or take work as part of the CERB application.
The Conference Board of Canada projects the unemployment rate will peak at 13.7 in the second quarter ending June 30, but it forecasts the country will add 1.3 million jobs between July and September, which would drop unemployment to 10.5 per cent.
Last week, Canada hit a milestone in that 51 per cent of businesses have returned to being fully operational, but only 17 per cent of CFIB members said sales are at or above normal levels.
Fifty per cent said sales were at half or less, says Kelly. Recovery is far from inevitable even for those that have reopened.
“Lots of businesses have their doors open but they are operating at a loss … I really worry about the number of business fatalities we are going to see.”