Over the past few weeks, Global Advantage attended numerous conferences in this year’s spring conference season. From Research Money to the Future Forum, the most prominent discussion theme was leveraging talent to support innovative enterprises, and whether a sufficient asset base exists in Canada to do so.
The Conference Board estimates that Ontario alone loses $24 billion a year in forgone GDP due to a widespread skills shortage. They also note that while employers are in need of more skilled employees than before, they have been investing less and less in training. Ontario employers in the study reduced their per person training budgets from $1,200 on average to $700 between 1993 and 2010. Compounding the issue is the increasing numbers of skilled managers who are retiring in the next few years. Adecco’s 2018 report shows that while the claimed 200,000+ skills shortage in different ICT sectors, the real need may be of skilled managers as most of that shortfall can be filled with technically capable employees. Technical talent refers to employees with the required math, reading, writing, and IT skills for the job, while managerial talent refers to mid- to executive level managers.
After Dave Watters’ presentation to CSPC on the 2019 Federal Budget, which dedicated new funding for skills, the discussion among panel participants also confirmed that while universities and colleges have consistently produced the technical talent businesses need, they were so far not seeing a similar improvement in the availability of managerial talent. Deloitte’s new report on Canada’s competitiveness confirmed this, where their data showed that Canada already has sufficient talent for most roles in the knowledge economy. Moreover, similar studies reported in the Globe and Mail showed that automation may soon make 42% of that technical talent redundant due to advances in AI.
Many feasible solutions have already been proposed. Queen’s University professor Don Drummond’s report, Working Together to Build a Better Labour Market Information System for Canada, suggested increased investment in Statistics Canada to collect and analyze more detailed labour market data. Capturing quality labour data that reduces “unemployment or raising wages by a better matching of workers and jobs … would raise GDP by some $800 million.” Universities and colleges should collaborate extensively with businesses to better understand business needs and transform their programs to meet those needs, especially at the bachelor/undergraduate level. This can be manifested in many ways, such as increasing co-op placements/experiential learning programs, tax incentives to train employees (similar to incentives in the Fall Statement 2018 for capital investments), and granular data collection for continuous program improvement.
The skills gap is real, but not where most expect it to be. Canada’s excellent primary and secondary education institutions have consistently been providing the private sector with talent equipped with the necessary technical skills for the job. More needs to be done to encourage the development, or acquisition of, managerial talent.