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Retailer that raised salaries to attract talent remains an outlier

When Altitude Sports started hiring for its holiday rush, the Canadian e-commerce retailer ran into a recruiting problem: There weren’t enough people to fill the available positions.

When Altitude Sports started hiring for its holiday rush, the Canadian e-commerce retailer ran into a recruiting problem: There weren’t enough people to fill the available positions. 

“We didn't have the traction to reach our target,” Altitude Sports co-CEO Maxime Dubois said in an interview. “We went to the market and really studied the situation and found out that we weren't competitive enough.”

So the outdoor gear and clothing company raised wages by $2 an hour for its customer service and distribution centre workers.

Canada’s tight labour market has left many retailers scrambling to attract workers ahead of the holiday shopping season, a massive sales period that for some eclipses the rest of the year.

Economists say that despite the apparent worker shortage, broad wage increases haven't followed.

Yet Altitude Sports shows the effectiveness of a pay hike. 

The Montreal-based retailer's base pay is now $16.50 an hour — $3 above Quebec’s minimum wage — though some employees make more.

After raising wages, hiring became easier. The company's workforce quickly climbed to 520 workers, up from 220, as it ramps up for its busy holiday period. 

“We adjusted to the market to make sure that we were still relevant for current and new employees,” Dubois said. “We started seeing the effect in our hiring pipeline right away.”

Many retailers started hiring early for the holidays this year but a review of job postings suggests some retail positions continue to go unfilled after several weeks. 

While some employers blame generous pandemic benefits for keeping people at home, economists say there are several factors contributing to the labour crunch. 

“A lot of restaurants and retail stores were closed for extended periods of time during the pandemic so some workers have left the industry,” said Fabian Lange, an economics professor at McGill University. “They may have gone back to school or pursued other interests, so that would contribute to the shortage.”

He dismissed the suggestion that unemployment benefits have discouraged people from finding a job or that low-wage workers have accumulated enough savings to sit out of the workforce for an extended period. 

“There might be a little bit of that going on, but I find it hard to believe it would contribute to sustained labour shortages,” said Lange, also the Canada Research Chair in Labour and Personnel Economics.

Part of the issue may be that few companies appear to be raising wages in response to the labour shortage, he said. 

“There is no evidence that wages are going up,” Lange said. “If anything, after inflation, wages are declining.”

That makes Altitude Sports an outlier in the economy. 

It also raises questions about how long a lone retailer can sustain higher wages without also raising prices, potentially making it uncompetitive. 

Dubois said Altitude Sports' prices will remain stable for the remainder of the year, with discounts available on Altitude Sports' sister website The Last Hunt.

Some brands are increasing their MSRP — manufacturer's suggested retail price — beginning next spring to cope with higher material and supply-chain costs, he added.

Still, while prices likely won’t rise before the holidays, that doesn’t mean supply won’t be affected. 

In a note to customers in early October, Dubois and co-CEO Alexandre Guimond urged people to consider shopping early this year. 

“We’re seeing delays in new arrivals (and) shipments being cancelled outright,” the letter said. “Consequently, we’re projecting a lower-than-usual stock level available for you over the fall and winter seasons.”

Dubois said he felt it was important to be honest with customers. 

“We don't want to scare anyone, it's just really the plain truth,” he said. “Inventory is less flush than usual. We’re 15 per cent behind where we wanted to be in terms of stock.”

Manufacturers have focused on more profitable adult sizes, which will make the selection of some youth outdoor clothing and footwear particularly sparse, Dubois noted.  

In other cases, some models or designs won’t be available at all because of material shortages. 

“There are some polar fleece makers who haven't been able to provide their brands with the yardage they need because they just didn't have the raw material,” Dubois said. 

Still, he said Altitude Sports has focused on hiring to ensure customer service is top-notch throughout the busy period.

“The average wait time to speak with someone is 20 seconds and we never want it to go over three minutes during Black Friday,” he said. 

The online retailer is also testing different transportation options to ensure it has backup plans to quickly deliver items across the country.

“It's really about executing well and making sure our clients get the same experience in a rush time and they would get in the middle of summer,” Dubois said. 

Altitude Sports began selling outdoor goods and clothing online in 1999, making it one of the first retailers in Canada to offer e-commerce.

That e-commerce experience, along with its focus on customer service and wide selection of brands, has helped it fill more than a million orders across Canada in its last fiscal year, Dubois said. 

"Web adoption has exploded over the pandemic and we're focused on keeping our customers satisfied while attracting new ones."

This report by The Canadian Press was first published Nov. 1, 2021.

Brett Bundale, The Canadian Press