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Pay InvoiceDecember 2009
FILLING THE GAP
A People Strategy for Nova Scotia
Within as little as three years, employers will be scrambling to fill vacant positions and talented employees will be calling the shots
Nova Scotia’s labour landscape is changing drastically. However, this isn’t due to do a sudden economic plunge or an environmental crisis. Our most immediate problem has been a slow train coming, literally 30 years in the making.
Nationwide, Canada is headed for a major labour shortage in the next 10 years. Nova Scotia is particularly susceptible to this crisis due to our having the oldest population in Canada. Although we have traditionally dealt with unemployment and lack of jobs, this fastapproaching problem is set to take its place and, in the labour world, both a boom and a bust can bring with them unique challenges.
“It’s a really weird thing to be talking about during a recession,” says Dr. Jim McNiven, professor of Business Government Relations at Dalhousie University. “But you can do something when it happens or you can try and do something in advance.”
The Halifax Chamber of Commerce, with its year-long, three-phase plan to remedy this crisis, is attempting to “do something in advance.” At Issue: Report on Population Crisis was phase one, designed to stimulate dialogue on the issue, and the Chamber’s People Strategy is phase two, aiming “to engage our members, government and key stakeholders to present potential solutions to these problems.”
Although the problem is less than 10 years away, there are a few solutions that can work together to solve the issue. “We have to get ahead of the game here a bit,” McNiven says. “In the 80s when we had all kinds of people coming into the market, we set up an economy that said retire early, get workers out so we have room for the younger workers and we ignored the Aboriginals, the African Canadians. We did all that and we’re still doing it. The situation isn’t there anymore. In fact, the opposite exists while we’re still pretending it’s the 80s.”
Brian Rose, vice president of Membership of the Halifax Chamber of Commerce, agrees. “People didn’t really recognize the problem and we don’t believe it yet. During the election people were still talking about creating jobs. People complain about the minimum wage being too high when the reality is, you can set the minimum wage at whatever you want, the market is going to force up wages.”
This fact, coupled with the current economic crunch, makes for a tricky situation, but it could be that our focus on the slight economic downturn is distracting us from our much larger problem at hand. “We’re living in a bit of a lull, although not much of one, and people are sure making a big fuss about it,” Rose says. “Because the economy is down globally people have been cutting back and our unemployment rate is going up, but it’s not going up very much.” Since 1971 our fertility rate has been below the replacement rate and holding.
An average of 1.4 children per every fertile woman were born in 2008 and the rate of replacement is 2.1. Nova Scotia’s total fertility rate has been too low for almost 40 years and it’s estimated we’ll start seeing the repercussions in as little as three years. “This is all based on the age of the baby boomer, that won’t change,” Rose says. “They have a median age of 60-65, they haven’t begun to retire yet. But we’re going to be losing millions of people a year because they will.” Rose explains that boomers will be encouraged to stay at work for longer, to accommodate the generation coming after them, the baby bust, a comparatively small cohort.
“There’s a big gap between them and the boomer echo, the children of the boomers,” Rose says. “And in the meantime we’re all sitting around going, ‘who is going to be my plumber?’ We will have to rely on less experienced, less professional labour.”
To solve this problem, we need people. And in Nova Scotia, the people haven’t been born yet. Rose sums it up with a quote from Premier Darrell Dexter: “I don’t see a lot of women giving birth to 19 year olds.”
Part of the solution will be increased participation in the workplace, meaning workers staying at work longer, but in order to convince employees to make that commitment, employers have to learn to give and take.
“A key piece of our success involves engaging employers’ support for the learning, training and growth of their employees,” says Minister of Education, Labour and Workforce Development, Marilyn More. “This may include a workplace education programs; participating in co-op education at the high school, college or university level; making time in the workday for study; supporting a flexible work schedule; or responding to child care issues.”
Rose agrees, adding, “Employers won’t be so spoiled as to have their pick of people; they have to be better to the people they have now. Accept new people, then treat the people they have better. Instead of worrying about minimum wage, they need to be worried about maximum output – how do I keep them happy? It’s a tidal turn; instead of being an employer dominated market, it’s an employee dominated market.”
