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Is there really a skills shortage in Canada?

‘Shortage’ may be largely the fault of employers

While there are definitely shortages of skilled people in certain fields and geographic regions (skilled trades and the Alberta oil patch spring to mind), I seriously question whether there really is a major skills shortage in Canada.

With far too many people still unemployed or underemployed, it doesn’t seem to me like we’re going to see major labour shortages in the near future. And many people are now delaying retirement because they can’t afford to retire and are not ready to pass the torch just yet. We also continue to bring in fairly large numbers of immigrants, many of whom have a difficult time securing meaningful employment even after being here several years.

Employers too picky

I know some readers will disagree, but to me the problem is employers are being too picky. When people say there’s a skills shortage, they often really mean they can’t find people who have done the exact same job in the exact same industry, have the exact qualifications they’re looking for and are willing to work for the salary they’re willing to pay.

Some employers are so picky practically no one seems good enough for them. I wrote about this a while back in a previous blog post. Employers need to be willing to give more people with slightly non-traditional backgrounds a chance.

It also seems like employers have largely given up training and developing people. For quite a while, the prevailing philosophy at many companies has been to hire only people who can hit the ground running from day one. However, that’s often an unreasonable expectation, even with respect to an “ideal” candidate because cultural norms, values, policies, processes and technologies usually vary across organizations.

Professor Peter Cappelli of the Wharton School of Business at the University of Pennsylvania would likely agree. Cappelli’s new book Why Good People Can’t Get Jobs argues the skills gap is a myth.

He believes perceptions of a skills gap relate to employers’ difficulties in filling vacancies coupled with concerns educational institutions aren’t adequately preparing people for the workforce. Cappelli argues there’s no evidence to support the opinion that schools are getting worse — at least not in the United States.

He also argues increasing credentialism is proof more people are overqualified and the workforce is becoming more highly educated (in many cases, Cappelli argues, employees would be turned down for their current jobs if they reapplied for them today). He also points out salaries are not really increasing, proving there’s little evidence of an actual labour shortage.

On top of that, many organizations have drastically cut their training budgets and insist on hiring only from their competitors. Cappelli argues this creates an artificially small pool of candidates to work with.

What can employers do?

There’s no question many employers are having difficulties filling jobs. Many people point to the large volumes of unqualified candidates applying for jobs as evidence of this frustration.

However, I believe that’s more a symptom of the poor job market with so many people desperate for work and the fact individuals can apply for jobs online from anywhere and at little to no cost. Employers just need to be more creative in their candidate sourcing strategies — “post and pray” doesn’t cut it anymore.

Employers can overcome the perceived “skills shortage” by being creative and returning to hiring for potential and competencies rather than just previous experience. It’s more challenging, expensive and time-consuming, but employers also need to provide meaningful training and development opportunities — something that will ultimately result in increased employee retention and engagement.

In fairness, however, I do believe in many ways colleges and universities (and even high schools) are failing to adequately prepare graduates for the workforce. For example — and I may be somewhat biased given what I do for a living — it seems like many recent graduates lack adequate communication skills. In some cases, therefore, employers may need to start providing remedial courses in basic skills such as business writing, numeracy and business etiquette.

Some people argue the skills gap is largely a myth perpetuated by employers and their supporters to drive wages down and open up the job market to temporary foreign workers and others who are willing to work for less. While I don’t believe most employers are that devious, I agree with Cappelli that at least some of the problem can be attributed to employers themselves.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.  

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Brian Kreissl

Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.
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8 Comments
  • RE: Symptom or Cause
    Thursday, August 16, 2012 4:32:00 PM by Brian Kreissl
    I agree, but if the educational system isn't equipping people adequately there's only so much an employer can do. If it's just that someone doesn't know how to communicate effectively in a business context, employers can remedy that far easier in-house (or in partnership with an educational institution through customized programs) than by lobbying for change within the educational system as a whole. If a recent graduate's skills and abilities are otherwise pretty sound, I don't see why employers shouldn't help those employees to succeed.

    Thanks,

    Brian
  • RE: Definitions
    Thursday, August 16, 2012 2:36:00 PM by Brian Kreissl
    Good point.

    Of course, every recruiter, hiring manager and employer ideally would like to find the "perfect" candidate if possible, but I think employers have become somewhat used to being incredibly choosy when it comes to finding people.

    To me it's better to "think outside the box" a little and consider candidates who bring the appropriate skills to the table in ways other than that normally found in the typical "cookie cutter" candidate. It's certainly better than hand-wringing for the best part of a year that there are "no suitable candidates out there." Employers need to be a little more flexible and creative when it comes to recruitment.

    Thanks,

    Brian


    There is a question of definition. If I define a skills shortage as not being able to find people who can hit the ground running from day one, which is from the employer's perspective the most efficient and effective, then the shortage is real. Saying that if the employer finds people and invests in them to improve their skills, the employer can make the skills shortage go away, doesn't mean the employer was being picky or imagining a "myth" of a shortage.

    It is perhaps an inevitable consequence of increasing specialization that specific skills will be less transferable and that education systems will be hard pressed to create specialists, so it makes sense that employers will have to develop strategies to create their own specialists using their internal knowledge.
  • RE: Good points, but labour doesn't = skills
    Thursday, August 16, 2012 2:28:00 PM by Brian Kreissl
    Good point. There are obvious differences between the two concepts, although they are closely related.

    However, people do tend to use the terms interchangeably, and I think it's fair to say that many people are saying there is currently a skills shortage for many jobs, and that we are starting to see a shortage in the overall supply of labour as well. While my blog post started off by conceding that there are skills shortages in some areas, I still believe this is overblown in many instances, and that we aren't seeing an overall labour shortage either.

    Your example about someone with a BA not being able to teach graduate level neuroscience makes sense. However, I wasn't saying that. It was more like an HR professional with experience in banking could work for an insurance company, or a fully qualified estates and trusts lawyer from the UK who completed her accreditation requirements in Canada could be qualified to work as an estates and trusts lawyer here as well. That was my point about employers being too picky.

    Thanks,

    Brian


    Brian,

    You make a lot of good points, especially with regards to employers expectations to hire 'job-ready' youth right out of post-secondary institutions. No matter how many years of schooling an individual receives there is still a whole host of on-the-job skills that can only be gained through co-ops, internships, and actual on-the-job training. However I would caution you not to use the terms 'skills' and 'labour' interchangeably. I have no doubt you recognize the difference, but using them interchangeably in the first two paragraphs of your blog may perpetuate the industry misunderstanding of what kinds of shortages Canada faces. A young grad with a BA in political science CANNOT teach graduate level neuroscience...