Labour and skills shortages are the most pressing challenges facing manufacturers today. CME is working to expand the labour pool; improve education programs; and lower the cost of on-the-job training.
Why It Matters
Access to a large, high-quality workforce is critical to manufacturing success. It boosts output, productivity, and profitability. It also drives innovation and is vital to taking the fullest advantage of new technologies and production methods.
CME’s 2022 Labour and Skills Survey, which received responses from 563 manufacturers from across the country, shows just how much labour and skills shortages are hurting the Canadian economy:
- In the last year alone, labour and skills shortages in the manufacturing sector cost the Canadian economy almost $13 billion, a consequence of lost sales, penalties for late delivery, and postponed or cancelled investment projects.
- For the second consecutive year, more than 80% of manufacturers reported facing labour and skills shortages, up sharply from 60% in 2020 and 39% in 2016.
- 80% of manufacturers reported that labour shortages in related sectors, like transportation and logistics, are also negatively affecting their business.
- 15% of manufacturers are considering moving some or all their production outside Canada due to a lack of workers, indicating that labour shortages are also limiting the sector’s future growth prospects.
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Supporting workplace training
According to CME’s 2020 Management Issues Survey (MIS), skilled labour shortages is the most important issue facing manufacturers today. Companies are playing a growing role in workforce training because too few students are graduating from relevant programs; and because of the increasingly-specialized skills requirements for advanced technologies and production processes.
IMPACT ON MANUFACTURERS
Labour and skills shortages are a major obstacle to operational efficiency, productivity, technology adoption, and innovation. The MIS tells us there are four main barriers preventing manufacturers from investing more in on-the-job training:
- They are too busy to afford the down time;
- They are concerned about losing their investment should their employees leave;
- The cost of training programs is high; and/or
- There are no existing programs that fit their specific needs
On-the-job training is needed to supplement post-secondary education and to adapt to technological advancements. CME helped develop and design the Canada Job Grant, advocated for the Apprenticeship Job Creation Tax Credit, and pioneered the development of work-integrated learning (WIL) programs in Canada. We continue to push for expanded federal and provincial supports for on-the-job training. Our focus is on:
- Improving the Canada Job Grant with more funding, easier applications, multi-year training approvals, and allowances for in-house training;
- Working with manufacturers to increase their commitment and funding for WIL;
- Increasing government support for WIL, especially for those businesses that can leverage their training assets to help other businesses in their supply chains.
Attracting more women to jobs in manufacturing
Women account for only 28% of the manufacturing workforce. Female under-representation is especially a problem in production-related occupations, with women holding less than 5% of all skilled trades jobs across Canada. Attracting more women into manufacturing professions is critical to helping companies grow and replace the aging workforce.
IMPACT ON MANUFACTURERS
Labour and skills shortages are the biggest issue facing manufacturers today. According to CME’s Management Issues Survey:
- 69% of respondents face immediate shortages; 75% expect shortages within the next five years.
- Skills shortages is the top barrier to new product innovation
- Access to skilled labour is the most important factor businesses consider when deciding where to make their next major investment.
- Women represent a vast and relatively untapped resource that offers a solution to these problems.
CME is dedicated to supporting, promoting and inspiring women to pursue careers in manufacturing. Our campaign, We Can Do It, is aimed at increasing the number of women in manufacturing by 100,000 in 5 years. We Can Do It will focus on the following initiatives:
- Engage and Inspire – Develop the pipeline of qualified women by promoting STEM and skilled trades career options to young women and girls.
- Attract and Retain – Increase the number of women entering and staying in the manufacturing workforce.
- Empower, Support and Accelerate – Help women achieve success in the workplace by breaking down barriers to their personal and professional growth.
COMMUNICATION WITH GOVERNMENT
- Remarks on Bill 288 Building Opportunities in the Skilled Trades Act, Presentation to the Ontario Standing Committee on Finance and Economic Affairs
- 2020 Federal Budget Submission
- Remarks on Canada’s Manufacturing Sector, Presentation to the Parliamentary Standing Committee on Industry, Science & Technology
- Submission, BC Labour Code Review
Challenges & Solutions
ATTRACTING & RETAINING YOUTH
Not enough young Canadians are choosing to pursue a career in manufacturing. The education system puts a premium on university paths at the expense of skilled trades. As a result, students are not connected to the jobs available.
Solution: Promote manufacturing and realign the education system to create 150,000 new full time jobs for youth in manufacturing.
- Promote Careers in Manufacturing to Youth
- Refocus Canada’s Education System to Connect Youth to Jobs
- Create Regional Industry Councils
- Expand efforts to attract women and under-represented groups into manufacturing
Manufacturers are struggling to keep up with the cost of training. Upskilling workers is the first step businesses must take in order to invest in automation, new machinery and equipment.
When this does not happen, innovation and competitiveness suffer.
Solution: Create incentives for employers to enhance investments in training
- Create an Employer Training Tax Credit
- Help Employers Expand
- Work-Integrated-Learning Offerings
- Invest more in management training capacity
Manufacturers are increasingly using immigration to supplement their workforce but there are not enough immigrants to meet the demand. Temporary worker programs are becoming increasingly burdensome and costly to use.
Solution: Reform Canada’s immigration system to bring in 500,000 economic class immigrants.
- Increase economic immigrants to 500,000 a year
- Update Canada’s immigration point system to align to employer needs
- Expand current Provincial Nominee Program
- Better leverage Canada’s post-secondary system
- Enhance Temporary Foreign Worker Program
CME REPORTS & PUBLICATIONS
2022 LABOUR & SKILLS SURVEY
In this survey, we return to an issue that has been an ongoing challenge for manufacturers: labour and skills shortages that act as a serious impediment to growth. This report details the survey’s main findings and provides recommendations to governments on how best to address these persistent and chronic shortages in the sector.
2018 MANAGEMENT ISSUES SURVEY
CME’s biannual Management Issues Survey (MIS) is CME’s most important tool for taking the pulse of the manufacturing community. It provides valuable insight into the mindset and concerns of manufacturers – both in terms of their day-to-day struggles as well as their longer-term strategic goals.
UNTAPPED POTENTIAL: ATTRACTING AND ENGAGING WOMEN IN CANADIAN MANUFACTURING
In Canada, women account for 48 per cent of the labour force but only 28 per cent of the manufacturing workforce. To better understand the current realities of women in manufacturing CME released Untapped Potential, an action plan identifying five areas where action is needed in order to increase the number of women in manufacturing.
CME SERVICES FOR MANUFACTURERS
MANUFACTURING MONTH IN CANADA
In October, we celebrate Manufacturing Month which helps raise the profile of our industry to government, youth, the workforce, and to the public. CME joins forces with our partners across the country including chambers of commerce, boards of trade, local manufacturing companies, and educational institutions to organize plant tours, workshops and networking events.