Strengthen your skilled talent

Compared to firms that only focus on the Canadian market, the average exporting company makes 121% more revenue, grows faster, lasts longer, and is more productive and innovative.

When it comes to competing on the global stage, firms need the right people in place to help them plan, implement and execute growth plans. But Canada has a shortage of skilled talent. We’ll look at what’s behind the talent crunch and give you practical solutions to implement a talent management program as part of your overall international business growth strategy.

In 2017, EDC surveyed the leaders of more than 600 companies that sell outside of Canada. We wanted to know what makes a company successful when selling internationally.

Overwhelmingly, access to skilled talent came out as a top competitive advantage:

In January 2018, Statistics Canada announced the lowest jobless rate, at 5.7 per cent, since it first started tracking employment levels 40 years ago. Job vacancies increased 44,000 between July and November 2017. A report by the Canadian Federation of Independent Business released in March cited a labour shortage of “399,000 jobs left unfilled for at least four months because employers have not found suitable candidates.”¹ The number marked a 0.6 increase in job vacancies over the previous December, to 3 per cent, the highest level seen since before the 2008 recession.

Canada is not alone in facing a talent crunch. Countries across the Group of Seven (G7) are all trying to cope with record-level unemployment, in the wake of years of job creation agendas. In March 2018 leaders from G7 countries met in Montreal to come to a consensus on how to manage the current and impending global talent crisis.

EDC’s own research finds firms are feeling the talent crunch. Canadian business leaders see the skilled worker shortage as a hindrance to international expansion and competition:

• 45% of firms say lack of access to skilled talent is a significant challenge to growing their businesses outside of Canada. This is the number one non-financial challenge to growth, according to Canadian companies we surveyed.
• Nearly one-quarter (24%) say lack of skilled talent or resources is a key challenge to sustaining or growing business outside of Canada.

1.4.1 Demographics – an aging population means a smaller, younger workforce

Canada, like many developed countries, now has fewer people of working-age than it does dependants. That means children and retired people outnumber those working. Baby Boomers have been retiring in droves. The Conference Board of Canada has found that for every 1.5 retirees, there is only one available worker to replace them.³

The workforce is also less experienced. Since 2014, young workers have outnumbered mid-career and experienced professionals. Millennials, those born between 1980 and 2000, now represent around 40% of the Canadian workforce. They officially outnumber Generation Xers and Baby Boomers, respectively. The comparably smaller pool of mid-career professionals means there are fewer people in the pipeline to develop into senior leadership and executive roles.

1.4.2 The digital workplace – There’s a mismatch between skills needed and those in demand

It’s not simply that there aren’t enough people to fill jobs. Much of the talent shortage in Canada is due to skills mismatch. Rapid advancements in digital technology require people with highly specialized information technology (IT) skills on the one hand. But they also require cross-functional leaders and employees who can leverage the technology to adapt quickly, communicate, identify opportunities and work with others to solve complex problems.

Technology has dramatically changed the way we work across all industries. It has become integrated into nearly everything we do. This has created a demand for highly-trained IT professionals to develop increasingly sophisticated “first-to-market” technology. There is also a demand for people with specialized skills to manage the technology and mitigate risks that come from using it.

But all employees, regardless of function, must have the aptitude to apply workplace technology in useful ways – to communicate, collaborate and continually innovate. As artificial intelligence automates more routine workplace occurrences, the lines between traditional job functions have blurred. Companies rely on employees to take on more complex tasks and projects, make decisions and interact effectively, even as the technology and their work environments are frequently changing. The skills required to work in the digital workplace requires employees and visionary leaders who can set a course of action, communicate it, troubleshoot, manage risk, adjust quickly to change and work at a fast pace in a global environment.

Consider some of the ways digitization has radically altered the workplace:

• Information technology (IT) has changed how and where people develop and sell products and services.
• Our reliance on data and the internet to conduct business has heightened IT risk. Employees must use technology properly and securely and keep it working for a business’s core operations to run smoothly.
• Digitization allows us to communicate faster, triggering the need for continual innovation. There is a need for near simultaneous ideation-to-market processes to remain competitive. People need to be creative, adaptive and mobile.
• Digitization has removed workplaces’ traditional hierarchical structure. Employees are more autonomous. They want more say in what goes on and how they do their jobs.
• There is a need for continuous learning within workplaces. Employers struggle to find graduates with skill sets that match the ever-changing skills required to function in their jobs.
• As more routine tasks become automated, employers require people with foundational skills – literacy, numeracy and problem-solving – that will make them adaptable project and people managers.

1.4.3 The global workforce – Canada now competes for talent with companies from all over the world

Canadian companies also find themselves competing for skilled talent on a global scale, regardless of where they sell their goods and services. For one, technology has opened up new possibilities for telecommuting from anywhere with internet access. The workforce is also becoming more mobile. Free trade agreements, like the North American Free Trade Agreement (NAFTA), Canada’s trade agreement with Europe and the latest trade deal with Pacific Rim countries, allow for more movement of workers across borders. An estimated 8 per cent of people now seek jobs outside of their home country.

Talent recruitment is also going global

Talent recruitment, done right, is now borderless. Competitive companies trawl the world for the best talent. Canada has been on the upstream side of talent migration for a number of decades. But Canadian businesses are now also experiencing an outmigration of talent, as skilled Canadians look beyond borders to find the best employer match. This can come as a shock to Canadian companies still working solely in the domestic market, as they may find their top talent leaving them to work for a company in the U.S., Europe or Asia. Many people don’t even have to relocate to do their jobs.

The upside is that Canadian companies also have access to a global workforce that opens the door to an unprecedented pool of skilled human resources. Savvy companies take advantage of outsourcing specialized job functions to people in other countries when they can’t find the skilled talent at home. Many competitive international firms invest in other countries, in order to set up new offices and take advantage of local talent pools.

The global race for talent

• By 2020, Europe will need to fill around 825,000 Information and Communication Technology (ICT) positions, and the U.S. will have openings for more than 1.4 million specialized computer roles⁴
• 35% of Millennials, who now dominate the global workforce, don’t have any work-related computer skills⁵
• 38% of employers worldwide are struggling to fill open positions⁶

Emerging economies, meanwhile, are leveraging technology to enhance their competitiveness in the global economy. These countries with large populations are holding onto their homegrown talent. In China, for example, just 1% of ICT roles are currently unfilled.⁷