“They’d like to have 10 people applying for a job so they can go and pick the one they like the best, but what if only one person applies? What if nobody applies?” McNiven asks. “You want to conserve the most precious resource you’ve got, which is people.”
McNiven predicts that stubborn managerial attitudes will be the first casualty in this shift, even beyond those of governmental or multinational corporations. He believes the traditionally managed companies that have never been in the position of needing employees are going to have a hard time coping with the change, as many of our past problems have been related to workforce surplus, due to the baby boomers.
Another viable solution would be to increase immigration, attraction and retention. McNiven points out that this alone can’t solve our issue, simply because we don’t have the social services available to accommodate enough workforce age immigrants.
“You have to have immigration at a rate capable of also accounting for people that aren’t working, for example babies and grandmas,” McNiven says. “For that you’d have to have immigration of about 13,000 people into Nova Scotia per year, every year.”
Nova Scotia received only 2,600 immigrants last year.
“Over a 20 year period you may need to get a quarter to a third of a million people coming in,” McNiven says. “How you set up institutions or facilities to absorb that number of people in Nova Scotia would be very difficult.”
So while we can’t rely on more immigrants a lone to solve this issue, immigration along with increasing productivity and participation rates could work. “Productivity is done through innovation rather than working faster. The key is education,” Rose says.
However, due to an aging population, funding for said education may be pared back due to the lack of taxpaying labourers and an increased drain on other services, such as health care. “We could also solve it by not having any immigrants, but by having everyone work until they are 71 or 72,” McNiven says. “That’s another option. But even if you pump up productivity quite a bit you still wouldn’t be able to solve it. So none of those things in and of themselves is the magic bullet.”
Nova Scotia will certainly feel this pinch more than the rest of Canada due to our aging population, but overall the whole of Canada is in the same boat. Nova Scotia and New Brunswick both hit roughly zero per cent unemployment in about five years and the rest of Canada follows quickly behind. Europe is in the same position.
The Chamber Report on Population Crisis provides these sobering statistics from the European Healthy Aging Advocacy Forum from 2006: “Within the next four years, the number of 55 to 64-year-olds living in Europe will exceed that of 15 to 24-year-olds.”
This is a situation we’re all too familiar with. “Whether its 2015 or 2016 isn’t really important,” McNiven says. “The point is, everyone in Canada is going to hit this at the same time.”
He explains the nationwide demand for Nova Scotian labourers will only intensify. “They’re going to want the same workers we want and they’re going to be wanting ours. So the gap in Ontario in 2030 will probably be equal to the N.S. labour force. Do we close up shop here and move everybody to Ontario? I realize that sounds absurd and I’m not trying to say we should do that, but if you start getting into a competition for labour, this is the kind of stuff we’re going to be dealing with. If we don’t come up with a better solution to keep our economy running, the market will.”
McNiven suggests that Nova Scotia is in a good situation to combat a “youthful brain drain” of trained workers leaving the province due to the number of students that emigrate here. Nova Scotia has 25 per cent more university students than the population would warrant. McNiven predicts more businesses directly “scouting” skilled employees straight from university, much like sports scouts do with talented athletes. “They’re here now,” he says. “We just have to keep them.”
Like McNiven, More envisions a greatly altered workforce and labour landscape in our future. “Over the next five years, close to 90 per cent of positions will require formal credentials. Some occupations will have a hard time attracting young people,” More says. “The structure of the labour market may shift as a result of the changing demographic. The increased number of older people will require more services, such as continuing care assistants, health professionals, councilors and more. Therefore the occupations that may experience the fastest growth may be tied to the changing nature of work and addressing the needs of an older population.”
In addition, McNiven points out that Nova Scotia will see a need to keep people working longer. Right now the retirement age is around 61 or 62. McNiven says it will lilkey shift to 66 or 67. And those people are going to be enticed to stay, which is rather different than the past. The result may well be improved productivity.
“Everyone has spent the last 35 years thinking the purpose of economic development is to create jobs,” Rose says. “That was the measure of success. If you want to win an election, talk about creating jobs, don’t talk about creating productivity or creating genuine progress for the community. “The secret has always been more jobs and that hasn’t gotten us anywhere. We’ve never concentrated on quality of life.”
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