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Developing Skills: Where Are Canada’s Employers?

Mar 20, 2014
Daniel Munro

Principal Research Associate
Centre for Skills and Post-Secondary Education

Discussions about how to address skills gaps and mismatches in Canada tend to focus more on the roles and choices of students and post-secondary education (PSE) institutions than they do on the role and behaviour of Canada’s employers. Many employers and commentators expect universities and colleges to produce work-ready graduates, and they criticize students for choosing majors that do not perfectly align with labour market needs. This way of thinking underemphasizes the responsibility that employers themselves have in training a skilled workforce.

To be sure, the efforts of students and PSE institutions are central to developing the skills that contribute to economic, social, and individual well-being, and there are opportunities for improvement. But the employer role is also essential. In 2003, more than a quarter of adult Canadians reported that they had training needs that went unmet. A decade later, many employers are still not heeding the message that they need to do more.

Training Participation Rates are Mediocre

Despite evidence that shows that learning and training lead to “concrete improvements in business performance and productivity,”1 Canada’s record on employer-sponsored training is weak. In 2009, 31 per cent of adult Canadians aged 25–64 participated in some form of non-formal job-related education. This is slightly higher than the OECD average (28 per cent), but well behind leading European countries, such as Sweden (61 per cent), Norway (47 per cent), and Finland (44 per cent), as well as the United States (33.3 per cent).2

Although more Canadians participated in 2009 (31 per cent) than in 2003 (25 per cent), Canada’s performance relative to international peers has slipped. In 2003, the average participation rate for 13 comparator countries for whom data was available was 23 per cent—a rate that Canada exceeded by 2 percentage points. But by 2009, those same 13 countries had an average participation rate of 33 per cent—a rate that Canada lagged by 2 percentage points.

Few Hours of Instruction

Canadians who participate in non-formal job-related training receive fewer hours of instruction than their peers in leading countries. Canadian adults received 49 hours of job-related non-formal education in 2009 versus the OECD average of 59 hours. This represents less than half the hours received by adults in Denmark (105 hours), and well behind Belgium (86 hours), Finland (74 hours), Austria (69 hours), Norway (69 hours), and Germany (61 hours).

Weak Investment

The low rates and intensity of workplace training for Canadians are not surprising. Surveys of Canadian organizations for the Conference Board’s Learning and Development Outlook show that employer spending on training and development has declined significantly over the past two decades.

  • Spending (in constant dollars) has declined by about 40 per cent, from a peak of $1,207 per employee in 1993 to $705 in 2013. Although the latest results show a $17 increase in spending over 2010, it remains to be seen whether this is an anomaly or employers are, in fact, turning a corner.
  • U.S. employers have also decreased spending on employee learning and development in recent years, which suggests that Canada is not alone in terms of its downward trend. However, as of 2010, U.S. employer spending was still significantly higher ($1,071 per employee) than spending by Canadian employers ($688 per employee).3

Training can be costly and employers face the risk that employees who receive training may be “poached” by other employers, including competing firms. A recent study of ICT firms’ strategies to address skills shortages, for example, showed that although 62 per cent of surveyed firms trained current employees to meet gaps, nearly half (47 per cent)—including some who also trained—hired talent away from competitors.4 It may be that sector-level or government strategies are needed to coordinate solutions to this apparent collective action problem. But if that’s the case, then more employers should be looking and calling for such solutions, rather than trying to shift the training burden to PSE institutions.

Bringing Employers Back In

Employers make up a key part of Canada’s skills development system, but their collective performance in providing training is underwhelming—a reality that contributes to skills challenges and prevents businesses from being more competitive and successful. Even as many sound the alarm about skills shortages and mismatches, not enough are taking steps to address the challenges. Shifting training responsibilities onto students and PSE institutions will not solve their problems. Although many of the challenges they face in providing training are real, employers need to take more responsibility for the training that, ultimately, produces great benefits for them.

1    Canadian Council on Learning, Securing Prosperity Through Canada’s Human Infrastructure: The State of Adult Learning and Workplace Training in Canada (Ottawa: CCL, 2009), 27.

2    OECD, LSO Network Special Data Collection on Adult Learning Activities. Tables C5.1a and C5.2a.

3    C. Lavis, Learning and Development Outlook 2011 (Ottawa: Conference Board. 2011), 15.

4    Nordicity, Labour Supply/Demand Dynamics of Canada’s Information and Communications Technology (ICT) Sector (Toronto: Nordicity, 2012), 22.

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