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Canada’s Labour Market Canada’s Labour Market ChallengesChallenges A View from Canadian IndustryA View from Canadian Industry
Manufacturing 20/20Manufacturing 20/20
98 meetings involving more than 3,500 manufacturers and stakeholders
Input from 15 industry associations Cross-country survey of 942
manufacturers in 2005 National Manufacturing
Summit Report on Workforce
Capabilities
Top Strategic IssuesTop Strategic Issues56%
46%
41%
41%
37%
30%
28%
27%
26%
26%
24%
23%
23%
20%
20%
0% 10% 20% 30% 40% 50% 60%
RISING BUSINESS COSTS
STRONGER CANADIAN DOLLAR
CHANGING PATTERNS OF CUSTOMER DEMAND
AVAILABILITY/COST OF ENERGY
AVAILABILITY OF SKILLED & EXPERIENCED PERSONNEL
TECHNOLOGICAL CHANGE
COMPETITION FROM CHINA
BRINGING NEW PRODUCTS/SERVICES ONTO THE MARKET
HIGHER TAX & REGULATORY COSTS
INCREASING COMPETITION FROM OTHER COUNTRIES
MANAGING BUSINESS GROWTH
INTRODUCING NEW/IMPROVED PROCESSES
GLOBAL SOURCING BY CUSTOMERS
BUSINESS OPPORTUNITIES IN OTHER COUNTRIES
AGEING WORKFORCE
PERCENTAGE OF COMPANIES
Competing in World MarketsCompeting in World Markets Global markets – Global competition Competitors, partners, & customers around the world Global value chains & business networks – Supply chains compete Global sourcing – products, services, technology, information,
capital, people Success depends on delivering customer value = knowledge
embodied in products, services, and production processes Business as usual is not an option – New determinants of
competitive success New workforce requirements – skills and capabilities
Future Competitive Advantage?Future Competitive Advantage? Focus on Customer Success Mastering global supply chains Knowledge management Specialized products & services Innovation – Continuous commercialization of new and improved
products & processes New technologies & automation systems New business models and global value networks New market opportunities
Agility & Customization Customer Value – Design, Engineering, Service, Financing Time – Product Development to Customer Response
2020 Workforce Capabilities2020 Workforce Capabilities
A mix of creative problem-solving capabilities, technical know-how, business skills, and an ability to interact with colleagues and customers;
A higher degree of technical and technological expertise as production systems become more automated and more interconnected, and as workplaces incorporate advanced technologies such as nanotechnology, biotechnology, microelectronics, and robotics;
Continued reliance on the skilled trades, but in combination with other technical and business skills;
2020 Workforce Capabilities2020 Workforce Capabilities
A greater reliance on manufacturing and product engineering, product and process design, and scientific research;
Multilingual and multicultural skills, as business operations expand on a more global basis;
Management skills in the fields of manufacturing processes, supply chains, product and knowledge development, financing, and global business; and,
Agility, Teamwork, Problem-Solving – an ability to adapt easily to constantly-changing roles in a constantly-changing workplace and to work together to provide solutions for customers.
It’s all about…It’s all about… “Competing & Winning in the Global
Marketplace … where your competitor is only One mouse-click away on your customer’s computer.”
Vision – Customer success Culture – Lean thinking everywhere Leadership – Generating & sustaining followers Management – Achieving results through people Thriving on Change – Sustaining Success
A Changing WorkforceA Changing Workforce The average age in Canada’s manufacturing workforce is
48. Manufacturing employment has increased by 15% over
the past 10 years. The number of employees under the age of 45 has increased by 7%.
An estimated 255,000 people will retire from the manufacturing workforce by 2010.
Two-thirds of manufacturing workers under the age of 35 have a post-secondary qualification.
Over 27% of the manufacturing workforce are immigrants.
Recent immigrants accounted for 166% of the net growth within the manufacturing workforce over the past decade.
