At first glance, it seemed like a quick and easy fix for the Fairmont Chateau Whistler’s labour crunch. Faced with a staffing shortage of alarming proportions last fall, management at the five-star resort hotel launched an effort to import 80 temporary workers from the Philippines.
The two-step process – a labour market opinion (LMO) from Service Canada and a few dozen temporary-resident visas from the Canadian embassy in Manila – was supposed to take about 12 weeks. But the LMO, the official verification that the employer is unable to find qualified workers in Canada, didn’t arrive until June. Hotel staff then travelled to the Philippines to select the candidates and applied for their two-year temporary-resident visas in July. Four months later, the visa approvals came through and, in late November, the workers began arriving on Canadian soil.
Twelve weeks had become 12 months.
“Yes, the whole process between last December and now was long and complicated,” admits Michelle Graham, the hotel’s HR director. “Certainly, it was not quite the three-month process.”
The Chateau Whistler isn’t the only B.C. employer to find the task of importing foreign workers mired in red tape and bureaucratic delays. Far from it. Since the province’s jobless rate dipped below five per cent in early 2006 – perilously close to full employment in the eyes of many economists – a growing number of B.C. employers have been looking abroad to fill their labour needs.
Just three years ago, B.C.’s jobless rate was 7.2 per cent. In December that number was hovering around 4.2 per cent, the lowest in 30 years. The national jobless rate hit 5.8 per cent last fall – also a 30-year low – before creeping up one-tenth of a percentage point by Christmas.
As a result, foreign workers have become a sought-after commodity, with demand increasing by 40 per cent in B.C. and close to 200 per cent in Alberta in the first six months of 2007.
John Leschyson, HR director of the Go2 Tourism HR Society, a non-profit organization dedicated to helping B.C.’s hospitality sector battle the labour shortage, says temporary foreign workers were unheard of in the industry two years ago. Since then, B.C. hotel, restaurant and resort owners have filed close to 3,000 LMO requests.
That demand has driven a surge in the number of HR consultants and job-placement agencies peddling their services to desperate employers.
“I know of at least half a dozen new agencies in the tourism industry, and it’s happening in other industries too,” says Leschyson.
It’s a trend that Graham has noticed at the Chateau Whistler as well. “There are lots of agencies knocking on the door,” she says. “The hard part is trying to figure out which agency is reputable.”
Even though demand is high, it has been a bumpy ride for these new consultants, as employers and recruiters alike are discovering that getting foreign workers from point A to point B isn’t as easy as it seems. Just ask Christine Stoneman.
Late in 2006, Stoneman and her partners at Chemistry Consulting in Victoria saw the growing demand for foreign labour and added overseas recruiting to the company’s roster of services. In February the company applied for an LMO from Service Canada, hoping to import 40 Filipino hotel and restaurant workers in time for the 2007 high season.
The LMO approval alone took four months. Stoneman, who travelled to the Philippines in June to interview potential candidates, recalls that the Canadian embassy in Manila was flooded with applications from Filipinos with jobs waiting for them in Canada. “I was just floored by the wall-to-ceiling boxes of files coming in almost by the minute,” Stoneman says.
Overworked visa officers, employees of Citizenship and Immigration Canada, finally managed to process Chemistry Consulting’s employee applications by early November. By mid-December Chemistry had placed Filipino service-industry workers at hotels in Courtenay, Victoria, Tofino and Whistler.
“I thought, ‘Finally! God, it took long enough,’” says Stoneman. “It took a year, but now we’re in the loop, so hopefully things will move along a little more quickly.”
The snail’s pace of approvals can also be traced to federal immigration policies that have been slow to adapt to changing conditions. The bulk of immigrant workers have historically been mid- to high-level professionals who, under federal regulations, are allowed to stay longer and have a better chance of gaining landed-immigrant status than lower-skilled workers. [pagebreak]But demand to bring in low-skilled workers has grown substantially in the last few years. More stringent regulations govern this group, reflecting Ottawa’s focus on protecting Canadian jobs and making sure foreign workers aren’t exploited. And those long-standing political and social concerns have further contributed to the backlog of LMO applications.
