Most small business owners, particularly in the retail and hospitality sectors, are feeling the pinch from the economic uncertainty in Canada and say they will not be hiring additional staff this holiday season, a new survey suggests.
Three in four (76 per cent) of Canadian small businesses in the retail and hospitality sectors said they’re not planning to hire seasonal staff for the holidays, according to a poll by Canadian fintech firm Merchant Growth.
Merchant Growth’s poll, which surveyed 60 retail and hospitality businesses, found that of the businesses that do plan to hire extra staff, 21 per cent said they will hire fewer people this year than in previous years.
Small businesses are entering this year’s holiday season “with their guard up,” Joe Cote, chief growth officer at Merchant Growth, said.
“For many, it’s not that customers have disappeared; it’s that the cost of meeting demand has climbed faster than sales. Wages, rent and supplies are all up, and business owners are still waiting for signs of a rebound in consumer confidence,” Cote said.
The biggest reason businesses cited was not being able to afford to pay extra wages this year, the survey found, with 28 per cent citing that as their number one challenge.
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Another 21 per cent said they were unable to find qualified workers to fill their labour gaps.
Businesses are expecting Canadians to shop less this holiday season, the survey found, with 15 per cent saying their sales outlook was “uncertain.”
Around half (46 per cent) of small business owners expect consumers will spend less this year during the holidays, while a quarter (25 per cent) expect lower sales for the holiday season.
While Canada’s unemployment rate fell slightly from 7.1 per cent in September, it still came in at 6.9 per cent in the latest numbers from October.
Some economists see this as good news overall, but remain cautious given the uncertainty of the trade war and how tariff policies may evolve.
And the outlook for the coming months is lower than usual, according to an October survey by the Canadian Federation of Independent Business (CFIB).
In October, only one in 10 small and medium businesses told CFIB that they plan to hire more people in the next three to four months.
This is “significantly lower than what is usually recorded at this time of the year,” CFIB said.
In September, 23 per cent said they had already reduced hiring because of U.S. President Donald Trump’s trade war.
The youth unemployment rate, which measures unemployment among the 15 to 24 age group, fell from 14.7 per cent in September. However, it still came in around 14.1 per cent in October.
The dip in hiring around the holidays is hitting younger Canadians the hardest, Cote said.
“Traditionally, this season is when younger workers and students get a foot in the door with short-term jobs. But this year, fewer postings mean fewer opportunities,” he said.
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Holiday hiring is set to get tighter as small firms say no to staffing up