Availability of Qualified PersonnelAvailability of Qualified Personnel
78% - an important factor affecting innovation 39% - a significant factor affecting business
location decisions 37% - a strategic issues that will reshape
manufacturing over the next 10 years 30% - a constraint on improving flexibility 28% - a constraint on performance improvement 26% - a constraint on developing export markets 20% - a constraint on bringing new products to
market
Top Skill ShortagesTop Skill Shortages19%
18%
15%
14%
14%
13%
13%
11%
11%
9%
9%
8%
8%
7%
7%
21%
10%
18%
14%
7%
11%
8%
7%
5%
8%
7%
4%
4%
8%
4%
0% 5% 10% 15% 20% 25%
ENTRY LEVEL EMPLOYEES
ENGINEERS
EQUIPMENT OPERATORS
SALES & MARKETING
MAINTENANCE
PLANT MANAGERS
MACHINISTS
DESIGNERS
ELECTRICIANS
GENERAL MANAGERS
WELDERS
TOOL & DIE MAKERS
SCIENTISTS/R&D TECHNICIANS
CUSTOMER SERVICE PERSONNEL
COMPUTER PROGRAMMERS
PERCENTAGE OF COMPANIES
DIFFICULTIES FINDING
DIFFICULTIES KEEPING
Unsatisfactory Skill SetsUnsatisfactory Skill Sets34%
33%
29%
26%
20%
20%
18%
17%
15%
14%
13%
12%
12%
12%
10%
0% 5% 10% 15% 20% 25% 30% 35% 40%
PROBLEM-SOLVING
TECHNICAL SKILLS
TEAMWORK
SUPERVISORY/MANAGEMENT
BASIC EMPLOYABILITY SKILLS
INNOVATION/CREATIVITY
PROJECT MANAGEMENT
VERBAL COMMUNICATION
LEARNING/FLEXIBILITY
READING/WRITING
ENTREPRENEURSHIP
INTERPERSONAL
COMPUTER
READ/TRANSLATE TECHNICAL DRAWINGS
MATH
PERCENTAGE OF COMPANIES
Refusing Job ApplicantsRefusing Job Applicants33%
28%
26%
24%
21%
18%
18%
16%
14%
13%
10%
8%
5%
1%
0% 5% 10% 15% 20% 25% 30% 35%
INSUFFICIENT WORK EXPERIENCE
OTHER CANDIDATES HAVE BETTER QUALIFICATIONS
LACK OF BASIC EMPLOYABILITY SKILLS
INABILITY TO WORK IN A TEAM ENVIRONMENT
NO JOB AVAILABLE
LACK OF TECHNICAL/MANAGEMENT EXPERIENCE
INADEQUATE PROBLEM-SOLVING SKILLS
POOR REFERENCES
INADEQUATE ORAL COMMUNICATION SKILLS
INADEQUATE READING/WRITING SKILLS
INADEQUATE COMPUTER/IT SKILLS
LACK OF DEGREE OR VOCATIONAL QUALIFICATION
INADEQUATE MATH SKILLS
PROBLEM WITH IMMIGRATION STATUS
PERCENTAGE OF COMPANIES
Effectiveness of Effectiveness of Education & Training ProgramsEducation & Training Programs
23%
6%
18%
32%
27%
21%
46%
38%
31%
31%
7%
24%
7%
9%
11%
9%
8%
18%
20%
5%
9%
4%
14%
5%
14%
18%
12%
13%
14%
18%
12%
11%
11%
21%
24%
19%
15%
14%
22%
11%
12%
22%
17%
22%
9%
29%
20%
12%
18%
18%
6%
6%
16%
26%
23%
9%
29%
20%
12%
20%
18%
5%
6%
14%
6%
33%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
HIGH SCHOOLS
COLLEGES
UNIVERSITY GRADUATE PROGRAMS
UNIVERSITY POST-GRADUATE PROGRAMS
APPRENTICESHIP PROGRAMS
EXTERNAL TRAINING PROGRAMS
IMMIGRATION
ON-LINE LEARNING
PROFESSIONAL TRAINING PROGRAMS
COLLABORATIVE TRAINING
INTERNAL TRAINING
PERCENTAGE OF COMPANIES
NOT APPLICABLE TO BUSINESS NOT EFFECTIVE POOR
SOMEWHAT EFFECTIVE GOOD VERY EFFECTIVE
Critical HR IssuesCritical HR Issues
