The Talent Shortage in North America

How Collaboration is the Key for Economic Growth

Workforce development is an issue that has been at the forefront of economic strategies and community discussions across North America, as the needs of the workforce continue to be misaligned with the conditions of reality.
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As businesses struggle to fill positions that are necessary for their growth, more needs to be done to create a pipeline of talent. This is why workforce development has become an important concept for economic development professionals across Canada and the U.S.

Economic development agencies are working hard to bring together industry associations and leaders in education (K – 12, college, university, career and technical training centers, etc.) and industry to identify the needs of local economy and strategize how best to address these challenges before they become a hindrance to economic growth and prosperity.

What makes workforce development efforts unique is the role collaboration plays in a program’s success. While people reside in local communities, employment can be local, regional and, thanks to advancements in travel and technology, even national and international, and as a result, require a local and global approach to talent.

Workforce development is a Western concept that emphasizes the importance of people and the role human resources play in the economic success of a business, a community, a region, a state and a nation. The goal of workforce development initiatives and programs is to enhance economic stability and viability as well as community prosperity through worker education, training, upskilling and reskilling activities. It helps to realign the labour market with the needs of the greater economy.

In Canada, a total of 400 000 jobs remained vacant throughout the summer months, with the majority of the openings in British Columbia, Quebec, Ontario and New Brunswick, proving that it is an issue that spans the nation from coast to coast. Job vacancies are most common in the personal services, construction, hospitality, enterprise management, health and education, agriculture, professional services, transport and manufacturing sectors, according to the Canadian Federation of Independent Business (CFIB).

While jobs remain unfilled, the unemployment rate has reached a historic 40-year low of 5.8 percent. A total of 1.1 million Canadians remain unemployed, proving that a mismatch of skills exists in Canada. What is happening in the United States isn’t much different in this regard, though wage growth seems to be stronger south of the border.

Governments, agencies, organizations, educators, educational institutions, human resources professionals, industry associations and business owners alike have all recognized the need for talent development and have come together to collectively address the problem.

Most workforce development strategies revolve around labour mobility and recruitment, as well as reskilling and upskilling to better address the workforce needs of the economy while promoting full employment for residents. This has been especially important as the exodus of aging and retiring workers continues to take place.

Worker mobility can help to alleviate the labour shortage, though it will not provide a comprehensive solution. There is a growing number of interprovincial workers in Canada but a labour shortage persists, which means new workers need to be attracted and trained with the skills that address the needs of the market.

In 2008, the number of interprovincial workers reached a peak of 453 000 workers who leave their home in search of secure employment and a good living, even if it takes them away from home to do so. While residence is local, employment is both local and regional and any solutions will require both a local and regional focus.

A focus on reskilling or training is often the most successful way to meet the needs of the local economy, and to do that it takes collaboration between the various levels of government, local, regional and state educational institutions and industry stakeholders. Collaboration enables the workforce to be flexible, adaptable and even proactive to changes in the economy. If a disconnect exists between education and industry, the likelihood of the needs of the economy being met are grim. This has been part of the problem facing the economy today.

For many years, high school students were encouraged to pursue a college or university degree if they were to have any hopes of securing a professional career and a bountiful livelihood to go along with it. Now, many millennials are educated but lack the necessary skills to fill the various positions that are available that require a specialized skill set. As emphasis moved to the pursuit of a college or university degree out of high school, it also had an impact on the trades. Funding for apprenticeship and training programs was reduced and due in part to the offshoring of manufacturing and industry, skilled labour was no longer being developed locally. When industry started to make its return, the talent simply wasn’t available and millennials had officially become the largest age demographic in the workforce, overtaking both Generation X and Baby Boomers for the first time.

Recognizing the demographic shift that has taken place in the labour market, new efforts are being made to promote the various opportunities that are available and the quality of life these careers can afford to millennials and their young families. Many of the opportunities that are available are in advanced manufacturing and other industries where automation is being employed and creating new demand for skilled labour. Where skilled labour is not available, robotic functions are.

More and more companies are investing in technology and although certain activities can be mechanized, a new demand for labour has arisen. It is perceived that robots are going to replace workers, and while it is true of certain tasks, workers are still required to maintain and operate the automated systems, which requires new skill sets and training.

While some companies have the means to invest in capital equipment, automation and in-house training programs to lessen the impact of the labour shortage, for many, resources are not available to be able to develop talent at the rate it is required. Further, in some places, talent is simply not available to train.

This is why governments at all levels are stepping up to the plate to provide resources, both in terms of training and recruitment. Businesses rely on talent for productivity and these businesses are the backbone of the functioning and strength of the local, regional, state, national and even global economies.

Companies may not be able to solve the labour crunch on their own, but there are actions that can be taken to attract and retain talent. Now is the time when competitive pay, fair working conditions, a positive work culture and appreciation go a long way in not only attracting employees, but remaining profitable for the long term.

As wage growth in Canada has been weak, a strong culture could be the edge a company needs in a highly competitive job market. Unless corrections take place in the labour market – be it through training or recruitment – without a new cohort of skilled labour, the economy will not be able to achieve its true growth potential and it could have far-reaching economic implications as a result.

It is time to fully leverage and optimize available resources to ensure that companies and entire industries can remain profitable for the long term. And the only way this will be achieved is if there is a collective effort from government, education and industry to understand, address and evolve with the changing labour market realities present in the economy.

Industry Changemakers

The construction industry has historically been slow to evolve, drawn to tradition over technology. As the industry is in a state of rapid innovation and advancement, organizations like the Toronto Construction Association (TCA) are working tirelessly to build strong member businesses that won’t fall behind.

June 18, 2019, 4:19 PM EDT