Skill requirements for entry-level employees and future leaders are changing rapidly, new report finds

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Date: March 1, 2016

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New technologies, disruptive innovation and global competition for talent are raising skill requirements and changing expectations for entry-level employees and future leaders, according to a new report from Aon Hewitt.

The study, Developing Canada’s Future Workforce: A Survey of Large Private-Sector Employers, is based on a survey of 90 leading Canadian companies. It found that large companies are putting a priority on recruiting and developing employees who can adapt to changing workplace and industry circumstances.

Aon Hewitt conducted the survey in partnership with the Business Council of Canada, as part of the Council’s National Conversation on Workplace Learning and Development. The participants include major banks and other financial services providers, retailers, manufacturers, telecommunications providers, energy producers, mining companies, food processors, transportation firms and real estate developers.

While respondents generally reported that post-secondary graduates are adequately prepared for the workforce, they noted that the ability to carry out basic functions is no longer enough for most entry-level jobs. Young workers are expected to take on more responsibility earlier in their careers.

“Businesses today navigate an increasingly complex environment, with pressure coming from both global competitors and disruptive technologies,” said The Honourable John Manley, President and Chief Executive Officer of the Business Council. “Although technical competency is needed to get the job done, companies are increasingly looking for young employees who can absorb information quickly, work in teams and solve complex problems.”

Survey participants said they are particularly interested in hiring young people with a strong complement of soft skills, such as collaboration and teamwork skills, communication skills and critical thinking skills. They are also seeking employees who have participated in co-op programs and other work-integrated learning experiences, and people who have strengths or expertise in a variety of fields.

The study suggests that large companies are facing significant challenges finding qualified leaders and highly specialized talent.

Roughly half of the employers in the study said that leadership and management positions are the most difficult to fill. Companies also highlighted shortages in the skilled trades, information technology, business intelligence (“big data analytics”), engineering and cyber-security/risk management.

Ninety-three per cent of respondents said that difficulties in recruiting people with the right mix of skills will impact their companies’ planned investments. Over half said they expect the impact will be “moderate to significant.”

In many organizations, leadership expectations have changed dramatically over the last decade. In addition to being able to manage effectively on a day-to-day basis, leaders – from senior executives to managers – are expected to bring forward new and creative ideas, think strategically and globally, optimize operations and motivate employees.

More than half of respondents indicated that leadership development programs, both within and outside their companies, are not keeping up with these evolving requirements. This is a challenge facing large companies around the world, according to Aon Hewitt. Problems arise when good performers with strong technical skills are promoted into leadership positions without well-developed soft skills.

“A key differentiator between top-performing companies and the rest is the ability to actively grow leadership capabilities at all levels within the organization,” said Neil Crawford, Partner and Canada Talent Practice Director, Aon Hewitt. “The fact that the companies that participated in the survey recognize this need is encouraging, but the hard part is successfully building a solid internal program to identify, assess, develop and engage future leaders.”

Additional findings from the report include:

  1. When recruiting for entry-level positions, most large companies expect candidates to have either no relevant experience or less than a year of experience. Participation in a co-op or similar work-integrated learning program is often considered sufficient;
  2. Collaboration between post-secondary institutions and large companies is reasonably healthy, although more is needed;
  3. Large companies are investing more in workforce learning and development, and in many cases this includes the use of new training methods;
  4. Most respondents believe their companies are well-prepared to handle anticipated demographic shifts, in particular the coming wave of retirements among baby boomers.

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