Canada's retailers are having a harder time wooing skilled employees than customers into their stores this holiday season.

The relatively strong Canadian economy, particularly in Western Canada, is prompting prospective Christmas seasonal employees to look for more lucrative positions in other sectors - at a time when retailers require tech-savvy and customer-friendly staff.

"This year, there's no question, (recruiting)'s more challenging than it ever has been," says Kevin Evans, western vice-president for the Retail Council of Canada.

Retail sales growth in Alberta has been well above the rest of the country while B.C. is in second, so demand is highest in Western Canada, says Evans. Retailers in Eastern Canada, where the economy has slowed, are not feeling "as much of a pinch."

Bayne Stanley, Business Edge
Ensuring adequate staffing levels for the Christmas season has been crucial for Nicole Cox, Future Shop's senior management retail recruiter for Western Canada.

The hiring targets of two large national retailers offer some insight.

Hudson's Bay Co., which operates The Bay, Zellers and Home Outfitters, recently launched a recruiting drive to hire 15,000 new employees for its 550 outlets across Canada. Vancouver-based Future Shop attempted to recruit 1,200 staff in Western Canada and 2,200 in Eastern Canada.

"(Demand for seasonal staff) is pretty significant, because there is obviously increased traffic in the stores through November to January," says Evans. "To provide the level of customer service that people have come to expect and are demanding, you need to have more staff on the floor.

"Retailers this year have perhaps been more inventive and creative and focused on attracting people than in years gone by" - when they could have held a seasonal hiring fair and attracted a lineup of people around the block.

In October, the retail council held a hiring fair in Edmonton that involved 27 companies and also held a news conference in Calgary to drum up employee interest.

Product knowledge and customer-service skills are two qualities that employers are looking for.

Many customers are much more knowledgeable of products because they research them on the Internet before going into a store, so they're expecting staff that are sufficiently tech-savvy.

"If you're selling these new plasma TVs ... you need to know your stuff," says Evans. "Customers are not going by price alone."

Dan Kelly, the Calgary-based western vice-president for the Canadian Federation of Independent Business (CFIB), says retailers are facing a nationwide labour shortage. As a result, he predicts customers won't get the same level of service that they're used to, and some retailers will struggle to keep their doors open during the holidays.

"Retailers are lucky these days if they have somebody to man the till," he adds.

The Retail Council's Evans says they are also looking at the issue of recruiting year-round employees, rather than just seasonal staff.

Last summer, the group launched a retail labour-supply study with the Alberta government that is now being implemented.

Evans praises new measures introduced recently by federal Immigration Minister Monte Solberg to ease entry for temporary foreign workers. But the council does not view immigration as a "silver-bullet" solution.

Temporary foreign workers should also have opportunities to obtain Canadian citizenship, he adds, while Aboriginals, the disabled and other under-utilized demographic groups should also be recruited.

"We don't have a temporary problem," says Evans. "We have a long-term problem."

In 2007, the council will launch a marketing campaign that promotes retail as a career.

Many people don't realize retail employs people in 150 different positions, and 45 per cent of retail workers are in management and professional capacities, he adds.

Compensation is always going to be a factor, he allows, because retail is not going to be able to compete with a lot of other industries, especially the Alberta oilsands. But because of low profit margins, employers realize they have to meet market pressures.

This winter, Future Shop tried to get a head-start on hiring, because it recognized that a lack of staff on the sales floor could reduce profits, says Nicole Cox, the firm's senior management retail recruiter for Western Canada. Cox also oversees seasonal hiring of sales staff.

The electronics chain, which operates 119 stores across Canada, does 50 per cent of its annual business between Dec. 15 and Jan. 15, with a large chunk of that 50 per cent coming on Boxing Day alone.

"In every store, we've trained the head (customer service reps) to be training captains, so basically they've been taken off the floor for over a month and all they're doing is hiring," says Cox.

Future Shop's level of hiring demand has not changed, but the firm has taken a different approach with its recruiting methods to keep up with the competition. The company launched an online advertising campaign with Working.com and also set up an online application form that candidates can fill out at home or in-store kiosks.

"The applicant can actually sit down at one of our kiosks and fill out our online form, and then they get interviewed on the spot," says Cox.

"So, really, if everyone is doing what they should be doing, an employee can be hired within six hours."

Future Shop, which ended its recruiting drive Dec. 1, also offers a range of bonuses to employees who referred candidates who landed jobs.

A successful referral of a B.C. seasonal employee was worth $50, while a referral that led to the hiring of a general manager in Alberta earned $5,000.

Some small retailers have started offering employers "retention incentives" - for example, $1,000 for 1,000 hours worked. One Calgary Mexican restaurant offered a free trip to Mexico for employees who stuck around for a year.

Many retailers do half of their annual business during December and January, says the CFIB's Kelly, whose group represents 10,000 small and medium-sized enterprises across Canada. But most retail staffing levels are quite low to begin with, he adds, and firms can't boost their employee rosters because they are just scraping by with staff that they have during slower seasons.

Other retail-chain franchisees are subject to set prices across Canada, so they can't boost their margins and lure people with higher wages. The shortage transcends companies of all sizes.

"The larger you are, the larger your roster of people, so you have a little bit more flexibility," says Kelly. "But if you're a three-person shop and one person's out sick and the other person's taking the day off, you're hooped."

As a result, some retailers have been forced to shut down either temporarily or permanently. "(Store operators) are having to put a sign on their doors that says, 'Closed today,' or they're not even opening their doors altogether," says Kelly.

Stores that would like to have extended hours during the holidays have also been forced to close earlier in the day. Meanwhile, companies enjoying strong growth have decided not to open more stores.

In the past, the retail and service sectors served as the "training grounds" in other industries.

But medium-sized and large resource firms are now hiring the people who would have been entry-level staff in the retail and service sectors.

Like the retail council, the CFIB is calling for the easing of restrictions on immigrants' entry into Canada, and more employment programs for the disabled, Aboriginals, seniors and other marginalized groups.

Kelly says the economy-wide labour shortage is the top concern for CFIB members in Alberta and the most significant growing issue in B.C., and remains a concern for at least 50 per cent of members in all regions of Canada.

"I can only imagine how bad Boxing Day is going to be this year, given the shortage of labour," he adds.

(Monte Stewart can be reached at monte@businessedge.ca)