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