Thank you very much, Mr. Chair.
Thank you for the opportunity to be here today. You should have a slide deck in front of you. I'd like to walk you through it over the next few minutes.
As I know some members are aware, CFIB is a not-for-profit, non-partisan organization representing more than 110,000 small businesses across Canada. Our members collectively employ more than 1.25 million Canadians. Small businesses across Canada account for $75 billion, or nearly half of GDP. They represent all sectors of the economy and can be found in every region of the country.
As you may be aware, CFIB takes direction solely from our members through a variety of surveys. That makes us a bit different from other organizations. We know that business owners are often too busy to attend round tables or AGMs, so we go directly to them for feedback through our survey process and through our field force of approximately 220 district managers, who knock on the door of approximately 4,000 small businesses a week. This provides us with an opportunity to understand the realities of running a small business at a grassroots level.
As I mentioned, we are a survey and research-based organization. The data I'm presenting to you today is not necessarily focused on the greater Toronto area, but we know that the experiences of business owners across the country, which I will share with you today, can be readily attributed to the experiences of those business owners.
The first piece of research I'd like to share with you is on slide 3. This data is from our Help Wanted report from the third quarter of 2018, which evaluates small business vacancies across the country. This shows that vacancy rates for small businesses are at all-time high, with approximately 430,000 jobs currently unfilled across the country. The vacancies are highest in the construction industry and for services, including personal services—mechanics, plumbers, electricians, hairdressers, etc. This will likely be increasingly a concern as the baby boomer generation retires over the next five to 10 years. Note that in the construction industry alone, 250,000 workers are set to retire in the next 10 years.
I will let members know that while this data is from quarter three, on Monday we will have new data from the fourth quarter of 2018 coming out. I just couldn't share it with you before then, unfortunately.
As you might expect, given those job vacancy numbers, many business owners have had difficulty hiring the employees they need. As you can see from slide 4, 78% of respondents said they've had trouble finding employees, while an additional 36% have had trouble retaining staff. Past research has shown that employers have the most trouble filling positions that require on-the-job training.
In addition to finding the employees, small business owners face many challenges when actually proceeding through the hiring process. As you can see from slide 5, nearly three-quarters, or approximately 70%, have difficulty hiring due to a lack of candidates in their geographic area, while over half have indicated that candidates are underqualified for their businesses' needs. Nearly half have also indicated that candidates for the jobs they are trying to fill have unrealistic expectations with respect to wages, benefits, vacation time, etc.
To address some of these challenges and improve their odds of hiring the right candidate, many business owners are doing what they can to attract and retain employees. As you'll see on slide 6, 60% of small employers have increased salaries and/or benefits to attract candidates, nearly 80% have improved salaries and benefits for the employees they already have, and 64% have increased training opportunities for these employees.
Part of the reason small employers in particular invest so much in their employees, especially ones who've already been hired, is the cost of training new employees. Once they have found an employee who's the right fit for their business, many small employers will turn to training them to improve their productivity within the business. As you can see from slide 7, new hires with no experience, often young people getting their first job, cost the most to train, approximately $4,200. A new hire with some experience still requires a significant investment on behalf of the business owner, around $2,800. As the cost of hiring increases, many employers may hire fewer young workers or may choose to hire more experienced employees rather than youth with little to no job experience.
While I know that this is not the focus of this particular study, it is our view that, as a result, youth could lose out on valuable opportunities to gain work experience, or might be forced to delay getting their first job, meaning that employment rates of youth between the ages of 15 to 18 will remain low. We do think this is a significant solution to the potential problems you've been discussing today, so I will detail that a bit further.
As I mentioned, one solution to the shortage of skilled workers is to invest in youth. We recently completed a report on youth employment. We discovered through surveying over 6,000 members that more emphasis is needed on matching the skills needed by most employers with those that young people have when they enter the job market.
On slide 8, you can see that the most important skills and attributes employers are looking for are general motivation and attitude, communication skills, professionalism, basic literacy, problem-solving and flexibility. Specific industry knowledge, previous work experience and educational attainment are less important to an employer. As you saw in the previous slide, many small employers can and do hire young people, despite the cost to their business.
One way to better prepare young people for the job market is to improve the connection between educational institutions, students and small employers. Community colleges are consistently rated highest by SMEs, as you can see on slide 9, as colleges are connected with the business community and involve the small business community in the creation of their syllabus. In community colleges, instructors often tend to have related on-the-job experience that they can then share with students.
University and high school students are at the bottom of the list in terms of job readiness, which is problematic. High schools should be teaching job readiness skills, as youth often get their first jobs in high school.
Government can also play a role. As you'll see on slide 10, small businesses identified the best ways government can help their businesses hire the workers they need: decrease red tape associated with the hiring process; decrease the costs associated with hiring new employees, either by reducing payroll taxes or by implementing tax breaks for hiring or training; and, provide tax assistance to help them invest in their businesses, such as the accelerated investment initiative.
To conclude, our recommendations are as follows.
We recommend that government consider reducing red tape associated with hiring and training. This can be, for example, records of employment, the LMIA application process for bringing in temporary foreign workers and reporting requirements to access government programs.
We're also suggesting that you consider implementing measures to reduce the cost of hiring and training in the form of perhaps an EI training credit for small business or an EI holiday for youth hiring.
We're suggesting as well that you emphasize and promote the skilled trades as a viable career option among youth and those looking to retrain, and better communicate with small business owners on the government programs that may be able to help offset the costs of hiring and training.
I will conclude on this note. I'm happy to answer questions you may have.
I can also answer your questions in French.