Canada’s “Skills Gap” Problem Explained

The significant skills gap in Canada’s workforce has only widened during the pandemic, according to a report by the Conference Board of Canada, with experts saying it is a “critical time where the country needs to invest to create a more skilled workforce if it wants to. to remain globally competitive.

Since the start of the pandemic, Canadian businesses have relied more on digital tools and technologies. According to a recent report onDigital skills of today and tomorrowby the Conference Board of Canada, in partnership with the Future Skills Centre. The Conference Board report predicts that over the next 10 years, nine out of 10 jobs will require digital skills.

“We definitely have a labor shortage, but we also have a skills shortage because business needs are changing due to increased automation,” said Dr. Tricia Williams, director of research, evaluation and knowledge mobilization in Future Skills Center, told CTVNews.ca in a phone interview Thursday. “So people who find their skills obsolete should upgrade or invest in new skills.”

According to a statcan report, more than half (56.1%) of Canadian businesses in 2021 said their current workforce was not fully competent to perform the tasks at the required level. The majority of companies reporting skills gaps were either large companies with more than 100 employees (93%) or medium-sized companies with 20-99 employees (90%). Three-fifths (60.3%) of businesses reported facing at least a negative consequence to their activities due to the lack of skills in their workforce. While regional disparities were minor, the distribution between different sectors was uneven. For example, the accommodation and food services sector had the highest skills shortage rate of any other sector, with nearly four-fifths (78%) of businesses struggling to hire.


Skills with the biggest gap

According to figures published by StatCan, companies reporting skills gaps indicated that technical, practical, or job-specific skills had the highest gap (57.5%), followed by problem solving. (46.2%).

Another report on global digital skills readiness gave Canada an index of 23, which is below the global average of 33 (out of 100). The Salesforce 2022 report, “Global Digital Skills Indexasked 23,000 employees in 19 countries. Canadian employers have also expressed concerns about wage inflation, as well as the loss of talent to other countries, such as the United States, where wages tend to be higher.

The United States had a higher index of 36, which shows a high level of readiness for digital skills in the workplace. According to the report, at least four in five Canadians (81%) felt they lacked the resources to learn digital skills. Potential employees surveyed rated themselves as beginners in AI technology, coding, and product development and management.

The digital skills needed in the workplace in the age of the pandemic go far beyond basic digital literacy. Companies need workers with stronger capabilities and a deeper understanding of advanced digital areas such as data analytics, cybersecurity, and cloud technology. With large tech companies are opening offices or expanding their existing workspaces in Canada, employers are looking for workers with advanced digital skills to solve problems and help make informed decisions.


Skills gap in the workplace by generations

Much of the Canadian population is changing due to aging baby boomers and increased immigration for a younger workforce. Millennials in Canada represent the largest share of the working-age population (33.2 percent) but many struggle to meet the demand for skills in the workplace.

According the Salesforce reportonly 40% said they were very prepared for digital skills in the workplace, compared to 50% in the United States. Five years from now, only 23% felt they would be “very well equipped with resources to learn digital skills.”

Skills gaps and willingness to learn new skills also vary across generations.

Only 12% of baby boomers in Canada, according to the Salesforce report, were actively learning/training digital skills. After five years, fewer baby boomers (8%) want to actively learn digital skills. While the younger workforce (Gen Zers) showed more enthusiasm and ambition in learning digital skills, only 8% said they were “very prepared with mid-level digital skills.” of work”. Fewer Gen Zers in Canada (17%) were currently learning/training digital skills compared to millennials (24%).

But digital skills may not be the only gap facing the Canadian workforce, Williams said.

Employers also report critical gaps in social and emotional skills such as collaboration and problem-solving management. In fact, older Canadians, she said, have more valuable social and emotional skills that are lacking in today’s labor market, and these include more experience and stronger emotional and social skills developed. over time.

“But I certainly think older Canadians who want to stay active in the workforce should also think about upgrading their skills and keeping up to date with current skills requirements, including digital technology.”

Conversely, she said that as digital natives, Gen Zs need to engage in conversations that are not limited to the hyper-connected digital world. “So we have to make sure that we develop and balance both those numerical and soft skills,” Williams said.

Another report from The Conference Board of Canada showed that the six skills for which job vacancies lead to the highest costs are active listening, critical thinking, reading comprehension, speaking, monitoring and coordination. These skill-related vacancies cost the economy as much as $25 billion in 2020 – approximately 1.3% of Canadian GDP.

According to a recent report on vacancies by the Conference Board of Canada.

Solutions to close the skills gap

To meet the demands of this unique labor market—retirement recordslabor shortages, layoffs/hiring freezes and impending recession – it becomes even more important that Canada’s workforce is prepared for what lies ahead.

“This is a critical time for Canada to invest in skills to stay competitive with the United States and Europe,” Williams said.

The companies provide internal training to fill the skills gap in the workforce. More than seven in 10 companies (71.0%) offered training to their employees in 2021. Almost all of them were large companies (97.6%). But Williams said that might not be enough because only big companies have the means to fully digitize their workforce.

With labor in small and medium-sized enterprises representing the largest proportion of the working populationit becomes essential that professional training opportunities are available to employees of all company sizes and are not reserved for large, wealthy companies, she said.

Williams said thinking around skill acquisition needs to shift to lifelong learning. “Now we’ve started to pay more attention to micro-credentials and what that looks like in practice,” she said.


Immigration is another tool to attract those with a specialized skill set. The system of training, education, experience and responsibility (TEER)that Immigration, Refugees and Citizenship Canada (IRCC) will implement in November, would invite applicants based on occupation, language or education rather than the traditional comprehensive ranking system.

“This will help alleviate some of the labor shortages seen across the country in various sectors,” said Rick Lamanna, director of Fragomen Canada, an immigration service provider, in a telephone interview Thursday. “This is an attempt to bridge the skills gap and clearly define what is required to work in a profession combined with targeted draws.”

But Williams said Canada must also recognize and harness the current skills of immigrants. “Because, if we can’t find a way to recognize their skills and get them to use them, then we’re really going to be way behind our peers,” she said.