Status of Skill Shortages in Canada: Sources, Implications, Solutions

1. Status of Skill Shortages in Canada:Sources, Implications, Solutions IQPC National Forum: Addressing the National Skills Shortage November 29 & 30, 2005 Shirley Seward, CEO Canadian Labour and Business Centre

2. The Canadian Labour and Business Centre (CLBC) • Independent national organization, founded in 1984 • Multipartite Board led by business and labour • Dialogue / Research focus on labour market, skills and skill shortages, workplace learning Canadian Labour and Business Centre

3. Presentation Outline • Global economic context • Demographic backdrop to skills issues • Role of immigration in the labour market • Perspectives of management and labour leaders regarding skills shortage • Potential avenues for solutions Canadian Labour and Business Centre

4. Canada Performing Well on Several Fronts • Canada had the highest rate of GDP growth among the G8 countries between 2000 and 2004 • Canada’s debt to GDP ratio at its lowest level since 1983-84 • Canada leads the G8 and OECD countries in the percentage of the population aged 25 to 64 with a post-secondary diploma or degree • Unemployment rate among its lowest recorded levels in 30 years Sources: Statistics Canada; Department of Finance Canadian Labour and Business Centre

5. National Economic and Labour Market Challenges and Areas of Concern • Globalization and Competitiveness • Productivity • Innovation and Technological Change • Learning and skills development (literacy, adult education and training) • Equity issues (human capital haves and have nots) • Increasing Competition for Foreign Trained Workers • Growing demand for skilled labour Canadian Labour and Business Centre

6. Growing Demand for Skills: In all provinces, growth of high skilled occupations far outpaces growth in low skilled occupations Canadian Labour and Business Centre

7. Underlying DemographicTrends in Canada are Heightening the Skills Challenge • Slowing population growth - In all provinces, the fertility rate is well below replacement level • Projected decline in working age population and rising dependency ratios • A rapidly increasing “near-retirement” population • 20% of workers are within 10 years of the median retirement age, up from 11% in 1987 • Growing reliance on immigration for labour force growth • Immigration represented 70% of net labour force growth between 1991 and 2001 Canadian Labour and Business Centre

8. Perspectives of management and labour leaders: CLBC’s 2005 Viewpoints Survey • Biennial Survey of Private and Public Sector Business/management and Labour leaders • Four major themes • Challenges facing the economy and labour market • Workforce skills issues • Workforce training issues • Immigration issues • Preliminary results based on 557 responses Canadian Labour and Business Centre

9. Which Leaders Were Surveyed? • CEOs, Owners, Senior VPs of businesses • Labour leaders (national, provincial and local presidents) • Chief Administrators of hospitals • School principals • Presidents of universities and community colleges • Federal and provincial DMs with labour market and education/training responsibilities • Chief administrative officers of municipal governments Canadian Labour and Business Centre

10. Viewpoints Theme 1Challenges Facing the Economy • Top 10 issues (out of 42), based on the percentage saying “serious problem” • Where the issue of skill shortages ranks in relation to other issues and how it has changed from past surveys Canadian Labour and Business Centre

11. Top 10 Issues of Concern (out of 42) – Private Sector Managers % saying serious problem Canadian Labour and Business Centre

12. Top 10 Issues of Concern (out of 42) – Public Sector Managers % saying serious problem Canadian Labour and Business Centre

13. Top 10 Issues of Concern (out of 42) – Private Sector Labour Leaders % saying serious problem Canadian Labour and Business Centre

14. Top 10 Issues of Concern (out of 42) – Public Sector Labour Leaders % saying serious problem Canadian Labour and Business Centre

15. What Past Respondents Were Saying About Skills Shortages % saying serious problem Canadian Labour and Business Centre

16. Viewpoints Theme 2Workforce Skills Issues • Experience with skill shortages and skill sets seen to need improvement • Most important actions for addressing human resource and skill requirements over the next five years • Perceived importance of extending the working careers of Canadians as a way to help deal with skill shortages Canadian Labour and Business Centre

17. Percentage of Managers and Labour Leaders Reporting Current or Expected Skill Shortages Managers- reference to their own organization Labour Leaders – reference to organizations where members work Canadian Labour and Business Centre

18. Communication, leadership and management skills are most often seen as needing “much improvement” Canadian Labour and Business Centre

19. Top 5 Actions to Address Skill Requirements(based on percent saying action is very important) Canadian Labour and Business Centre

