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Labour Surplus or Shortage: Views from Ontario Monday, August 23, 2010 Marie-Lison Fougère, Assistant Deputy Minister Strategic Policy and Programs Division Ontario Ministry of Training, Colleges and Universities
Overview • Examining labour shortages and Ontario’s situation • Considering the public sector • Ontario Public Service • Strategic focus on skills
The Buzz about Labour Shortages • Ontario’s economy affected quickly and severely by the global economic crisis, with increases in unemployment • Despite the recent recession, labour shortages remain a concern for the future • Several well publicized statements keep them in the public eye "I do think that it won't be long after the recession is over that we're going to start to see the longer-term problem, which is labour shortage in our economy."Prime Minister Harper, CBC Television, The National, January 5, 2010 “The recession gave employers only temporary relief from workforce shortages. Job creation has resumed in recent months, and the looming retirement of baby boomers will only erode the labour supply in the longer term.”Glen Hodgson, Senior Vice-President and Chief Economist, Conference Board of Canada
The Buzz about Labour Shortages • The root of this concern is the demographic reality of the baby boom generation • The leading edge of this generation that has shaped our modern economy has already begun to retire “Beyond 2014, economic growth [in Canada] will be restrained by the exodus of baby boomers from the labour market, a dominant trend that will continue until 2028.”Conference Board of Canada, Canadian Outlook Long-term Economic Forecast: 2010 • The increasing skill demands of the “knowledge economy” compound the problem • HRSDC projects that 70 percent of new jobs in Canada to 2017 are expected to require postsecondary credentials or be in management
Forecasting is an imprecise art • Projections of wide-spread labour shortages sound a dire warning • However, labour markets tend to adjust to alleviate these shortages • Most projections acknowledge this tendency • HRSDC’s periodic 10-year employment and labour market projections, most recently released in 2006 projects, an overall “balance” in terms of labour market needs and labour supply, but notes that shortages may develop in some sectors of the economy for a variety of reasons • “Ontario’s Long-Term Report on the Economy” released by the Ministry of Finance in 2010 cites that increases in worker productivity through higher post-secondary attainment as well as employer capital investments will mitigate the effects of projected slowdown in labour force growth
What is happening in Ontario? • It is generally thought that demographic forces will slow labour market growth in the future • Population growth will be healthy but moderate • Population growth sustained by immigration • Population aging to accelerate • Slower growth of core working-age population • Population growth concentrated in large urban centres
The “Knowledge” Economy University Degree Services-Producing Sector Post Secondary Certificate or Diploma Goods-Producing Sector High School Graduate • Ontario’s economy has seen a growing reliance on workers with postsecondary credentials • Employment has been rising fastest for those with university education, but has also risen steadily for workers with college or trades credentials • Employment among those with only high school has grown modestly over the past two decades • Employment in Ontario is increasingly concentrated within the services-producing industries, a pattern that is consistent with the experience in other advanced industrial economies
The “Knowledge” Economy • Demand for continuous learning and skill development in the workforce • 75% of today’s labour force will still be in 2022 labour force • 3.4 million Ontario adults, including 2.3 million in the workforce, have literacy rates below level required to function in a knowledge-based economy • Demand growing most in high-skilled occupations • 70 percent of new jobs are expected to be in occupations normally requiring postsecondary education or in management
Occupational Demand • Demand varies by occupation (Ontario Job Futures)
Is the public sector more vulnerable? • Challenge to determine whether the public sector as a whole is more vulnerable • Public sector is diverse (e.g. a range of occupations) • Pressure exists in certain occupation groups specific to the public sector • HRSDC’s 10-year Outlook identified persistent shortages in a range of health-related occupations • Ontario’s Job Futures indicates there will be “good” prospects for several health care jobs to 2013, including managers in health care and registered nurses • The public sector has to attract and retain skilled labour in the competitive marketplace • “Good” prospects to 2013 in occupations represented in both private and public sectors, including civil engineers and information systems analysts.
Ontario Public Service (OPS) Labour Market Challenges • Economic uncertainty • Age demographics • In comparison to the overall working population, in the OPS: • Proportionately more workers aged 40 plus • Fewer employees in the 25-29 age category
Labour Market Challenges • Retirements • 20% of all employees will be eligible to retire within the next five years • 29% of senior managers and 26% of middle managers will be eligible to retire in the next five years. • The average retirement age has gradually increased over the last few years • From 57.7 years in 2004/05 to 59.3 years in 2009/10 • On average, when OPS employees retire they are three years younger than the average Ontario retiree of 62.1 years (2007/08) • Not all employees leave the OPS immediately upon becoming eligible for retirement 1. Data in the above table is cumulative (e.g. retired within two years includes retired within six months).
OPS Human Resources Initiatives • Ontario is focussed on making the public service “an employer of first choice”. • Ontario committed to attracting and retaining top notch talent to provide quality services to Ontario citizens • Ontario has been recognized as one of Canada’s Top 100 Employers, one of the GTA’s Top Employers • OPS Talent Management Plan • OPS Human Resources (HR) Plan 2008-11 • OPS Diversity Strategic Plan
Youth and New Professionals • Youth and New Professionals Secretariat • Enterprise-wide approach for attracting, recruiting, and retaining future generations of public servants • Youth and New Professional Programs • Ontario Internship Program • Summer Experience Program • Aboriginal Youth Work Exchange Program • OPS Learn and Work Program for at-risk youth • Internship Program for Internationally Trained Individuals • Post-Secondary Co-operative Education
Workplace Diversity • OPS Diversity Strategic Plan 2009-2011 • Identify and remove recruitment barriers and develop strategies to increase diversity of candidate pools • Diversity mentorship programs • Ministry diversity and accessibility plans • Voluntary OPS employee-driven networks
What to do-Strategic Focus on Skills • Focus on the appropriate mix of workers with skills/training to match the needs of the labour market • Recognizing shifts in educational attainment required for occupations and acting on increasing demand for post-secondary education • Developing the right skills, at the right times, in the right places • Striking the appropriate balance between a broad-based academic foundation and career-oriented education
What should be done? • Make post-secondary education system accessible • The Government’s 70% attainment target linked to long-term labour market needs • Reduce barriers to expand Ontario’s skilled workforce • Employment and labour mobility programs, including for youth, immigrants, aboriginals and people with disabilities, all of who are under-represented in the labour force • Put into place training programs to support lifelong learning • Adult literacy and foundational skills • Retraining and upgrading • Work-place based skills development • Leverage investments from private sector • Ensure right labour market information for policy making and to support informed decision-making by individuals and employers • National, regional, local information • Supply and demand projections • Ensure economic development strategies at provincial and regional levels are explicitly linked to workforce development needs
Key Questions • Focus for policy-makers: • How do we facilitate timely and effective skill development now to meet future demand in the labour force? • Are we doing enough to improve the labour force participation and outcomes for under-represented populations? • How do our jurisdictions remain competitive in the context of more intensive global competition for talent? • Focus for the public sector: • How do we compete to attract and retain talent to meet future demands?