Is a summer hiring spree coming as COVID restrictions ease? Depends on who you ask

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

When Betty Lou's Library was shuttered during pandemic restrictions last year, it wasn't just the hit to the cash register that hurt the trendy Calgary speakeasy.

The business also lost two of its senior floor servers and one of its senior bartenders.

“One of them moved away and two of them didn't want to be in the industry anymore,” said bar owner Blaine Armstrong. 

“It takes a lot of time to learn to execute the cocktails and execute the service. So it's just a lot of money into training, a lot of money into interviewing potential candidates.”

With Alberta hoping to further lift public health restrictions in the next few weeks, Armstrong is looking to add six staff to his 10-person team as he readies for a full opening and once again hosting live music. The province entered Stage 2 of a three-stage reopening plan on Thursday, with a goal of lifting nearly all restrictions by the end of June or early July. 

“That is a neck-snapping change in terms of the requirements and the customer experience,” Armstrong said. “We're trying to wrap our minds around that.”

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

As COVID-related restrictions ease across the country — Ontario's patios have reopened, for example, under the first step of its reopening plan — businesses are hoping customers will flood back, spurring a surge in summer hiring and employment. 

And while there's optimism that better days aren't so far away, not everyone is certain a wave of employment is poised to quickly wash over the Canadian economy.

Concern about future restrictions and the direction of the pandemic still lingers, leaving some feeling more cautious about where hiring is headed over the next couple months.

“I believe we are going to see a boomerang in spending,” said Doug Porter, chief economist at BMO Financial Group. “But I'm skeptical whether we're going to see that boomerang in employment.”

Speaking to CBC News last week after the release of the May employment numbers, Porter said there are a couple factors to explain why he's cautious.

One is that many areas of Canada are still seeing lingering restrictions, which has him thinking there won't be a quick rebound in employment over the summer.

“We're already at the stage where, in normal summers, a lot of university students would already be hired and on the job,” he said.

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

Looking south to the United States, Porter also noted that even with the American economy being quite open, employers are struggling to find workers. “I think that is going to be a bit of an issue in Canada as well,” he said.

In the U.S., people have been reluctant to return to work over health concerns; the government has also rolled out enhanced unemployment payments and many Americans have child-care concerns.

“On balance, I think we will see some of the same issues that the U.S. is going through right now, but probably not as intense,” Porter said.

He believes the Canadian economy will grow by six per cent this year, largely reversing last year's damage. “But a lot of that strength is going to be in the second half [of the year].”

Like with much of the last year, businesses find themselves in uncharted territory and opinions vary on how things will play out.

Some have a more optimistic view of where things are headed.

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

“As restrictions gradually ease in June, with vaccination objectives far ahead of expectations, the floodgates could open with students and furloughed workers rushing back to work,” National Bank of Canada economists Kyle Dahms and Alexandra Ducharme wrote earlier this month.

“We expect sectors most impacted by the pandemic to rebound strongly in the summer months. Thus, the recent soft patch should turn out to be transitory and the reopening of the economy ought to support hiring in the months ahead.”

The commentary followed news that Canada's labour market actually shed 68,000 jobs last month as tighter public health restrictions continued or were introduced in many regions of the country to slow a third wave.

Across the country, businesses are trying to make plans for when things open up — all while keeping an eye on the pandemic's path. 

Many non-essential retailers who managed to navigate the economic fallout of COVID-19 did so with the help of online sales. Now, they face the challenge of ramping back up at their brick-and-mortar locations.

“Our team is busy planning for multiple scenarios right now,” said Ian Rosen, executive vice-president of digital and strategy at luxury menswear retailer Harry Rosen.

“The shape of the demand curve is going to be so different from province to province, based on how lockdown restrictions are lifted, and capacity limits are restricted and vaccination uptake.”

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

Rosen said the company has continued operating all of its stores, with core staff, by offering curbside pickup and remote sales. The company employs 800 full- and part-time staff across 19 storefronts and its central office. Employee retention has been nearly 90 per cent during pandemic. 

“They haven't gone to sleep or haven't stepped away from their clients,” Rosen said.

The ability to hold on to key staff during the pandemic could be vital for many businesses, especially if recruitment becomes difficult.

For signs of what could happen here, Benjamin Tal, deputy chief economist at CIBC World Markets, looks to countries that opened up some time ago, like New Zealand and Australia.

“What we see is a situation in which, yes, clearly hiring is going to happen,” Tal said. “But at the same time, we see a significant increase in job vacancies. Basically, employers cannot find people. We definitely see it … in the U.S. where they are opening up and the companies, employers simply cannot find people.”

May employment numbers, reluctant to return, shed 68,000 jobs, begin to wrap up

Tal expects to see Canada's job vacancy rate rise, especially for low-paying jobs, until pandemic-related assistance programs begin to wrap up. There's already some upward pressure on wages as employers try to entice workers back, he said. 

But there's optimism this summer will be one where the restaurant industry moves from “survival to revival,” said Mark von Schellwitz, vice-president for Western Canada with industry group Restaurants Canada.

In bigger centres, he expects restaurants will be able to attract a lot of their food service employees back, especially once businesses can offer more certainty around staying open. But there could be challenges elsewhere.

“I've certainly heard from some members in smaller communities, in particular, where there's actually going to be some labour shortage issues coming up, where they don't have a lot of young people,” he said.

National figures in May show the unemployment rate for students returning to classes in the fall stood at 23.1 per cent.

That's markedly better than the 40 per cent unemployment recorded in the same month last year for returning students, but still higher than the 13.7 per cent recorded in May 2019.

Karl Littler, of the Retail Council of Canada, said while there's been “significant progress” made since last year around those student rates, it's not yet coming back to pre-pandemic levels.

“For those who have a limited window, like the summer, it's certainly not going to get back to pre-pandemic levels,” he said. “But the gap is narrowing.

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