To be fair, the federal government has recognized the problem and come up with at least a partial solution. In January federal human resources and social development minister Monte Solberg pledged to expand a pilot program to fast-track a limited number of job categories through the LMO process in Alberta and B.C. The Expedited Labour Market Opinion program (E-LMO), launched in the fall, initially covered room attendants, desk clerks, counter attendants in retail sales, food and beverage servers, dental technicians, pharmacists, registered nurses, carpenters, crane operators and ski instructors.
The expanded plan, which covers 21 more jobs, many of them in the construction sector, will address about 50 per cent of the total demand for LMOs, Solberg says. “We wanted to get an indication of how effective this would be… So far the results are pretty encouraging.”
Despite considerable grumbling in the hospitality sector that chefs were left off the updated list of fast-tracked occupations, employers affected by the changes hail the E-LMO as a step in the right direction. Trevor Graham, GM of the Westin Resort and Spa Whistler, says his hotel has been approved for more than 60 positions, to be filled in stages over the next two years. “We’ll probably have to go back to the well again, keeping in mind 2010 and the implications there as well.”
The government’s E-LMO fast-tracking effort has further brightened the prospects of consulting firms hoping to cash in on the foreign-worker recruiting business.
“We’re pretty much focusing on the categories of positions in the expedited LMO – housekeepers, room attendants, food and beverage servers,” says Derek Gagné of Talent Edge Solutions Inc., a new HR consulting firm based in West Vancouver. “They are the ones that employers have the most demand for.”
Gagné, a former director of HR for Tourism Whistler, says the business, which he started on the side two years ago, has grown into a full-time job over the last 12 months. Foreign recruiting forms a small but rapidly expanding portion of the company’s business. “It’s still a relatively new service we’re offering, but it’s generating a tremendous amount of interest,” he says.
Like many new recruiters, Gagné is targeting the Philippines, which offers several advantages over other countries, including a ready supply of English-speaking workers, a long history of exporting labour and a well-established government infrastructure dedicated to processing applications. However, the E-LMO process offers little comfort to employers and recruiters looking to fill jobs that are not covered by the new policy.
Eighteen months ago, Victoria entrepreneur Ben Smillie started a company called Success Solutions, with the aim of recruiting, training and placing Chinese caregivers with Canadian clients. The company set up a certified training college in the Chinese city of Shenyang. So far 29 students have passed the course and 20 of those grads have jobs waiting for them in B.C. By mid-December Smillie was holding out hope the first recruit might arrive before the new year. “It’s been a huge wait. It’s definitely hampering our cash flow, and it’s delaying care for the people who need it here,” Smillie says. “The closer it gets, the more frustrating it gets. Every day is important, but there’s not much we can do.”
Smillie says part of the problem may be that China’s bureaucracy isn’t geared toward exporting workers. A series of oversights by an immigration consultant the company hired last year also slowed progress by several weeks, he adds. And in January, he learned that caregivers did not make the expanded list of E-LMO-eligible occupations.
Still, he’s optimistic the kinks will eventually be worked out of the system. “When we get going, we should be able to fill up to 100 positions a year,” Smillie says. “Once we prove successful in China, the demand at our school there will grow as well.”