Attraction & retention of skilled personnel Basic employability skills Training – Basic & specialized technical skills Changing demographics – women, immigrants,
aboriginal workers Leadership, teamwork, problem-solving Workforce mobilization – leading to
performance improvement
Overcoming ConstraintsOvercoming Constraints
45%
44%
35%
34%
29%
27%
26%
24%
20%
19%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
UPGRADING EMPLOYEE SKILLS
IMPROVING OPERATING EFFICIENCY
INVESTING IN NEW TECHNOLOGY
STRENGTHENING TEAMWORK
CHANGING ORGANIZATIONAL CULTURE
DEVELOPING NEW PRODUCTS/SERVICES
RE-ENGINEERING PROCESSES
CHANGING MANAGEMENT STRUCTURES
IMPROVING CUSTOMER RELATIONS
REDEPLOYING RESOURCES
PERCENTAGE OF COMPANIES
Skills Training BudgetsSkills Training Budgets
9%
27%28%
19%
11%
4%3%3%
20%
26%
24%
14%
5%
9%
0%
5%
10%
15%
20%
25%
30%
NONE UP TO 1% 1% TO3%
3% TO5%
5% TO10%
10% TO15%
OVER15%
PERCENT OF PAYROLL
PE
RC
EN
TA
GE
OF
CO
MP
AN
IES
FORMAL TRAINING INFORMAL TRAINING
Outlook for Training BudgetsOutlook for Training Budgets
21%
53%
26%
35%
26%
39%
0%
10%
20%
30%
40%
50%
60%
HIGHER NO CHANGE LOWER
PE
RC
EN
TA
GE
OF
CO
MP
AN
IES
2005 2006
Incentives to Incentives to Increase In-House TrainingIncrease In-House Training
54%
35%
32%
23%
20%
18%
17%
13%
12%
11%
4%
0% 10% 20% 30% 40% 50% 60%
TRAINING TAX CREDITS
CUSTOMIZED IN-HOUSE TRAINING PROGRAMS
LOWER PAYROLL TAXES
BETTER PARTNERSHIPS WITH EDUCATIONAL INSTITUTIONS
ADDITIONAL GOVERNMENT FUNDING FOR TRAININGPROGRAMS
LOWER COST OF TRAINING
COLLABORATION WITH OTHER FIRMS
CUSTOMIZED TRAINING FROM SCHOOLS
MORE INFORMATION
BETTER ON-LINE TRAINING PROGRAMS
NO INCENTIVES
PERCENTAGE OF COMPANIES
Strategies Strategies to Address Future Labour Needsto Address Future Labour Needs
59%
44%
41%
39%
32%
25%
19%
15%
11%
9%
0% 10% 20% 30% 40% 50% 60% 70%
UPGRADE SKILLS OF CURRENT EMPLOYEES
IMPLEMENT WORKPLACE PRACTICES TOENCOURAGE RETENTION
INCREASE EMPHASIS ON RECRUITMENT
HIRE YOUNGER PEOPLE
INCREASE DEGREE OF AUTOMATION
HIRE RECENT IMMIGRANTS WITH FOREIGNTRAINING
REALLOCATE WORK ASSIGNMENTS
OUTSOURCE FUNCTIONS TO OTHER CANADIANFIRMS
HIRE MORE PEOPLE FROM THE ABORIGINALCOMMUNITY
RECRUIT WORKERS DIRECTLY FROM ABROAD
PERCENTAGE OF COMPANIES
ConclusionsConclusions Success depends on achieving results through people. Effective management of workforce capabilities needs to
be a strategic priority. Attraction, retention, skills development, mobilization
are key issues. Above all other sectors, manufacturing depends on
attracting and developing the capabilities of recent immigrants.
Workforce challenges will only increase – particularly for smaller firms.
Common problems – Local Solutions. Communication, Coordination, Collaboration.
Manufacturing 20/20:
www.cme-mec.ca/mfg2020/index.asp