Canada’s skills gap – Fact or fiction? Depends on who you ask

Labour shortage. Skills mismatch. Skills gap. Long has the debate been building. Recent contributions to the conversation include  questions around the reliability of job vacancy data and reports from the Parliamentary Budget Office (PBO) and TD Bank that argue there is little evidence of a national or economy-wide labour shortage in Canada. This debate is not isolated to Canada, and in fact there are numerous dialogues, including some debate about the very existence of a skills gap in the United States. Aaron M. Renn, author of the Urbanophile website, makes some interesting arguments that view the concept of a skills gap in a different light, including thatemployer behaviours may be more of a driving factor than a lack of qualified talent in the labour pool in the US.

So what does all this actually mean for practitioners on the ground? To find out, it’s worth taking a closer look at these reports as well as those on the other side of the skills gap debate.

While the PBO’s Labour Market Assessment 2014 doesn’t support a general labour shortage at the macro-economic level at this time, the report does acknowledge exceptions in specific regions and sectors. This is based largely on the Bank of Canada Business Outlook Survey, in which 26% of firms indicated they faced labour shortages that would impede the ability to meet demand. These shortages are related to hiring for specific positions or skill sets. The sample size for this research was approximately 100 companies selected based on their contribution to GDP.

Garnering input from small businesses, the Canadian Federation of Independent Business (CFIB), which represents over 109,000 small businesses across the country, report through its Business Barometer January 2014 that 32% of businesses surveyed  identified a shortage of skilled labour, while 16% indicated shortage of un/semi-skilled labour. This challenge is cited as an important limitation on growth.

What is clear is that the skills gaps that do exist are specific to regions or sectors, making it important for those in economic and workforce development to know their local talent landscape, both in terms of hard data and  talking to job seekers, employers, educators, labour unions, and intermediaries. It also means looking at current needs as well as future demand driven by economic growth and demographic shifts.

While the reasons may vary – be it competitive wages, employer expectations for inflated education levels or higher skills than required to carry out the work – the fact remains that we need to connect more workers to opportunities and more businesses to talent that supports business growth and competitiveness and improves employee quality of work experience.

This post originally appeared in TINAN 55Subscribe to TINAN to get the latest economic development news and resources.