Investing in a resilient Canadian workforce

Executive Summary

Accelerating technological change, volatile trade environments, the gig economy, and massive demographic shifts are just a few of the new circumstances facing Canadian employers.

Building a resilient workforce – one with the right mix of skills to respond to the technical and creative demands of the next decade – requires continued investment and adaptation by Canadian businesses, along with strong partnerships with government and post-secondary institutions.

Based on a survey of 86 leading Canadian organizations in the summer of 2019 and prior to the outbreak of COVID-19, Investing in a Resilient Canadian Workforce: Business Council of Canada Skills Survey 2020 explores the Canadian talent market through the eyes of human resources executives at some of Canada’s biggest firms. This report is not meant to be a definitive look at Canada’s changing labour market. It is an exploration of how these employers are responding to rampant change and preparing to respond to the uncertainty of future labour market trends.

Major takeaways for 2020 include:

The new talent reality: Workforce growth and competitive recruitment

The surveyed employers are optimistic about workforce growth in the next three years. That said, they worry about a coming shortage of technical skills, particularly around artificial intelligence and cybersecurity. They also note a gap in human skills, such as collaboration and problem solving among younger workers.

As in 2018, finding the right people is difficult, but many of these firms have learned to mitigate the impact of scarce talent by re-skilling existing workers, outsourcing key tasks, and using contractors to fill gaps.

Aligning expectations and skills: Employers and employees want more

Employers are expecting more from new graduates, with 75 per cent saying their expectations are higher than five years ago. Expectations focus on productivity, resilience, technical and human skills. Candidates, too, have increasing expectations, but their focus is primarily around work-life balance, flexibility, empowerment, and meaningful work.

The misalignment around skills is significant. Canada’s post-secondary system is doing a good job of keeping pace with respondents’ demands for technical skills, but human skills are not meeting expectations.

Collaboration, teamwork, and relationship building top the wish list for both mid-level and entry-level hiring. And for entry-level employees, there is an expectation that they can also bring strong abilities in communication, problem solving, and resiliency to the workplace. Yet 62 per cent of respondents report that they see no improvement in graduates’ human skills in the past five years. Simultaneously, new grads are asking for more from their employers. Respondents identified increasing expectations from new hires for opportunities to advance, meaningful work, increased guidance, and improved work-life balance.

Impact of technological and demographic change: Parallel shifts lead to uncertainty

Employers are uncertain about how many (and which) jobs will be impacted by technological change. About half of the respondents predict only minimal changes to the overall size of the workforce as a result of automation, though its impact varies both by sector and by firm, with some businesses embracing change more quickly than others.

The majority of respondents plan to reskill and upskill rather than replace workers and are taking a wait-and-see approach in their long-term planning for technology changes.

The organizations are, however, confident in their ability to manage the retirement of baby boomers, with 70 per cent saying they don’t
anticipate any problems replacing them.

Investing in a resilient workforce: New ways to learn, new investments in training 

The employers surveyed continue to invest in training their employees, with 71 per cent expecting to increase this spending in the next three years. The majority of firms have an up-skilling and re-skilling strategy in place, though there is an opportunity to make these plans more formal and holistic. 

Along with increased investment in training, these organizations are looking for new, more efficient and effective ways to build skills, including digital badges and mobile apps. 

The importance of post-secondary education partnerships: Strengthening and diversifying relationships is key 

Respondents are interested in stronger relationships with colleges and universities, both to improve talent pools and to understand and prepare for the future needs of the workplace. Eighty-six per cent have a relationship with one or more institutions, and a strong interest in improving alignment and processes with these institutions to keep pace with changing skill needs. 

Partnerships to develop co-op and internship programs are paying off to produce better prepared graduates with real world experience. However, keeping talent pipelines full will require new approaches, including recruiting graduates outside of Canada and closely assessing which schools and which programs are producing the right candidates. 

Despite considerable uncertainty resulting from the increasing pace of change, the employers in this survey are optimistic about the opportunity to invest in developing a resilient workforce that will support Canada’s global competitiveness and economic growth for many years to come. 

Introduction 

“The more we’re able to partner to address the coming skills shifts and shortages, the better. It’s clear that fierce competition for hot skills will make it difficult for each company to find enough skilled talent on the street.” 

Toward workforce resiliency 

Canada’s largest employers are caught between the immediate need for a workforce that shows up with today’s required skills, and the certainty that in a not-too-distant future, these skills may fall short of what is required. The growing need for organizations to recruit talent with the agility and resilience this decade will demand is a top priority of Canada’s largest employers. 

Welcome to the fourth iteration of the biennial survey by the Business Council of Canada. Previous reports released in 2014, 2016, and 2018 have: 

• Informed public policy; 
• Supported the development of programs to help young Canadians transition from school to work; 
• Examined the role of automation and artificial intelligence in the future Canadian workforce; and 
• Facilitated critical discussions on health, diversity, skills, and talent requirements for Canada’s workforce. 

Beyond this, the survey data contributed to the formation of the Business + Higher Education Roundtable (BHER) by the Business Council of Canada in 2015. BHER is a not-for-profit organization that harnesses the strengths of some of Canada’s top businesses, universities, and colleges to deepen collaboration between schools and employers while improving opportunities for Canadians. 

The 2020 Skills Survey is grouped under five themes, each offering insight into the major trends facing Canadian employers: 

• An increasingly competitive talent market 
• What graduates and employers expect from one another 
• The impact of technology and an aging workforce 
• Investing in a resilient, agile, skilled workforce 
• How employers benefit from partnerships with post-secondary education

Economic conditions 

This survey was conducted over the summer of 2019, during which time Canada experienced continued economic growth, with generally low unemployment¹. However, ongoing uncertainty about Canada’s trading relationships, and low energy prices created pressure on employment and growth, particularly in Alberta. Alberta’s labour force failed to gain momentum in 2019, with growth slowing to 0.5%, down from 1.9% in 2018². The province’s unemployment rate remained high, averaging 6.9% in 2019. 

The Canadian economy grew by a modest 1.6 per cent in 2019³. Growth softened at the end of the year and is expected to remain restrained due to ongoing domestic and global challenges that are affecting business investment and exports. 

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1. Statistics Canada (2019, October 11). Labour Force Survey 2019. 
2. Alberta Treasury Board and Finance (2020, January). Labour Market Notes January 2020. 
3. Bank of Canada (2020). Monetary Policy Report January 2020.