20. Importance of “Hiring new immigrants” as an action to deal with human resource/skill requirements Canadian Labour and Business Centre

21. Views on extending working careers to deal with skill shortages % agree Canadian Labour and Business Centre

22. Viewpoints Theme 3Workforce Training Issues • Importance of employee training to business strategy and collective bargaining issues • Actions seen as most effective in increasing the amount of workplace training Canadian Labour and Business Centre

23. Importance of Training Managers – reference to overall business strategy Labour leaders – reference to collective bargaining issues Canadian Labour and Business Centre

24. Actions most commonly cited as “very effective” in increasing the amount of workplace training – Private Sector Canadian Labour and Business Centre

25. Actions most commonly cited as “very effective” in increasing the amount of workplace training – Public Sector Canadian Labour and Business Centre

26. Percent saying “it is important for business, labour and government to work together to improve the quantity and quality of workplace training” Canadian Labour and Business Centre

27. Viewpoints Summary – Management and Labour Agreement on Aspects of Skills and Training • Skill shortages remain a top concern for management and labour • A large percentage of managers and labour leaders report current or anticipated shortages • Both management and labour say that training is a key strategic concern, and key to addressing skill needs • Most recognize the importance of working together on training Canadian Labour and Business Centre

28. Toward Solutions:Three Ways Human Capital Policies Can Alleviate Skill Shortages Alleviation of Skill Shortages Opportunities for Full participation Opportunities for Workforce Skills Development Promoting Innovative Practices and Partnerships Human Capital Development Utilisation Canadian Labour and Business Centre

29. Responding to the Skills Shortage Challenge (1) • Maximizing Opportunities for Full Participation: • Allowing older workers to remain active and productive labour force participants • Increasing access to the labour market by groups such as Aboriginals, persons with disabilities, members of visible minorities • Easing access to the labour market for internationally-trained workers • Increasing the participation of women in non-traditional occupations • Easing the entry of youth in the labour market Canadian Labour and Business Centre

30. Responding to the Skills Shortage Challenge (2) • Maximizing Opportunities for Skills Development: • Creating better linkages between the education system and the labour market • Increasing the scope, breath and efficacy of workplace training • Removing barriers to apprenticeship training • Making the business case for investment in training and HR development • Enhancing essential and foundation skills for the workforce Canadian Labour and Business Centre

31. Responding to the Skills Shortage Challenge (3) • Working Together to Work Better: • How to effectively organize our economy, institutions and workplaces • Promoting innovative practices (within and between businesses) • Encouraging business-labour and other stakeholder partnerships Canadian Labour and Business Centre

32. The Canadian Council on Learning • Established in 2004 • Federally funded with $85 million over 5 years • Five ‘Knowledge Centres’ – CLBC leads ‘Work and Learning Knowledge Centre’ • 70 consortium members, 30 advisory committee members Canadian Labour and Business Centre

33. CCL Work and Learning Knowledge Centre – Main Themes • Increasing the quantity of workplace training • Increasing the quality and effectiveness of workplace training • Improving school – work transitions • Increasing access to training by specific groups, including immigrants Canadian Labour and Business Centre

34. Workplace Partners Panel • Launched in October, 2005 • Four year funding • Engagement of senior business and labour leaders • Opportunity to improve engagement and deliver business/labour perspectives on labour market issues • Gives business and labour a key role in agenda setting Canadian Labour and Business Centre

35. Workplace Partners Panel • Lead-off Activity: A series of Regional Task Forces consisting of business and labour leaders • Topic: The impact of an ageing work force on skills, skill shortages and labour markets Canadian Labour and Business Centre

36. Summary and Key Observations • Relative to G8 and OECD countries, Canada is performing well in terms of economic growth, national debt, formal levels of educational attainment and employment • Continuing cause for concern around global competition and productivity, learning and skills development, workforce demographics and skill shortages • All provincesare facing a demographic crunch; concern about skill shortages on the rise • Business, labour and public sector leaders agree that upgrading skills of current employees through training is the #1 required action to meet future skill requirements • Multipartite collaboration, including Canadian Council on Learning and Workplace Partners Panel, offer great advantages in dealing with today’s economic,labour market, and skills challenges Canadian Labour and Business Centre

37. Thank You! Shirley Seward, CEO Canadian Labour and Business Centre 55 Metcalfe, Suite 1440 Ottawa, Ontario K1P 6L5 (613) 234-0505 s.seward@clbc.ca Canadian Labour and Business Centre