The fact that BC businesses are experiencing significant skills shortages - and that these shortages will reach crisis levels within five to ten years – has been well documented. A report of the BC Chamber of Commerce produced in April 2002 entitled Closing the Skills Gap1 confirmed that small and medium-sized businesses throughout BC were experiencing difficulty in finding skilled workers and that they were concerned about the impact that skills shortages would have on their businesses.

A November 2002 survey on the availability of labour undertaken by the Canadian Federation of Independent Business revealed that over 67 percent of BC businesses were having difficulty hiring people due to a lack of local candidates with the required education, experience or skill set. The report also revealed that close to one third of the affected businesses dealt with the skill shortage issue by functioning with fewer employees and/or ignoring new business opportunities while 54 percent hired someone even though the person didn’t meet their requirements.

The seriousness of the skills shortage situation in BC was further reinforced in a recent study undertaken by the Canadian Manufacturers and Exporters. According to the results of their survey released in December 2003, BC's advanced manufacturing sector is facing a critical shortage of skilled workers. Almost one half of BC's advanced manufacturing employers reported having more than one unfilled position in a skilled occupation, with many employers reporting critical shortages in key areas.2 The impact that this situation represents for the province in terms of unrealized job creation and missed economic potential is enormous, with repercussions both now and for the long term.

Adding to the skill shortage challenge is what has become known as the “demographic bomb”. Declining birth rates and increased longevity have resulted in a “greying” of the population around the world. A report produced for the Canadian Alliance of Sector Councils in February 2003, underscores how this situation is expected to have a profound effect on our local labour market. The study outlines how, for a number of years, Canada’s birth rate has been falling rapidly and, in the year 2000, stood at an all time low of 1.5 children per woman. It suggests that by the year 2026, one in five Canadians will be 65 years of age or older – up from one in eight in 2001. As such, it has been projected that, over the next ten years, the number of Canadian workers aged 55 to 64 will increase by more than 50 percent. Significant skilled labour shortages are to be expected when these baby boomers begin to exit the labour market as they turn 65.3 Once again, the significance of this situation, in terms of negative impact on our provincial economy is enormous.

These issues have particularly serious implications for our rural communities, since many of the small businesses that represent the backbone of local economies lack the capacity to deal with the impending labour shortages. Compounding the problem is the fact that a large number of small business owners, themselves, will soon be retiring. Small businesses represent almost 98% of the total number of businesses in British Columbia – they employed 952,900 people in 2002, which represents 47 percent of the total employment in the province. Of the province’s 347,900 small businesses, 52% are owned by entrepreneurs over the age of 45. Twenty two percent are over the age of 55.4 A special breed of skilled workers will soon be required to take over the reins of these businesses as their current owners move out of the workforce.

The BC Chamber of Commerce Closing the Skills Gap report sums up the situation quite clearly:

British Columbia is at a skills crossroads. The quality and creativity of the workforce has become the single most competitive factor in the industrialized nations. The degree to which skill shortages are averted by stakeholders will be a large determinant of BC’s economic prosperity and social health.

Despite the apparent skill shortage, the BC unemployment rate for youth continues to be considerably higher than unemployment rates of other workers. This would indicate that there is a lack of understanding of the types of skills and experience younger workers require to gain employment. Furthermore, the business community needs to better communicate those requirements to the labour force.

THE NEED FOR ACTION

While the reports cited above have effectively flagged the broad skills shortage problem that is facing BC’s business community, very little information is available that provides details regarding the specific shortages that various types of businesses either are experiencing or foresee as a future challenge in various parts of the province. The most detailed information available in this regard is a recent study undertaken for the 2010 Winter Games Human Resources Planning Committee.5 The report underscores the limitations that we currently face in BC in attempting to capture detailed labour supply data, since all current data sources apply to the province as a whole and do not detail regional distribution. The report highlights the need for more research and analysis of labour demand and supply before definitive conclusions can be drawn for human resource/labour market planning and strategy development purposes.

More specifically, in order for BC to be in a position to deal effectively with its skills shortages issues, detailed information is required in the following areas:

• Exactly what skills are BC businesses looking for that are not found in the available workforce?

• Are all sectors being similarly affected? If not – what sectors are facing which shortages and to what extent?

• Are all regions of the province facing the same shortages, and to the same degree?

• What skills development/training programs and/or services are available in the various regions of the province to deal with these shortages? Are they adequate?

• What is the role of public education in supplying skilled personnel?

• Why are businesses not taking advantage of these programs and services to resolve their skilled labour requirements? What can be done so that they do?

• Are new types of skill development programs/services needed? If so - what is required and how could these new programs/services be developed and effectively delivered?

• What is the mechanism through which potential skill providers can gain knowledge of specific occupational or sector shortages?

Moreover, it is essential that BC’s business community – particularly small businesses operating in rural communities – together with the other stakeholder groups (i.e. schools, colleges, training facilities, etc.) in communities throughout the province, become meaningfully engaged in a process that will enable them take an active role in finding solutions to the province’s skill shortage problems.

This proposal outlines the framework for a public-private sector partnership strategy that will allow British Columbia to move forward in finding innovative, creative solutions to the skills challenge.

 

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1Closing the Skills Gap: A Report of the BC Chamber of Commerce Skills Shortages Initiative, April 2002.

2A Catalyst for change, a report produced for the Canadian Manufacturers and Exporters (BC Division) by R.A. Malatest and Associates, December 2003.

3The Aging Workforce and Human resources Development Implications for Sector Councils, a report prepared for The Alliance of Sector Councils by R.A. Malatest & Associates  Ltd., February 2003.

4Small Buisness Profile 2003: A Profile of Small Business in Britis Columbia, produced by Western Economic Diversification Canada, the BC Ministry of Competition Science and Enterprise and BC Stats.

52010 Winter Games Labour Supply and Gap Analysis (British Columbia 2003 - 2015), a report prepared for the 2010 Winter Games Human Resources Planning commitee by Roslyn Kunin & Associates, Inc., October 2003.