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The Matching Game
SO WHAT IF THERE’S A LABOUR SHORTAGE? We have lots of unemployed and under-employed people in Nova Scotia, so if there are plenty of jobs and less competition for them, that’s a good thing right? It might be if we didn’t also have a decreasing and aging population, a growing gap between the costs of social services and what we can afford to pay, and an increasing mismatch between the skills our unemployed currently possess and the skills the new economy will need. We need to learn how to play the matching game now before we fall too far behind to ever catch up.
There’s no denying it. The demo- graphic bulge that is the baby boom generation is moving steadfastly up the population pyramid and, as they get older, they’re changing our culture and our economy. Not just here, of course, but all over North America and Europe, communities are looking at having to care for older and older populations.
The problem is exacerbated here in Nova Scotia due to our low birthrate, high out-migration of youth, low immigration and even lower retention of immigrants. Where its effects will be felt most keenly, at least by the Halifax business community, is in a shortage of workers.
Well, fine. At least we won’t have to worry about the same old problems again, right? Unemployment, for instance. Surely with fewer working-aged folks around there will be jobs enough for all, right? Not exactly.
“The very simple question that anybody would ask when you’re talking incessantly about a labour shortage is how can you have unemployment?” says Brian Rose, vice president of Marketing with the Halifax Chamber of Commerce. “It’s because we have what’s called natural unemployment. There’s always a population in transition, going from one job to another,” Rose explains.
And in addition to natural unemployment due to timing of transitions, there’s also some due to the mismatching of skills. As technologies progress, some workers can get left behind. If they don’t have the right skills, they may find themselves unemployed, even in a market with open positions to fill.
So how do we deal with this mismatch between our skill supply and the demand for skills? How can workers, businesses, educators and public policy makers minimize the mismatch? It’s a matter of staying on top of the changes in your workplace and your economy. At best, we can predict these changes and stay ahead of them. At worst, we can’t waste time trying to catch up.
To get through this demographic shift and its ensuing problems relatively unscathed, we’ll need to focus on industries that use higher-value skilled labour, our workers will need to make sure they are getting trained in the right higher-value professions and our employers will need to take a bigger role in training and education of workers. And overall, our workers and employers will need to understand and embrace the concept of lifelong learning. Not the warm, fuzzy, quality-of life sense of lifelong learning, but the cold, hard, keep-up-with-the-times sense of lifelong learning that’s being demanded by our new technology-driven economy.
“The matching game is a problem that isn’t widely recognized yet, much like the demographic problem. Everybody sees the symptoms, but nobody’s assigned it to a major cause. It’s just ‘Alberta’, or it’s ‘I’m in the wrong neighbourhood’, or ‘people don’t want to work here.’ That’s not the case,” Rose says.
“There’s no question that statistically there’s a gap,” says Ian Thompson, deputy minister of Economic and Rural Development for Nova Scotia. “There are jobs that are unfilled in Nova Scotia and obviously there are Nova Scotians that are unemployed, so the match is imperfect.”
And the match may just get worse before it gets better. One of the big dangers of the impending labour crisis, Thompson says, is that less workers also means less revenue for the government in the form of income taxes and that means it’s harder to pay for services like education and health care. So in a time when an ageing population will be placing more demands on the health care system, there could also be less money to fund it.
“It’s a revenue problem,” Thompson says. “Based on what we know now, to maintain our level of services, people in the workforce are going to have to be paying higher taxes because they’re in a higher tax bracket, doing higher value work. That’s our long term challenge – to make sure that as we create new jobs, we are attracting the sort of investment that will lead to more Nova Scotians having employment at higher income levels, ultimately generating more money for public services.”
With the need for higher income levels comes the need for developing industries with higher-value labour, such as aerospace, biotechnology and renewable energies. More than ever before, our economic development needs to embrace competition, innovation and international markets.
“We need to internationalize our thinking,” Thompson says, about everything from how we recruit talent to how we promote innovation. “If the best idea or innovation comes from Mumbai, we’d better go and get it. We’d better know what’s happening there and take advantage of what’s available to us internationally.”
And Thompson stresses another area to expand our horizons: where to sell Nova Scotia products.
“We need to think differently about where our opportunities lie,” Thompson says. “Think less about selling to Etobicoke and more about selling to wherever the market is for the particular product you’ve developed.”
Thompson points to a handful of Nova Scotia companies that have invested in research and development and entered the fray of international competition.
“Each of them has developed new products that the market in Nova Scotia will never be large enough for them to get a return on their investment or be profitable. They understand they need to sell around the world or find niches elsewhere.”
