Canada’s IT labour shortage: Challenges and opportunities

The productivity gap in Canada is widening. At the same time, the Canadian IT market is experiencing increased demand, yet has a serious forecasted labour shortage. In a research note released by IDC Canada, analysts examined Canada’s information and communication technology (ICT) sector as whole. IDC Canada points to several signals that both organizations and people interested in IT should be aware of:

  • The increased demand for skilled ICT workers. The Canadian demand for ICT skilled workers, both within the ICT sector and more broadly across all industries, will increase to over 100,000 workers in the next four years.”
  • The declining supply of undergraduate ICT professionals. Unlike most other Canadian undergraduate degrees, enrollment of high school students in ICT-related university and college programs is declining.”
  • The relentless pace of technology that drives the market needs for skilled ICT labour faster than the supply capacity. ICT employers’ needs for skills and education are changing rapidly. In contrast, education institutions are slower in updating the curriculums to meet changes in the market needs, and the time to educate and graduate an ICT student can take anywhere from 36 to 48 months.”
  • Canada’s aging population problem. The aging population problem in Canada is expected to influence labour markets in most industries. Taking into account that young people are taking longer to start a career, more people are retiring and fewer workers entering the labour market, the supply of ICT workers is expected to continue to fall behind the market demands.”

Responding to this problem, SAP Canada has taken a proactive approach to help bridge the productivity and IT skills gap here in Canada. When facing any problem, having a deep understanding of the problem holistically is critical for identifying and responding with potential solutions. Bob Elliott, managing director for SAP Canada, shared his organization’s approach as it relates to the role of technology, education, and attracting the next generation.

Brian Clendenin: What part does technology play in Canada’s productivity gap?

Bob Elliott: Economists and research papers are continually highlighting the widening productivity gap between Canada and the U.S. As the predominant measure of our standard of living, the productivity of labour in Canada has fallen notoriously short of standards set by the U.S. economy.

Research from Deloitte has shown that the output per hour worked in the business sector averaged just 0.7 per cent annual growth over the past 10 years, opening up a major competitive shortfall of 30 per cent against the United States. Technology is having a direct impact here. We know that technology is directly linked to productivity gains; it makes us work smarter per hour. Yet, per worker, Canadian companies invest only 53 per cent as much as the U.S. on ICT.

We’re seeing the effects of this everyday. It’s scary to see Canadian-headquartered companies disappear like Four Seasons and Molson. It’s something all businesses need to address by making the technology investments necessary to change. Additionally, what IDC’s research is showing is a declining trend among graduates in enrollment in full-time undergraduate ICT-related degrees. Without this educated workforce in place, we’re likely to see a further decline in our thinking around IT investments and its correlation to company productivity.

Clendenin: What effect do you think tech savvy school graduates could have on the future of business?

Elliott: Young people or millennials are already having an impact on how workplaces work, which will benefit our bottom lines. For example, Skype is a very normal thing now. It’s natural to conduct all sorts of relationships over video conferencing. In a global business, video conferencing saves flights, accommodation and the work time that would be lost on travel.

Also, younger people are a lot less attracted to the idea of sitting in an office all day, unnecessarily. Working from home, or from anywhere else, isn’t a weird concept, in fact it’s desired. Imagine saving half the money you spend on office space, and getting the same or a better result from a satisfied workforce. I think also, with technology being a more normal part of how we do things, the millennial generation are finding it a lot easier to adapt to new technology for the benefit of productivity gains.

Clendenin: Why do you think technology is a less desirable industry for young people?

Elliott: People throw around the word diversity a lot and it’s almost become cliché, but it’s a very real problem in our industry. The well-known IT leaders are predominately white males like Steve Jobs, Larry Page, or Mark Zuckerberg. So as an industry we’re only really attracting about 35% of the population.

To be competitive, companies need to attract the best talent, but already we’re missing out on a huge proportion of the population who [isn’t] interested in our field. I think another part of the problem is that it’s unclear to a lot of people what a career in IT would look like. There’s a stereotype around IT being geeky or boring. Not many kids want to grow up to be the ‘IT guy’ or a trouble shooter for Dell. It’s not immediately obvious where a career in IT can take you. And that makes professions like nurse, doctor, or teacher, a lot more attractive. It’s clear what you’re doing and where you’re going to go.

Clendenin: What can companies do to attract this generation of workers?

Elliott: I think a large part of it is about educating people from a very young age, before they even start an undergraduate degree. For example, Junior Achievement Canada does a great job of teaching kids the skills and education they need to survive in today’s economy. Companies like SAP send their business leaders in to teach them various courses and give them insight into their roles, exposing them to the opportunities available in IT today.

We’ve also been working closely with GirlSmart and recently held a computer science workshop for Grade 6 and Grade 7 girls where they used technology to create music and other things. The idea was to get them to love IT and introduce them to female businesses leaders who have been successful in the industry. I think this is the right direction to go in but our industry as a whole, especially in Canada, needs to do a lot more to foster a culture of innovation and growth.

Brian Clendenin
Brian Clendenin
Innovating the Canadian Enterprise at Box. Prior to Box, I served at the research firm Gartner and write on the topics of leadership, IT strategy, and the future of work. Invest my time speaking with engaging thought leaders.

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