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Why Is There A Skills Shortage in Canada?

Much debate abounds over the looming skills shortage in Canada when in truth it has already arrived.

Earlier this year, the Petroleum and Human Resources Council forecast a shortage of around 9,500 jobs in the Canadian oil and gas industry alone by 2015. Areas specifically affected were quoted as British Columbia, Alberta and Saskatchewan but the rest of Canada is not immune to this shortage, nor is it limited to the oil and gas industry.

The latest Global Work Monitor issued in early October, reports that 66% of Canadian employers experience difficulty in recruiting suitable candidates for certain jobs and 58% struggle to find qualified staff. 55% also anticipated a shortage of skilled workers over the next three years.

Skilled engineers were reported as sparse in areas such as Greater Toronto, Montreal and Calgary while a shortage of machinists, industrial mechanics, welders, supervisors and electro-mechanics was reported inQuebec.

What has caused the skills shortage?

A combination of factors has caused the skills shortage but the predominant cause is the imminent retirement of the ‘baby boomer’ generation who are now reaching 65 years of age.

Additional contributing factors include the increasing consumer demands of an expanding global population putting pressure on natural resources.Canadain particular is a resource rich nation.

According to The Mining Industry Human Resources Council, the Canadian mining industry alone faces a shortage of 140,000 skilled workers by 2021. Furthermore this forecast is based on current levels of production only. The numbers are poised to increase significantly if the continued investment level continues.

To put this in perspective, minerals claims in British Columbia reached record levels in the past year.  The effect of these claims will ultimately result in demand for additional workers in skilled trades roles such as engineers, equipment operators, heavy equipment mechanics and construction jobs.

 

What Can Be Done to Resolve the Problem?

A variety of solutions have been suggested to assist with the skills shortage including:-

 

  • Attract more women into traditionally male dominated industries with flexible working hours particularly for seasonal or project roles such as FIFO jobs.
  • Encourage collaboration between employers and post-secondary educational organizations to increase the level and variety of skills available among skilled trade workers.
  • Foster relationships between employers and the indigenous people ofCanadato explore untapped potential skills markets through training and education.
  • Enhanced incentives for foreign workers to move toCanada, either through permanent or temporary immigration.  In July 2012 the Temporary Foreign Workers program was expanded to allow employers to recruit highly skilled foreign workers when Canadian workers are not available.
  • Encourage interprovincial migration of Canadian residents.

 

Adverse Effects on Canada’s Economy

While solutions are being explored, the fact is the shortage of skilled workers in trades from oil and gas through to logistics, transportation and food manufacturing adversely affects Canada’s ability to compete in the global economy.  Furthermore the challenges are unlikely to dissipate in the foreseeable future.

While the skills shortage cannot be averted, certain steps can be taken to ameliorate its potential impact. The Canadian government together with educational institutions, employers and reputable, specialist staffing vendors must continue to work together for economic prosperity.

How Will the Aging Workforce Affect the Skilled Trades Market in Canada?

 

In a speech to the Economic Club of Canada in April of this year, Deputy Governor of the Bank of Canada Jean Boivin outlined the issues facing the Canadian economy in the light of the evolving demographic landscape.

According to current forecasts, by 2031 one in four people inCanadawill be over the age of 65.  In addition, people over the age of 80 are the fastest growing section of society.  When compared to 2000, the people in the over 80 age group will have doubled by 2026 and quadrupled by 2051.

It is inevitable that the economy and in particular the skilled trades market will be affected by the aging workforce.

Canada is not alone in facing this issue. The effects are mitigated slightly, however, due to the higher proportion of women in the Canadian work force coupled with its higher immigration rates in comparison with nations such asJapan.

With the so-called ‘baby boomer’ generation poised to retire over the next few years, it is not simply manpower that will be lost, but years of knowledge and experience.  In addition, the subsequent pressure on the shrinking labor pool is likely to be manifested in upward pressure on salaries.

 

Potential Solutions

Solutions suggested by Jean Boivin included:-

 

  • The possibility of individuals deciding to work beyond the current retirement age.
  • Employer flexibility regarding working conditions, including job sharing, part-time options and off-site consulting.
  • More effective use of existing employees by companies affected by the skills shortage. This included improving performance and efficiency by educating and training workers for new skills for roles such as heavy equipment mechanics, engineers, machinists, millwrights and so on.

These views are echoed by the Human Resources and Skills Development of Canada (HRSDC) who acknowledge that the majority of new positions that are created will require ‘some form of post-secondary education’.

Today, all jobs require increased technical knowledge and HRSDC suggests that as many as two thirds will require some type of further education such as apprenticeship training. Specific jobs falling into this category cited by HRSDC include supervisors in the mining, oil and gas industry, drillers and operators.

 

The Untapped Potential

Alberta Oil magazine recently discussed exploring the untapped potential of the Aboriginal population before resorting to recruiting additional foreign workers into skilled trades roles. According to Alberta Human Services, the shortage in skilled workers in the province is expected to reach 77,000 by 2019. Furthermore, the Alberta Coalition for Action on Labor Shortages anticipates an estimated total shortfall of 114,000 workers in the next decade.