Acadian Seaplants sells to more than 70 countries from its head office in Dartmouth. In fact, about 98 per cent of the products produced at Acadian’s five plants province-wide are exported around the world. From its research centre in Cornwallis, this agri-tech success story has developed specialty products designed for niche markets, such as gourmet salad seaweeds for Japanese consumers, clarifying agents for breweries and kelp meal for agricultural uses.
LED Roadway Lighting has invested in developing LED street lights that literally outshine conventional lights and save well over 50 per cent on energy costs. The lights, produced in Amherst, are now on streets from Annapolis Royal to San Francisco and LED Roadway is continuing down its R&D path by looking into using solar energy to make their lights even more efficient.
“We’re a small province in a small country from a market perspective,” Thompson says. “So for us to prosper in the years ahead, we have to find ways to sell goods and services in global markets and sell them profitably.”
More higher value R&D-based industries in Nova Scotia means a greater demand for such skilled workers as engineers, scientists and technicians. And that’s where the matchmaking just begin.
“When you think about reaching outside Nova Scotia for your markets,” Thompson says, “by definition you’re subjecting yourself to more competition, and by definition you’re going to have to improve your performance. Which means your technology is going to have to be good and your talent is going to have to be well trained, motivated and inspired. It’s a virtuous circle.”
So we know we want the kind of growth that brings higher-skilled, higher-paid jobs, but what sectors are we realistically looking at developing in Nova Scotia in the next few decades?
Health care is a field growing in synch with the baby boomer generation. While already in pressing need of workers, the provincial government is predicting about 7,000 health care openings in the next few years. In 2009, we had 4,123 students enrolled in health professions and occupations in Nova Scotia universities and 2,353 enrolled in the health and human services at the Nova Scotia Community College (NSCC). All six NSCC campuses offering Practical Nursing in the fall of 2010 already have full program enrolments and waiting lists.
“There’s been very significant growth in our school of Health and Human Services,” says Michelle Lane, vice president of advancement for NSCC. But what excites Lane about NSCC’s curriculum these days is a new field of study that’s emerging in response to industry demand.
“There’s no question the major growth sector we’re responding to right now is the renewable energy sector,” Lane says. “It’s absolutely what is on the horizon, including jobs that neither we nor industry know details about because the industry is evolving in such a vibrant way. But immediately we’re focused on producing people with the advanced skills needed to design, install and maintain renewable energy systems – whether that’s in the consumer market or the industrial market.”
In response to consultations with companies and based on their own research, NSCC added a new program to its roster in March 2008: the Energy Sustainability Engineering Technology (ESET) program, focusing on the renewable energy sector and its emerging needs. This spring the first ESET graduates will set about finding jobs. Lane expects them to be absorbed pretty quickly into the job market.
“Industry told us almost without exception, ‘We need those people now’,” Lane says. She also expects some of these graduates will go on to become entrepreneurs and innovators in renewable energy.“We do expect some of the graduates will go on to create entire new industries that don’t exist now.
“Right now wind power is becoming increasingly accessible, but how do you connect to an existing infrastructure and make it work? Those are questions that young professionals are needed to answer, to support industry and consumers as they want to integrate emerging technologies in their facilities.
“If you look at jobs in Canada,” Lane says, “there are 530,000 environmental jobs in the country. The growth in that sector is expected to be around 8.8 per cent in the next five years and that’s 24 per cent faster than any other sector. And it translates across so many different sectors in industry – government, mining, oil and gas, waste management, remediation. It’s a facet of our economy that crosses over the existing sectors as well as driving growth in its own right.”
Another less green, but equally high-tech emerging industry in Nova Scotia is aerospace.
“Through good luck or good management we’ve got a terrific emerging aerospace sector,” Thompson says. “The government of Canada is going to spend $30 to $40 billion over the next couple of decades on aerospace and defense.”
Thompson is hoping that Nova Scotia can treat those billions as seed money to grow an industry.
“This is a terrific opportunity for us. Both aerospace and shipbuilding produce high value-added, talent intensive and capital-intensive products. So as we do our work to meet the needs of the government of Canada, we’re acquiring resources we can sell elsewhere.
“We have many companies in Nova Scotia that are on a growth trajectory,” Thompson says, and that means increased demand for skilled labour. “We’re talking 10,000 plus jobs in companies that have come to Nova Scotia. Through the payroll rebate program administered through Nova Scotia Business Inc., they have committed to employment levels in future years that amount to more than 10,000 jobs.”
With a shrinking population and labour force, the challenge will be to make sure we have people to fill those jobs.
“Do all those people exist in the province today?” Thompson asks. “No. But are we running hard and are these companies running hard to get these people in place? Yes.”
The demand for skills in the emerging economy won’t just be about engineers and researchers. About 20 per cent of adults in Nova Scotia don’t have a high school diploma and that’s a major roadblock to their being able to take advantage of the job boom.
