A look at the growing skills gap and importance of employee mobility (Guest Commentary)

Canada needs to take hard look at tax regulations, red tape that hampers inter-provincial mobility
By Stephen Cryne
|Canadian HR Reporter|Last Updated: 03/12/2014

The number of high-paying jobs sitting unfilled because of a growing skills gap in Canada’s labour pool is a real threat to the nation’s economy.

Since 2006, Canadian employers have created more than 1.6 million jobs — more than any other G7 country. Most of those have been full-time, private sector jobs requiring high skills and paying high wages.

Yet Canada is facing a skills gap that spans many industries and regions. In the short term, key strategies to address this include providing employers with better access to skilled workers under the Temporary Foreign Worker Program (TFWP) and improving internal mobility, making it easier for Canadians to move to regions where jobs exist.

Hiring qualified Canadians is the first choice for Canadian employers. But the reality is those workers are not readily available.

Research conducted by the Canadian Employee Relocation Council (CERC) in 2012 with Ipsos Public Research found only two in 10 Canadians would be very likely to move to another city for employment. (In contrast, Italians are twice as likely to move to another city for work.)

This is before we consider the barriers between the provinces around certification and skills recognition that curtail the mobility of the Canadian workforce.

In 2013, as part of a series of reforms to the TFWP, the federal government suspended the Accelerated Labour Market Opinion (ALMO) program. That program, which expedited the entry of temporary workers into Canada, had cut the amount of time it took to process a labour market opinion application from more than 14 weeks to fewer than 10 days.

The suspension of the ALMO program in 2013 has pushed those processing times back to more than 14 weeks.

In addition to very stringent requirements on employers to comply with the TFWP regulations, employers found to be in violation of the rules face fines, risk the possible imprisonment of executives and can be banned from the program and listed as ineligible employers on Citizenship and Immigration Canada (CIC)’s website.

No company was fined or listed on the CIC website in 2013, leaving employers to question what really lies behind the changes.

In December 2013, in an effort to learn how suspension of the ALMO is impacting business operations, CERC conducted a survey of employers that access the TFWP for high-skilled managers and professions.

Since the program was suspended:

•62 per cent say the changes have resulted in increased costs because of the delays

•55 per cent say the changes have caused project delays

•more than one-third say the delays have resulted in lost business

•just under one-third (30 per cent) have moved work outside of Canada.

In addition, many companies say they have lost talent because employees looking to transfer into the country have been deterred by the lengthy delays and the subtle message they are unwelcome in Canada.

Of equal concern are proposed changes to the rules governing intra-company transfers (ICTs). The ICT program allows companies to transfer employees — invariably, high-skilled employees, executives and senior management — between operations that bring international leadership, innovation and global expertise to Canadian employers. The changes would redefine specialized knowledge workers and impose a minimum experience threshold.

The changes would also run counter to the trade agreements Canada has with many of its trading partners, including the United States and the newly inked deal with the European Union (EU). There is a lot at risk and it is not clear why the government has targeted a program that delivers such a rich benefit to our economy.

The 2014 budget appeared to show some softening of the government’s position on temporary foreign workers with a proposal to provide employers with expedited access to a highly skilled stream. However, companies located in areas of high unemployment may not be able to participate in the program and will have to follow the lengthier process.

All of these changes come at a time when the federal government’s own research suggests higher vacancy rates exist in skilled trades and science-based occupations. The government also notes proportionally fewer Canadians graduate with a university degree in high-demand fields such as science, technology, engineering and mathematics. And, according to the Canadian government, it appears Canada lags behind its peers in business operations.

The U.S. and the EU have their own skills mismatch to contend with. In the U.S., the unemployment rate among people without a high school diploma is triple the rate of people with a bachelor’s degree or higher. In the EU, some 24 million people are unemployed — yet six million jobs cannot be filled because of a lack of qualified workers.

Research conducted by consulting firm McKinsey & Company estimates employers face a major shortage of highly skilled workers on a global scale of 38 to 41 million skilled workers, with one in 10 jobs going unfilled by 2020. In that same 2012 report, it is estimated there will be a surplus of 90 to 95 million low-skilled workers — or 10 per cent of the supply.

The global skills shortage is raising concerns among leading think-tanks and research institutions around the world. The World Economic Forum has been taking a close interest in the matter, releasing in a series of reports including the landmark Stimulating Economies through Fostering Talent Mobility, which highlights the importance of talent mobility to a dynamic economy.

This is not just an issue about temporary workers in Canada — it’s also about building a skilled workforce to compete. It is time for a comprehensive review of all aspects of Canada’s immigration programs and future labour force growth.

Canada must develop a model of economic immigration that supports economic growth and labour force needs. At the same time, work must begin immediately to focus more resources on transitioning a greater number of temporary workers into permanent residents.

Steps must also be taken to improve mobility for all Canadians to work and practise their trade or profession wherever they wish to do so. This must also include changes to current tax regulations that will support greater employee mobility from regions with high unemployment to those regions with abundant job opportunities. It is time for full mobility in Canada across all occupations.

All of these measures will go a long way in helping to ensure employers have the skills needed to compete at home and on the global stage.

Stephen Cryne is president of the Toronto-based Canadian Employee Relocation Council (CERC). For more information, visit www.cerc.ca.

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