For labour-starved B.C. employers, the untapped potential of foreign labour has a huge upside. But it’s also territory fraught with ethical grey areas and potential pitfalls. Employers and agencies involved in recruiting foreign workers are subject to strict requirements, both in Canada and the Philippines. Under Canadian law, employment agencies are prohibited from charging fees to foreign workers coming to Canada. It’s also illegal for employers to recoup their costs by docking the wages of foreign workers after they arrive. [pagebreak]Temporary foreign workers must be paid the prevailing wage rate in their chosen industry, according to assessments made by Service Canada. And, since foreign workers are required to return home when their two-year visas expire, employers have to pay for return airfare. The Philippine Overseas Employment Administration, a massive government agency that manages the country’s steady outflow of foreign workers, allows Filipino recruiters to charge applicants up to one month’s salary once they have been placed in a job. But since Canadian laws prohibit immigration fees, Filipino recruiters aren’t supposed to charge workers bound for Canada. Tom Steele, a foreign-worker-recruitment consultant in the Lower Mainland, says it’s becoming common practice for “employers to pay those fees once the workers are approved in Canada,” something he requires of all his clients.
On the other hand, it’s difficult for Canadian authorities to monitor what happens in the Philippines, and Steele says there are plenty of shady operators willing to bend the rules. “There’s a fairly elaborate set of rules and circumstances for what recruiters can and can’t do. If any of these rules are violated, it’s a sign there’s something amiss.”
According to Steele, whether companies are recruiting in-house or working with a consultant, the key is having a reliable overseas partner. Steele, who went into business just over a year ago, is working with a Filipino company called Finest Asia Resources that screens candidates and assesses their qualifications.
“There’s a lot of work that has to be done in that area, and it requires people with a lot of integrity,” says Steele, a retired Service Canada bureaucrat. “I have good people in the Philippines who do that for me. It’s really critical that they’re honest, reliable and ethical.”
B.C. Ministry of Labour and Citizens’ Services spokesperson Linda O’Connor says the province’s Employment Standards Act applies only to companies that do business in B.C. but has little jurisdiction over recruiters on foreign soil. “We just don’t have the ability to apply our laws in other countries,” she says.
As the E-LMO process kicks into full gear this year, low-skilled foreign workers will, for the first time in generations, begin arriving in Canada by the thousands instead of by the dozen. But even the most liberal immigration policies will barely scratch the surface of the country’s looming labour crisis. The B.C. Ministry of Economic Development is predicting a worker shortfall of 350,000 workers over the next 10 years. In Ontario that number tops 560,000. Every other province in the country is experiencing a labour shortage of comparable proportions.
South of the border, things aren’t much better – the U.S. Bureau of Labor Statistics has predicted a shortfall of four to six million workers by 2010. And according to a 2003 study from Pepperdine University, the U.S. labour deficit could top 30 million workers by 2030.
“We are not the only one with this problem,” Minister Solberg says. “If you look at where the Western world is going, the demographics are chilling.”
In a speech to the Vancouver Board of Trade in December, Solberg hinted at plans to expand the E-LMO program.
But he also stressed that imported labour is only part of what has to be a multi-faceted approach. He outlined government plans to improve the overall training of the domestic workforce, encourage permanent immigration and discourage retirement in older workers.
For organizations such as Go2, those measures can’t come soon enough. Training investments, improved recruiting methods, increased productivity and a higher average retirement age are important parts of the broader battle, Leschyson says.
But, he adds, they’ll fall short of the mark unless Canada’s immigration laws are updated to better reflect the country’s labour challenges. “Go2’s position on temporary foreign workers is that we should be handling this through permanent immigration,” he says. “We should be changing the laws so workers can stay here according to what the labour market demands.”
Back at the Fairmont Chateau Whistler, Michelle Graham is relieved that all the time and expense her company put into recruiting has finally paid off. The 80 Filipino workers make up about 12 per cent of the hotel’s 650 employees. They have at least as much experience as their Canadian counterparts, not to mention work visas that tie them to their jobs for two years.
And that’s a major plus in a resort economy where annual staff turnover rates often top 50 per cent. “The people we got are fabulous. They’re going to provide excellent guest service, and, with a 65 per cent turnover rate, it will give us some certainty for the next two years,” Graham says. “We knew it was going to cost us, but as a company… we’re willing to spend the money for the right people.”