Employment disruption ahead: Three ways federal policy can help workers

FILE: Just about ready to take the stage #CanadaDebates2019 (Photo: Jagmeet Singh/Facebook)

If the economy is a key issue this election, a central issue parties need to urgently address is the long-term employability of workers.

Beyond higher-profile election promises like the NDP’s proposed $15-an-hour minimum wage, and the Green Party’s plan to train fossil fuel workers in renewable energy industries, workers across Canada need Ottawa to be looking ahead to ensure people have the skills they need.

Threats to traditional sectors and jobs abound. Major disruption is predicted as the result of automation and artificial intelligence eliminating many jobs and drastically reshaping others, a process that’s part of the unfolding Fourth Industrial Revolution.

In my research on workplace learning and for a book I’m working on about the career impacts of the Fourth Industrial Revolution, I’ve identified three ways that Canadian policy-makers could promote the long-term employability of current workers.

Help people maintain needed skills

A shift from an “acute care” mindset to a “preventative care” one in employment policy would mean becoming more proactive to help people with jobs maintain or develop the skills they need to remain employable.

When a major employer closes (like GM shutting its Oshawa plant), provincial and federal governments often say they’ll assist workers with retraining to find new work.

But the GM case represents a more serious issue: As the automobile industry shifts from petroleum-based to electric cars, new skills will be needed.

An approach based on preventative care would anticipate such changes. It would focus on helping employers and workers prepare for the transition while workers still have jobs — so employers might consider current workers for fundamentally different jobs.

A summer report about how federal departments are preparing for the election and beyond said top civil servants have been told that employers’ demands for skills will change more and more frequently in coming years.

The proposed Canada Training Benefit touted in the Liberals’ 2019 budget suggests a shift of focus. It provides workers with a tax credit for half of training costs, and EI for time needed to train.

But with a lifetime tax credit of $5,000 and single technical training courses costing upwards of $2,600, the tax credit is inadequate to actual costs for some lines of work, especially technology-focused ones.

Expecting workers with families to interrupt their careers and live on EI might not be a realistic option for some.

Broaden training benefits

Federal policy should encourage employers to provide more training to a wider base of employees — not simply to middle and executive managers.

One of the first lines of defence against atrophying skills is employer-provided training. But evidence suggests that Canadian employers’ investments in training are not keeping up, according to the Conference Board of Canada Learning and Development Outlook.

Spending increased from a mean of $688 per employee in 2010 to $889 in 2017, but when adjusted for inflation, the increase is just $109 per employee. Worse, when adjusted for currency differences, this amount is just over half (52.5 per cent) of what the United States spends per employee ($CAD 1,694).

The same Conference Board research also says that spending increases only benefited senior managers, executives and middle managers, who received more hours of training in 2017 than in 2010. By contrast, supervisors, professionals, trades and non-technical workers — middle- and high-skilled jobs — all saw reductions in training hours.

This doesn’t even address training for contingent workers, who aren’t technically employees but still need skills to provide their services.

Although some employers raise concerns about a skills shortage, it doesn’t seem that they’re doing their part.

Employer-focused policy should address how much training employers offer, how employers, professional associations or governments recognize the training, and how employers will distribute training equitably.

Policy should also distinguish compliance training that the employer must provide, and training that enhances worker capacity. Ideally, the government would also offer incentives for organizations to provide capacity-building training to their suppliers and contractors.

Quebec’s current Act to Foster Workforce Skills Development and Recognition — formerly called the Act to Foster the Development of Manpower Training — was passed in 1995 to respond to employees’ low participation rates in training. The act now requires employers with payrolls exceeding $2 million to invest at least one per cent of total payroll in training. Studies suggest that, although not perfect, the law has increased how many people participate in training.

Give incentives to train

The federal government should also offer incentives for workers to participate in training, for example in the form of tax credits.

Employers certainly have a responsibility to ensure that their workers have the needed skills. But 64.5 per cent of of 802 randomly selected Canadian workers who participated in the 2018 Conference Board Study of Informal Learning said that responsibility for continued learning is shared between workers and employers. The workers represented a cross-section of Canadian industries.

But workers’ behaviour suggests limited commitment to continued learning. In the same Conference Board study, 17.7 per cent of workers invested less than $100 a year in their continued learning and another 23.8 per cent spent between $101 and $250 annually. And, 41.5 per cent of workers spent less than one hour learning per week. That’s not all their fault. Some employers actively discourage learning on the job.

Policy should include incentives to participate in both formal and self-study learning, and supports for the latter.

Federal policy should also address the growing range of training options available to workers, like micro-credentials, coding schools, Massive Open Online Courses (MOOCs), certificate programs and voluntary certifications.

The latter two are often treated interchangeably but are unrelated concepts. The government could help clear up confusion and require accurate labelling of programs. This matters because gaining credentials can offer a cost-effective, quicker route to competence than many traditional degree programs, but only if everyone knows what the credential means.

Although public policy cannot prevent the impact of automation and AI, it could define how changes affect employers and employees alike.

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