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B.C.’s service sector facing labour ‘dogfight’

Industry prepares to meet consumer demand amid widespread labour shortage
natinesabineblueprintmanagement
Nate Sabine, This is Blueprint Management’s director of business development, outside one of the Vancouver clubs his company manages.

Hiring staff at Vancouver restaurants and bars six months ago felt like a “dogfight” for Nate Sabine.

“One of my GMs [general managers] had eight interviews and hired eight people in one day,” said the director of business development at This Is Blueprint Management Ltd.

“Two of them showed up for work.”

Sabine’s company operates clubs and bars across the city, including Fortune Sound Club and the Colony chain of pubs. It also promotes concerts and operates the annual FVDED in the Park music festival.  

While the competition for hiring bar and restaurant workers has waned somewhat, the local events and music industry is facing increased pressure after many workers left at the outset of the pandemic nearly two years ago.

“There’s been a big loss of talent that is going to take some time to fill out because that’s experience,” Sabine said. “You can’t go to school and learn how to be a production manager all of a sudden or learn how to be a talent buyer.”

With a booster campaign underway and many British Columbians having recovered from COVID-19 amid the Omicron wave, provincial health officer Dr. Bonnie Henry has indicated multiple times since January some restrictions would be loosening this month. But does the province have the labour capacity to meet demand from B.C. consumers eager to end their holiday nesting and hit the town again?

Job vacancies across the province totalled 157,575 in 2021’s third quarter, according to Statistics Canada data. And Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association, said vacancies are exceptionally high within his sector: as many as 20,000 to 30,000 on a base of 190,000.

“But it was significant even before the pandemic,” he said, adding the sector is undertaking significant changes to address labour shortages.

Some restaurants are no longer open for lunch and others may close one day a week because of worker shortages. Other establishments now relay more on technology that allows patrons to order and pay for meals at tables.

He estimated takeout amounted to about 15 per cent of orders pre-pandemic and now accounts for more than 30 per cent.

“What that means to us is that a larger part of our business sales is takeout and delivery, which is less labour intensive,” Tostenson said, describing the shift as rebalancing the economics of the restaurant industry.

Meanwhile, the federal government has embarked on a campaign to bring in 1.2 million immigrants over three years.

Ottawa so far is hitting its targets, having taken in 401,000 newcomers in 2021, the first year of the campaign.

“When you think about new immigrants, the picture that comes to mind is an individual or a family arriving to Canada via one of the country’s major airports. During COVID, only 30 per cent of immigrants arrived this way,” Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce (TSX:CM), said in a report last month.

“The other 70 per cent of ‘new arrivals’ arrived in Canada … from Canada. That is, those new permanent residents have lived in Canada as temporary residents.”

Even so, Tal said, the growing number of new immigrants is helping to ease the labour shortage in Canada and is working to limit wage inflation.

As of November 2021, the median hourly wage for a server stood at $16 in the Lower Mainland and $17 for Vancouver Island, according to federal government data.

Minimum hourly wage in the province is $15.20, while servers’ median wage across Canada is $15.

Tostenson said wages are going up not just for servers, but also for kitchen support staff.

“We are going to see higher menu prices in B.C. That’s just natural, in order to be able to pay higher wages and then also deal with costs. But there’s such a demand that we know is coming that the cost pressure in time will likely diminish.”