With Viet Vu, Manager of Economic Research, Brookfield Institute for Innovation & Entrepreneurship
For the past decade, the business world has been concerned about The Talent Gap. The idea underpinning this phenomenon is that there’s a skills mismatch between the supply and demand of labour. While this may sound theoretical, it has a tangible impact on the day-to-day operations of businesses across nearly every industry. Because of the rapid evolution of technology and generational trends, the labour market in Canada had already tightened prior to the pandemic with the growth of job openings far exceeding the pool of applicants.
Since 2015, The Brookfield Institute for Innovation + Entrepreneurship (BII+E) has taken a multi-disciplinary approach to studying the labour market and the effect of technological change, utilizing the perspective of economists, researchers, policy professionals, communicators and program managers. In 2018, BII+E published Understanding the Talent Gap: Lessons + Opportunities for Canada, a discussion paper that looks at the issue holistically.
Viet Vu is the Manager of Economic Research at BII+E, studying how governments and companies can intentionally design policies and markets to drive human behaviour.
“The labour market is still extremely tight in Canada, despite some worrying short-term economic outlook and recent changes in the interest rate,” said Viet. “However, we are likely expecting a modest slowdown of the labour market in the coming months.”
Mind the Gap
When people discuss The Talent Gap, the retirement of Baby Boomers (those born between 1946 and 1965) is often cited as a significant contributor. The oldest Baby Boomers turned 65 in 2011 and the youngest hit that milestone this year, however many have chosen to delay their retirement. According to a report from Statistics Canada earlier this year, “never before has the number of people nearing retirement been so high.” But this transition is already underway, and the market is adjusting.
“The retirement of older generation workers has already had an impact on the Canadian labour market, but the effect of such declines has been mitigated somewhat by immigration policies pursued by the federal government in the past two decades,” said Viet.
“The introduction of technological tools that allow for productivity increases is also crucial in ensuring that an aging workforce does not impact the wider economy.”
Although technology is not a cure for The Talent Gap—on the contrary, it’s one of the biggest contributors. The pace of technological evolution is accelerating exponentially, now outpacing the ability of education and training to keep up. Continued education and regular reskilling will be a regular feature of more jobs as change disrupts previously stable jobs.
The pandemic also led many people to re-evaluate and change their careers, in what is now commonly called The Great Resignation. Layering all these issues atop one another has created a problem that will require more than one solution.
Where to Find Talent
When you can’t find your keys, the best place to look is everywhere you haven’t already looked. And yet we look in the same obvious places multiple times as if the keys will be there this time. For businesses struggling to find people, the best place to look is everywhere they haven’t already looked.
When searching for new talent, employers often rely on referral networks but this is a limited pool that a company will likely share with its competitors. However, job seekers more often rely upon online job ads to find opportunities. This disconnect between the behaviour of employers and job seekers creates a lot of potential missed connections, especially since those job seekers are looking online often because they lack a personal connection, regardless of their skills. It’s more time-consuming than hiring from referrals and it may not be revolutionary but sifting through stacks of applicants from online job ads is a straightforward way to find talent that’s otherwise gone unnoticed.
“Fund, sponsor, and support associations that specifically focus on underrepresented groups within your industry—whether that be women, gender and sexually diverse individuals, indigenous and racialized professionals—these associations are filled with fabulous talent that might have been overlooked by others.”
Co-op programs are an excellent source of young talent and it provides employers a try-before-you-buy opportunity. Similarly targeted, rapid training programs can serve as fertile ground for recruitment.
What to Look For
Employers need to reconsider what kind of skills and backgrounds they’re looking for. Go beyond the old model of does this person check these boxes for education and experience and evaluates the traits of applicants. Rather than hiring for today’s opening, hiring the right person might mean preventing tomorrow’s opening.
“Especially for early career positions, the ability to learn and learn quickly is underrated. Even those who seemingly don’t have every single technical skill that an employer is looking for will close that skill gap quickly once on the job, as long as they are able to learn.”
Employers should be looking for a growth mindset—is this person adaptable? Do they have a proven track record of self-teaching new skills and tools? In addition to being able to move alongside a company as it pivots, these qualities demonstrate intelligence and initiative. The increasingly technological job market has also increased the value of digital literacy and related skills.
“In terms of technical skills, an increasingly important skill to look for is the ability to understand and make sense of data. Such skill isn’t simply about numeracy, but the ability to make sense of how data was generated, and how that data can (or can’t) be used.”
What to Offer
The tight labour market makes it easier for workers to peek over the fence to see if the grass is greener. Whether attracting new employees or keeping the ones they already have, employers should also reconsider what they are offering to them.
“Young people especially have felt the destabilizing impact of the pandemic, and many want a form of stability, but also a sense of flexibility within that. For example, being able to work in a hybrid work environment will be important. In addition to more traditional factors that attract someone to a job, another important factor for many young people, is the commitment a company has for equity, diversity, and inclusion principles not just in hiring but in all business decisions.”
“It’s important to provide clear and consistent growth opportunities within the company, as well as fostering a sense of ownership where they can impact business decisions. However, one must not lose sight that pay, and the ability of a business to offer a competitive salary is still amongst the most important factor.”
Hiring for a growth mindset means that employers will in turn have to offer opportunities for growth. Retraining current employees is often cheaper and easier than hiring and it can be used as a reward for performance.
“For skills that can only be developed externally, it’s important to set a specific development budget that an employee can access to cover training costs. For skills that can be developed internally, mentorship or job shadow still work incredibly well. The in-office days (of a hybrid work week) also provide important passive learning for junior talent as they observe more senior talent do their job.”
Mentorship is one of the only ways long-held institutional knowledge gets passed from one generation to another. In addition to skills, this can include knowledge of the business’ culture, which can be equally important to protect.