The labour shortage turns consumers into collateral damage

By : Dominique Lamy

The pandemic isn’t the only cause of the labour shortage currently afflicting the country. But it has exacerbated the problem, and consumers are paying the price.

Not a single day goes by without our hearing the same complaint: SMEs are grappling with recruiting and talent retention issues. This is the explanation as to why you sometimes collide with a locked door when trying to enter a business that would normally be open at that time. Or why that product you’ve been looking for is (still) out of stock.

Data provided by the Business Development Bank of Canada (BDC) as part of two separate surveys speak for themselves. Over 60 percent of Canadian companies state that the labour shortage is limiting their ability to generate growth. And almost one organization in two (49 percent) has delayed sending orders to customers or has been unable to ensure delivery due to a lack of staff. This is yet more evidence that companies’ difficulties in filling vacant positions directly affects consumers!

Three effects on the consumer

Increased prices for goods and services

As part of their goal to hire the best qualified workers (and those who are interested in taking on a new opportunity!), companies have no option but to loosen the purse strings to offer more advantageous terms of employment than the competition.

And in the hopes of continuing to maintain a profit margin, however small that might be, they need to increase the cost of their products or services. In the end, it’s consumers who are reaching deeper into their pockets to make up the difference. Sometimes the price has stayed the same, but the product format has decreased—the source of the term “shrinkflation.”

“You should expect price increases for many goods, even though this is a situation companies would like to avoid at all costs. For sectors with low profit margins like food, the only option is to pass costs on to the consumer. Products that require a lot of processing, and for which the labour component is the most significant, are the ones that are mostly affected,” explains Karl Blackburn, president and CEO of Conseil du patronat du Québec.

Less efficient customer service

Whether you’re trying to get in touch with the customer service department of a company or a governmental organization, longer response times should be expected, since the lack of workers has led to bottlenecks. For example, telephone wait times are longer than usual. The time required to receive a response by email has also increased.

The influx of new, less experienced workers in certain specialized stores also doesn’t exactly guarantee a better purchase experience either. These new employees are slowly progressing along a learning curve, so patience and understanding will be required.

“Whether they’re at a grocery store, convenience store, or business, workers are the first people to be mistreated when there’s a labour shortage. They’re the ones who are applying the health regulations in effect and who have to deal with negative comments from customers,” he notes.

Problems obtaining the desired product

Searching for particular products sometimes seems like heading out on an expedition. Flour, toilet paper, cleaning products, and treated wood, for example, have all been hard to find since the start of the pandemic. What we’re currently witnessing is an obvious imbalance between supply and demand.

Fewer employees available to work on production lines leads to a reduction in what is available, meaning the number of goods produced. On the other hand, demand for certain products by consumers has increased…

“We’re seeing recreational equipment becoming hugely popular, such as bikes and camping equipment, for example. Even before the summer starts, it’s likely that stores will have hardly anything left. Lastly, new vehicles are sometimes hard to find because of the worldwide shortage of electronics components that has not been rectified,” explains Blackburn.

Today’s watchwords: plan and adapt

In this context, and without having access to better information on how the situation is evolving, consumers have no other option but to improvise and get creative. To combat inflation, craft a budget and make sure you stick to it, and take advantage of weekly specials at the grocery store—both excellent reflexes to adopt. You could also turn to used goods or swap goods with neighbours to limit the effect of stock shortfalls for certain in-demand items.

Perhaps the key to coping is simply effective planning. “Whether you want to move forward with a renovation project, buy new furniture, or obtain a vehicle, consider beginning your planning well in advance,” advises Blackburn.