“We’re at a stage in our economy where a high school diploma is really the minimum point of entry,” Lane says. “Employers want that and specific skills and capabilities.”
NSCC’s School of Access had more than 1,700 students enrolled as of September 2009, either pursuing a high school diploma or upgrading and filling in gaps so they can move on to college or university.
“It’s an incredibly powerful dimension of our work,” Lane says, “because we have many Nova Scotians who don’t yet have the qualifications needed for employment. We’re continually creating opportunities for all Nova Scotians, including those who aren’t currently fully qualified for those emerging jobs and those enormous vacancies and retirements that are literally just around the corner for us.”
A major part of the skills matching problem has to do with the fast pace of technological change and the way the education system has grown to match it. Where our postsecondary schools used to be able to produce generalists that could go out into the workforce and become specialized, we now expect a high degree of specialization right at the entry level in many positions.
The bulk of computer programmers of the 60s and 70s didn’t go to CompuCollege or even take computer science degrees. For the most part, they learned right on the job. These days, that level of workplace training is almost unheard of. Universities and colleges have become multiplexes of specialty schools, trying desperately to keep ahead of the technological curve ball and make sure their graduates have the right specialty skills to enter the workforce.
But a major labour shortage will impact this pattern. As skilled workers get scarcer, the pressure will not only be on the education system to train new workers, but also on employers themselves.
“Employers have backed off training on to government,” Rose says. “They’ve said, ‘What we want is the perfect person to come popping out of your institution and either you, the student, or you, the government, has to pay for that, because I don’t want to take on any of the training responsibilities.’”
But that formula won’t work in the long run, Rose says, especially in the coming labour crunch.
“Successful companies don’t do that. They’re the ones who say, ‘Hey, you’ve got a degree. You’re a pretty smart guy. Why don’t I give you the rounding out you need to be a good employee?’”
Thompson agrees. “You hire the best talent you can get at the time you need it, but it’s unwise to think that’s the end of the journey. The world moves so fast, the marketplace evolves so quickly, and there’s so much international competition that the smart companies are those that are investing in their people to make sure they’re as capable as they can be at this particular moment.”
And more and more there are programs to help make that philosophical shift from expecting tailor-made entry-level workers to walk in your door, to participating in some of the tailoring yourself. Rose is a huge fan of the Nova Scotia Department of Labour’s efforts in this area.
“It’s creatively called the Workplace Education Program,” he jokes. “They really need a good marketing agency over there.”
But boring names aside, Rose likes what the Workplace Education Program has done for companies such as Pete’s Frootique and even the Halifax Chamber of Commerce.
“They come in and assess your needs and then design a training program for workers, often to be delivered right in the workplace. It’s great for small business, since they’re probably the ones with the greatest matching problem, because they have less access to the tools that diagnose their needs,” Rose says.
“What I hope is that it’s like a little vitamin shot that makes companies say, ‘Hey, that worked!Let’s start building in training for workers all the time.’ The last answer I want to hear about how we fix this problem is that government should do something,” Rose says. “Well, yeah, government should do something, but so should we. As an employer, you’re going to have to take what you can get and train people to be experts in what you need.”
The Nova Scotia Community College has also embraced the workplace training model.
“We have an entire facet of our work which is about customized training,” Lane says. “It’s about tracking a particular employer’s needs, or an entire sector’s needs, and designing a program for that very specific application.”
On a somewhat larger scale than the Workplace Education Program, NSCC customized training means that whole industries can mobilize new training models much faster than in the past.
“They understand the matching game,” Rose says. “They’re saying everyone’s going to need some tweaking, some improving along the road. But productivity is the key to increasing our wealth when we have a declining population. That means we need to train our people better and keep them trained.”
“If there’s a bottom line,” Rose says, “the matching game means employers and employees need to be flexible, and they need to be thinking forward. Continuing education becomes a way of life for both sides.”
Continuing education and workplace training, embracing competition and innovation, staying flexible and being ready to adapt to new technologies. That seems to be the recipe that everyone agrees will help us over the hump of the coming demographic shift.
“The world is moving pretty quickly,” Thompson says. “We need highly skilled, adaptable people, because the workplace is changing. Success is going to go to those who can respond quickest and with the greatest ability. We do ourselves no favour if we get on to single track thinking about where an opportunity lies and if we conclude that’s a long-term, static situation.”
“You can’t rest on your laurels,” Rose says. “I can’t think, ‘I’m a happy vice president at the Chamber of Commerce with a background in marketing.’ I should start thinking ahead. We’re going to be doing our marketing a lot differently than in the past, so I’d better learn something about social marketing. And my employer should be thinking, ‘I need to keep this guy, so I should make sure he knows what we both agree he should know, so I don’t have to go looking for another person.’”
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