Canadian spending on training stagnant

Ottawa calls for joint action to improve workforce; while research shows employers under-investing in T&D.

While employers bemoan the lack of skilled labour, statistics show Canadian businesses are doing little to fix the problem.

Much has been written and said about the changing economy, impending labour shortages and the importance of learning and development as a necessary response, but Canadian organizations have in reality done very little to adapt, said Stephanie Harris-Lalonde, author of a new report from the Conference Board of Canada on T&D.

Specifically, spending on training has remained essentially unchanged since the early ’90s.

Last year, Canadian businesses spent, on average, $859 per employee for T&D. In 1993, they spent about $849. In 1996, employees in Canadian organizations were doing about 36 hours of training a year but that dropped to 30 hours last year.

“One of the key messages in the report is that employees’ skills and knowledge are critical to success and it would just seem reasonable that we would see increases around learning and development but in general that has not been the case,” said Harris-Lalonde.

She said it is difficult to explain why companies aren’t spending more on training. Everything seemed to suggest there would be growth in T&D since it is widely held to be a critical component for improved performance.

Some companies still believe training employees only prepares them to leave for a position with another firm, but time and again, the benefits of training are shown to outweigh the risks, she said. In fact, the survey of 174 organizations showed those that train more are also more profitable.

The survey was part of a worldwide study conducted by the Conference Board. It reveals Canada lags behind the United States, Europe, Asia and the Pacific in terms of per employee spending on T&D.

“The cumulative effect of Canada’s relative under-investment in T&D, year after year even in good economic times, may lead to a gap in essential knowledge and skills that will be difficult to bridge,” wrote Harris-Lalonde in the report Training and Development Outlook 2001. “If Canadian organizations are going to be able to compete effectively, let alone surpass international competitors, investment in the development of human capital — a key to productivity and growth — must increase.”

The study comes at a time when the federal government is calling for a renewed effort from all stakeholders to improve the skills level of Canada’s workforce. The government itself appears set to play an increasingly active role. Three roundtables on creating what Jane Stewart, Minister of Human Resources Development Canada, calls “a national skills agenda” were held in late winter and early spring. Summary reports from each session were presented to the minister in late June and the government is expected to table a position paper by fall outlining strategies for improving the skills levels of the workforce.

“These valuable documents underscore that Canada’s skills challenge is a national challenge and that progress on this priority issue will require a long-term partnership among governments and with business, labour, educators, community groups and individual Canadians,” said Stewart.

One of the roundtables focused on how to increase learning opportunities and remove barriers to lifelong learning, examining some of the issues raised in the Conference Board study.

“Participants in the National Roundtable on Learning Roundtable expressed a widely held concern that Canada is not moving fast enough to increase learning opportunities and to remove barriers to learning,” said Graham Lowe, author of the report.

Lowe called the numbers from the Conference Board study, “a cause for concern,” because it suggests that even during a time of peak economic growth, companies were unwilling to increase spending on training.

He suggested that as the period of high growth coincided with immense change and often unmanageable workloads, many employers may have felt there was no time to do more training.

As well, many organizations still haven’t seen enough convincing evidence that investments in training have a positive return, he said.

The government can take steps to encourage employers to do more training, Harris-Lalonde said. Financial incentives could be offered but not simply in the form of tax cuts, since that would not guarantee extra money would be spent on training.

One of the other roundtables looked at creating a more efficient labour market. Among the recommendations was a call to ease the process required to bring temporary workers into Canada. Late last month, Minister of Citizenship and Immigration Elinor Caplan said her department will overhaul immigration policies to bring skilled immigrants into the country faster.

Some companies haven’t really been affected by technology developments, global markets and the new economy and therefore haven’t been hurt by a lack of training yet, said Harris-Lalonde. While others already playing in the advanced knowledge economy have had to increase training or perish.

“We certainly have increased our budget,” said Frank Price, vice-president of human resources with Calgary-based NexInnovations. “On a per capita basis but we’re probably in the $2,000 to $2,500 range,” he said. Total spending is now about $3.5 million per year representing around five per cent of payroll.

“Our focus has been on the desktop support side of the business. If we hadn’t focused on certifications we wouldn’t be where we are today.” Training has become necessary not only for NexInnovations’ technicians, but its sales force as well, he explained. A lot of companies won’t even allow vendors to sell their products if the sales people aren’t also certified.

But it isn’t just knowledge-intensive firms that have to increase training and development, said Harris-Lalonde. For the most part, manufacturing firms in Canada enjoy at best average performance when compared to other sectors in Canada or manufacturing in other countries. But spending on training and development has also been consistently below average.

Last year, manufacturers spent an average of $677 per employee. There are huge opportunities for improvement there if they want to be more competitive, she said. The important thing for Canadian companies is that they will have to increase training and development eventually and it is better to do so before they are hurt by poor performance, she said.

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