Canada’s skills shortage will get worse unless companies invest in training, experts warn

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Radhika Panjwani is a freelance writer from Toronto.

• The skills shortage in Canada is exacerbated by an aging demographics, digital literacy and a mismatch between immigration and labour market policies.
• Canadian employers spend $240 per employee on training annually whereas our OECD peers invest $750.
• The future of work will demand a work force that’s not just technically savvy, but one that has demonstrable skillsets such as critical thinking, co-ordination, judgment, decision-making and complex problem solving.

Over the next decade or so, at least half of the Canadian jobs will require a new mix of skills, even if the job title remains same. Unless employers make adequate investments and double down on training, the widening skills gap will become even more pronounced, experts warn.

“We’re hearing from employers that they’re not finding candidates with skills they want and need in the current labour market,” said Tricia Williams, director of research, evaluation and knowledge mobilization at the Future Skills Centre, a skills innovation and policy think tank launched by Blueprint, Toronto Metropolitan University and The Conference Board of Canada. “For instance, we have known at least for the last decade or so that we have shortages on skilled trades, but it’s now starting to hit some critical pressure points, especially with the need for housing and infrastructure.”

An aging population, technological changes and digital skills needed for jobs, an incompatible immigration policy that has failed to bring people with the right skills and conversely, the lack of an inclusive climate for experienced newcomers to succeed, such as a lengthy accreditation process, has all created a disparity in the labour market, Ms. Williams said.

In 2022, a report by the Future Skills Centre and the Conference Board of Canada estimated that over the next decade nine out of 10 jobs in Canada will require digital skills. To adapt, innovate and grow Canadian businesses will need a work force that’s proficient in leveraging – and applying – digital skills and problem solving. To get there, the reports says Canadian workplaces need to prioritize training and upskilling to bridge the digital skills gaps needed to remain competitive.

As part of the study, researchers heard from employers that the digital skills they need go beyond basic digital literacy. They need workers who understand cybersecurity, cloud computing and data analysis along with problem solving, decision-making and critical thinking skills. In short, a healthy blend of technical and non-technical skillsets.

Lacklustre investments

More recently, Geneviève Bich, vice-president of human resources at Metro Inc., and Pedro Antunes, chief economist at the Conference Board of Canada, shared in a Future Skills Centre podcast that not having an adequate work force affects a company’s productivity and the country’s economy. In Canada, Ms. Bich said, four out of 10 positions currently take more than three months to fill.

A big concern for the economy as a whole is the lacklustre level of private capital investments in machinery, equipment, research and intellectual property. When compared to the U.S., this gap’s rather significant, Mr. Antunes said.

Both the experts said companies need to introduce upskilling and training initiatives for their employees.

“Skills development is both a way to develop our work force and to ensure that it maintains its know-how and remains relevant to the company’s mission,” Ms. Bich said. “But it’s also key that we, [the employer] attract the right people. Employees must know that we are going to support them in the transitions that we see coming. We have to not only develop their technical skills – task-specific skills and tool-specific skills – but their leadership skills as well.”

Ms. Williams of the Future Skills Centre, an organization with a mandate to prepare Canadians for the changing economy and future of work, said employers in Canada invest significantly less in training than their international peers.

On average, Canadian employers spend $240 per employee annually on training. This mostly includes health and safety, onboarding or orientation. To compare, OECD (Organization for Economic Cooperation and Development) countries spend $750 per employee annually. This amount is much higher than $750 in the U.S., she said.

Training done right

Stephen Muscat, vice-president of global talent acquisition at Altus Group, a Toronto-headquartered provider of asset and fund intelligence for commercial real estate, said his company has an internal training hub for skill-building and development called Altus Intelligence Academy (AIA). The curriculum offered to employees at the academy covers both soft and technical skills and compliance training and is delivered through technology platforms and in-person instruction.

Whether employees want to hone their communication and leadership abilities or advance their expertise in specific technical domains, they have access to training that supports their career goals, he said.

“Our commitment to continuous learning is yielding positive results,” Mr. Muscat said. “We are witnessing a notable increase in internal mobility as employees take advantage of the opportunities for advancement and skill enhancement provided by the AIA. This learning and development model not only creates additional career pathways for our current staff but also enhances our appeal to potential new hires.”

Soft skills are must-have skills

Mr. Muscat said he has noticed candidates now have less traditional summer job experience compared to previous generations. He said having a summer job allows teens and young people to learn and acquire skills and habits to boost careers.

“Soft skills such as communication, teamwork, problem-solving and adaptability are critical for success in the modern workplace,” Mr. Muscat said. “These skills can be honed through participation in competitive sports where teamwork, discipline and resilience are essential. Volunteering offers another excellent opportunity to develop soft skills as it often requires collaboration, leadership and empathy.”

Also, involvement in student government or clubs provides practical experience in leadership, negotiation and organizational skills. Even working in family businesses can be an invaluable training ground. It will teach young people responsibility, customer service and the nuances of running an enterprise, Mr. Muscat said.

Hard skills such as technical knowledge, software proficiency and industry-specific expertise, can be learned through formal education, online courses, internships and hands-on experience in various projects.

Ms. Williams agrees. She said lifelong learning is a crucial differentiator for those who want to thrive.

“At the Future Skills Centre, we’re always trying to anticipate where the puck’s going,” she said. “We study trends and ask; how do we make sure we’re also thinking about what the labour market needs will be in 10 or 15 years from now? The reality is labour and skills are not just a quick tap that you can turn on and off. Things we do now will influence the future.”

What I’m reading around the web

• The “slow movement,” appears to be gaining traction among companies that value mental well-being and quality of work rather than the output, as Fast Company reports.
• Author, psychologist and researcher Tessa West says when people attempt to mask anxiety with overly polite feedback at work, it’s harmful. She has three tips.
• This Strategy + Business article illustrates the power of setting small goals for success.

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