Aboriginal people represent 5.8% ofAlberta’s total population. Moreover, their population growth is three times faster than the non-Aboriginal population growth within the province. The education and training of Aboriginals for the skilled trades market is supported by HRSDC.

It is clear that the impact of the aging workforce on the skilled trades market inCanada and globally will have significant consequences on the economy. As employers in the skilled trades sector adapt to the evolving demographic situation increasingly creative and collaborative solutions on a global perspective will be sought.

Why Move to Western Canada for Work?

A new report from a Canadian think tank says that the economic heart of Canada continues to be found in the western part of the country.

According to the Conference Board of Canada, cities in western provinces will see the most economic growth this year, led by Saskatoon, Calgary and Edmonton. Meanwhile, austerity measures and stagnant economies will limit growth in other parts of the country.

Rising commodity prices and the expanding resources sector in the western part of the country are having a profound impact on our cities. Massive amounts of wealth and job creation have been seen in the western part of Canada over the past decade, and the spillover affect has been profound.

The Conference Board also says that anecdotal evidence suggests a mismatch between the skills needed by employers and those available in the workforce.

Even though Saskatoon’s economic expansion is expected to slow from 4.8 percent in 2011 to 3.6 percent in 2012, it still tops the country. The report highlights Saskatoon’s growing housing and manufacturing sectors, aided by commodity expansion in other parts of the country.

Likewise, a surge in the construction sector should give Calgary’s economy a boost. The Conference Board expects the city’s economy to grow 3.5 percent this year, the second most in the country. The report also expects greater consumer spending and job creation this year.

Edmonton’s economy is projected to grow 3.2 percent this year, third in the country. Like Calgary, Edmonton is also benefiting from rising commodity prices and the expansion of the oil and gas industries in the province Western cities continue to dominate the top of the Conference Board’s list, with Regina, Vancouver and Winnipeg all expecting better than two percent growth this year.

Eastern Canadian cities should still enjoy economic growth this year, but far less than their western peers and mostly below the national average.

The report says that Toronto’s economy will grow 2.3 percent in 2012, down from 2.5 percent last year. Meanwhile, the economies of Quebec City, Ottawa-Gatineau, and Montreal will all grow less than two percent this year as the federal and provincial governments cut their budgets and reduce public sector spending.

Overall, the Conference Board expects Canada’s economy to grow 2.1 percent in 2012, a slight drop from 2.3 percent growth last year. Between 2013 and 2016, it also projects that the economy will grow at an average rate of 2.6 percent annually.

Shortage of Skilled Trades

There is a skills shortage in Canada. The Canadian Federation of Independent Business reports that almost half of their members said that the shortage of qualified labour was the most important issue they face. Things are expected to get much worse if nothing is done about it now. The problem remains that the population is ageing and there isn’t sufficient population growth to compensate for the numbers of skilled workers who are retiring.

The first baby-boomers have reached retirement age already. In 2015, the government estimates that almost half of the workforce (48%) will be between the ages of 45 and 64. By 2020, most boomers will be in retirement and 17.9% of the population will be 65 or over, compared to 12.5% in 1999. By 2026, Statistics Canada expects that more than half the population will be over the age of 43. As a result, by 2020, Canada could be short about 1 million workers.

The sectors that are experiencing the most significant shortages, are sectors such as natural resources, construction, manufacturing, and information technology. Skilled trades in high demand include heavy equipment operators, industrial mechanics, industrial electricians, building trades, steel and iron trades, automotive trades and welders.

The problem has already affected some sectors. In the steel industry nearly 45% of all tradespersons retired almost five years ago. In the natural resources sector ten years ago, 35% of the workforce was 45 or older and 9% were 55 or older. In the construction industry, 12% of the workers were aged 55 or older. Manufacturing showed similar results where 10% of the workers were 55 and up.

Economists say that the skilled trade worker shortage is affecting Canada’s ability to compete on the global market both now and in the future. Economic trends are favouring countries and production facilities with a large pool of skilled workers.

The shortage of skilled trade workers also means that, as consumers, we may need to pay more for skilled trade services, have to wait for these services to be available to us, and it may take longer for important infrastructure projects, such as roads and hospitals to be completed. A skilled trade shortage will affect every Canadian.

There are key elements to ensuring Canada has what it takes to guarantee that we have the right talent at the right time:

  • Ensure companies and post-secondary education facilities are working to attract more Canadians into the skilled trades.
  • Improving incentives for workers to move within Canada
  • Consider increasing permanent or temporary immigration

Finding top talent is inter-provincially borderless. Having access to the skilled people who are willing to relocate, be mobile, certified, and ready to start employment is what will ensure that we have the right talent to deal with this shortage.

Is there room to grow/move up and will there be training opportunities?

There most certainly is and yes there will be. All of our clients are looking for people interested in moving up through the ranks. One of the great perks offered is the training and mentoring available and opportunities to develop into other areas. Where you end up within these organizations is entirely up to you. You will be given all the training and opportunity you need to succeed!