Canada's small-business owners are having to be creative to attract and keep staff.

"As a small-business owner and entrepreneur, human resources has been the biggest challenge for me - finding the right people at the right time for the right amount of money," says Ed Madronich, president of Flat Rock Cellars in Jordan, Ont., about 20 minutes west of St. Catharines.

Madronich uses a battery of strategies to keep a full complement of skilled and semi-skilled workers on the 32-hectare (80-acre) winery, which produces chardonnay, pinot noir, riesling and gewürztraminer grapes.

When his wine-maker was poached by a competitor, he brought in a foreign worker as a replacement. His skilled cellar workers are also imported from other countries for seasonal work, while other staff are trained to increase their skills base. He also contracts out the formwork - picking, pruning and crop thinning.

"The reality is, there aren't enough skilled workers in this industry," says Madronich, who employs a dozen people at the height of the season. He spends a lot of time and effort "getting the right fit" with employees, a strategy that is paying off in low turnover of his most qualified and skilled people.

Small business is going to have to think creatively in order to compete in the new labour marketplace, says Corinne Pohlmann, director of national affairs for the Canadian Federation of Independent Business (CFIB). "More than 53 per cent of our members are saying staffing is a big problem," she notes.

And it's likely to get bigger. Labour shortages are not restricted to one province, though Alberta is suffering most due to its boom; and it's not temporary. Changing demographics mean even if there is a recession, there still won't be enough skilled workers to go around. And the shortage of skilled workers is beginning to affect the supply of unskilled workers, says Pohlmann, as employers hire people unqualified for positions and train them.

The restaurant and food service industry - whose narrow margins make it dependent upon workers at the lowest end of the wage scale - is also reeling, particularly in Alberta.

"It's only time until everybody's affected" across the country, says Mark von Schellwitz, western vice-president of the Canadian Restaurant and Foodservices Association (CRFA). "The food service industry cannot rely on technical and labour-saving devices to the same degree as other sectors - 45 per cent of our workforce is under 25."

With that labour pool evaporating, "instead of projected growth, look for our industry to shrink significantly."

Most restaurants in Calgary are running an average of 20 per cent less staff, says Gerard Curran, proprietor of two James Joyce Irish Pub and Restaurants in that city.

At full staff, his businesses seat 200 and 300 customers - but it's been some time since he had enough staff to serve a full house. "It's common for restaurants to be unable to open, or to close off half their space."

Service suffers, quality drops, there can be health and sanitation issues, and tempers can run high. "There are lots of people working 10 hours in one location, then going to another location and working another 10 hours," he notes.

With recruiters commonly trolling alleys behind eateries for staff and wooing away workers with $100 bonuses for immediate help, it's also not unheard of that a line cook will simply walk away from a job in mid-service, with 10 customer orders sitting unfilled, to work somewhere else.

Small businesses are using a variety of techniques to cope with the current problems, and their associations are lobbying federal and provincial governments for longer-term solutions.

"One solution is to become the employer of choice," says the CRFA's von Schellwitz.

It's a strategy that has worked for Madronich and Curran.

"I pride myself on low turnover," says Curran, who tries to keep a lid on the stress in the kitchen, because workers are attracted to workplaces with less stress and stay longer. "If I get a person from an extremely busy restaurant that's totally stressed out, over the next month or six weeks, they'll bring over other people."

"If somebody works here and it's a good fit," agrees Madronich, "they wouldn't necessarily leave for more money. The first thing I say is, 'I want you to have fun; we're going to work hard, but we're going to have fun doing it.' " He also stresses the opportunity to learn and use a variety of skills as an advantage. "Everybody takes on different roles. They learn more and there's less boredom.”

And employees develop better resumés.

It's important for small businesses to take care in selecting employees, advises Madronich.

The effects of a bad decision are magnified for small companies.

"If an employee doesn't work out at a big business, it's only one of a hundred," he says. In a small workplace, everyone's workload is affected by someone who leaves or doesn't pull their weight.

For his part, Curran is trying untapped labour pools.

For his part, Curran is trying untapped labour pools.

"We've contacted charitable organizations, our church, and the Catholic Women's League. We find people who want to work one or two days a week and we'll train them," he says.

One Asian couple in their mid-50s never considered such a workplace due to the language barrier.

Hiring them as a couple - one to wash dishes, the other to prepare food - provides them with a comfort zone, Curran says, as one speaks enough English to get the message across to the other.

The CFIB's Pohlmann and von Schellwitz of the CRFA say other short-term solutions being tried by small businesses include:

* Providing signing bonuses of $500 to people who agree to stay for three months.

* Guaranteeing a wage increase to employees who return for the next season.

* Helping with accommodations (sometimes a room in the employer's own home).

* Being more flexible with hours and working conditions.

* Hiring someone underqualified for the job and training them.

Industry associations including the CFIB and CRFA are lobbying the federal government to change policies governing immigration, working visas, unemployment insurance and pensions and ensuring young people emerge from the education system with the right skills for jobs of the future.

Flat Rock's Madronich lost one chef to Australia, where the application process is faster and less expensive.

von Schellwitz sees the need to promote working holiday programs for students, and relaxing the requirement to leave the country to apply to immigrate.

"We've got to bring the public onside," says Pohlmann. "It's not the same situation as 15 years ago when there was a recession and massive layoffs. People looked at immigration as a bad thing, taking away jobs from Canadians."

Canada's pension plan was originally paid out to people over 70; lowering the age for collection has also caused older workers to leave the workforce. Raising it may improve the numbers.

Underemployment is an international problem - blue-collar occupations go begging while colleges and universities continue to churn out graduates lacking the skills needed in the labour market.

Although permanent solutions may be long-term, business growth is being affected now.

"I'd intended to have four restaurants by now," says Curran.

But he's loathe to build or renovate because the construction industry is also suffering a worker shortage, so projects are likely to take longer and cost more. As well, "I'm staffing 20 per cent lower (than what he needs), but our labour costs are 25 to 30 per cent more. And if I'm having so much trouble finding staff for two restaurants, whatever would I do with four?" (Sharon Adams can be reached at sharon@businessedge.ca)