How employers desperate for workers are throwing cash at applicants

A trip to the mall in Fredericton led to much more than a pair of new shoes for Hannah McLeod. 

The 21-year-old saw a hiring sign at a shoe store, Journeys, and decided to apply. At the time, McLeod was making $15 an hour at a potato-processing plant in Florenceville-Bristol, N.B., northwest of the city.

She had no experience in retail and assumed that for selling shoes, she would get the provincial minimum wage, which is currently $11.75 in New Brunswick, though it will reach $13.75 next October.

But after her interview with Journeys, she was offered a better job than she expected — and for more money.

McLeod had told the store that, if hired, she would accept $12.50 an hour. When the district manager called, he instead offered her the assistant manager's job at $15.05.

She was surprised.

"Sometimes it's difficult, especially in retail, to get the pay you not only want but deserve," she said.

Journeys is not the only business trying to make jobs more attractive to potential workers. 

Third-quarter employment data from Statistics Canada show that labour shortages have increased across Canada in most sectors, with a concentration in low-paying occupations.

'Not a bad outcome,' economist says

As a result, employers from coast to coast are offering financial incentives for jobs traditionally viewed as low-skilled.

Some retail and service companies are turning to signing bonuses to entice workers; McDonald's franchises in Canada, for instance, are offering $200 signing bonuses, while other companies, such as Rogers and Indigo Park, advertise signing bonuses right in their job postings. 

Labour economist Fabian Lange, with McGill University in Montreal, said while the reasons behind the high demand for labour aren't entirely clear as we've settled into the pandemic, it has ultimately been a good thing for workers. 

"It's not a bad outcome in the economy, if we have a lot of productive jobs out there and wages have to go up," he said.

These labour shortages can no longer be explained away with the notion that people simply aren't working, he said. 

"If you compare the employment rate today with two years ago, we're not that far off," said Lange. "It's not like there are fewer workers at work at the moment — not substantially, at least."

In November 2019, Canada's unemployment rate was 5.9 per cent. Two years later, it remains comparable, sitting at six per cent. 

Demographic changes, including some retirements and fewer young workers available to go into service jobs, like retail, food and accommodation, might be partly to blame for the shortage, said Lange. But long-term trends have pointed in the direction of a tighter labour market, too. 

Still, given that the bulk of wage growth over the last several decades was concentrated at the top of the labour market, Lange said, any shortage-induced wage hikes today are cause for celebration. 

From 2019 to 2021, the occupations that saw the greatest wage increases were in construction, retail, food services and accommodation, and health care. Retail sales, for example, have seen an 8.9 per cent wage increase over this period. 

"A couple of years of strong wage growth in those industries would be something I'd actually very much [appreciate]," said Lange. "I'd say let's not worry about this; let's not try to solve a problem that's not really a problem."

Employers entering 'wage wars'

After grappling with a persistent labour shortage, Lounsbury Group, an automotive and furniture retailer in New Brunswick, has started to offer signing bonuses of $500 to $1,000 for hard-to-fill vacancies.

Half the bonus is given with the first paycheque, while the other half is paid out after the employee finishes a probationary period. 

"We were already facing a bit of a challenge finding talented people before COVID hit, but it's been incredibly difficult since," said Michelle Duffie, the company's human resources manager. 

In an effort to be more competitive, Duffie said, the company has been upselling perks of working for Lounsbury, as well as implementing financial incentives.

Duffie said she regularly consults with fellow human resources managers to figure out what workers are being offered in terms of pay and incentives. 

"The signing bonus came about because one big thing that we've run into is we'll offer someone a position … their current employer is countering an offer to them. Then we're getting into this wage war with the employer."

Duffie said while the signing bonuses have helped a bit with recruitment, it has not solved the company's overall labour shortage problem.

"We're just starting to see the beginning of the challenge," she said. "We're going to have to get more creative with our recruitment."

Michael LeBlanc, a senior adviser to the Retail Council of Canada, said the pandemic has spurred retailers to implement incentives that would make them attractive workplaces. Some of these incentives include higher pay, brand incentives, increased care for health and safety, and opportunities for growth. 

"If you're thinking about your people the way you were 10 years ago, you are probably not the employer of choice."

How employees are treated matters

Back at the mall, McLeod said she believes the staffing shortages might indicate a problem with the way workers are treated by employers.

"Part of it is, you should've been offering [these incentives] to begin with," she said. "But the other part is: What is so wrong with your workplace that you're so understaffed?"  

Although older generations may have tolerated having their labour taken advantage of, McLeod said, her generation is demanding more of their employers. 

"It's not only our skills that we're using. You're being paid for your time and for your body, and those are hours you're never going to get back," she said.