Talent Management Public Policy Issue: Should we make regular use of temporary foreign workers?

A recent article in the Vancouver Sun (20 April, 2011, “Are there too many foreign workers?”, by David Green, page A11) argues that Canada should be more reluctant to make use of temporary foreign workers (TFW) to meet talent shortages in the Canadian economy. David is an economics professor at UBC and an associate of the Canadian Centre for Policy alternatives (often thought of a left of centre counter research organization to the Fraser Institute). Davids concerns and arguement include:

  • The remarkable growth and reliance on TFW since 2004 (from 112,543 [2004]to 192,281 [2008] a 57% increase.
  • Canada admits close to 3* TFW as it does immigrants under the conventional “Economic class”.
  • The remarkable increase in “Elemental and Labourers” from 2005 to 2009 is 400%.
  • The list of TFW eligible occupations in Alberta and BC include janitors and food counter workers.
  • The moderating/depressing effect on wages by using so many TFW. Apparently real wages for high school or less educated workers starting a new job declined by about 20% between 1980 and the mid 2000s. Why should we support this situation  – the economy won’t stop if their wages rise.
  • The tenuous nature of labour rights for TFW.
  • Bringing in skilled workers (e.g., pipefitters and carpenters) reduces the ROI of investing in those occupations.
  • These consequences and concerns mean that we should have much more of a public debate on the policy and practices.

There are any number of places to begin to comment on Green’s argumentation and concerns. First though, I agree that if there are wide spread concerns about any public policy it is reasonable to ask that they be debated.

My main concern is there is a lot of supposition without any sense of evidence to support several of the claims (there may be evidence but it is not alluded to to) in the areas of reduce ROI on investing in skilling up people, how systemic or serious are TFW being exploited or abused (yes I have read the various press exposes on the subject – so I acknowledge that it apparently happens). The connection to using TFW in low skill occupations resulting in a 20% reduction in real wages (over 20years) seems a stretch given that many other factors could be at play and fully explain this result.

My main interest in this subject is that as a TM consultant I have the propensity to recommend to my clients that when they have a significant TM uncertainty and risk issue in their organization there is a prudent practice of having at least three active strategies to “cover it”. There will be a primary strategy (expected to deal with at least 80% of the concerns and two companion strategies that enable the client to deal with the unexpected and the volatility in the market place and/or the level of talent related activity within the organization.

Use of TFW is an option that can be used for any of the three strategies. I am aware of a number of occupations (often low skilled) that cannot be filled (especially in the food production and hospitality type industries. I recall with some irony the fuss a couple of years ago within the USA about the number of illegal Mexicans in the country. There was much posturing and histrionics spouted for several months until it became well understood that the agriculture business in California would virtually come to a standstill if all the illegals were sent packing. So having lower paying occupations go unfilled may not bring the country to its knees, but it can decimate an industry or local economy.

Any change to a public policy should be done with full appreciation for the primary, secondary and tertiary consequences. And to suggest that we should encourage increases in costs due to policy induced resource restrictions should never be taken lightly. Let those who would be on the receiving side of the impacts have some voice too.


About 123stilllearning456

As a management consultant I am passionately interested in talent management and risk/uncertainty issues. In the area of talent management I propose that we seek strategies that look beyond the staffing/employee centric frames of reference. I have been frustrated at the "closing down on possibilities" by these more conventional staffing/employee centric approaches. I have been impressed where people have found systematic solutions to their talent management issues by going beyond the conventional approaches. In the area of risk and uncertainty, I am interested in making this topic relevant to more normal decision making situations. My conceptual foundation is to use the micro-economist's fixed/variable cost theme. I also think it is important to look at these issues for people through their emotional and psychological lens. As a premise I think risk and uncertainty only exist where there is a person who cares about possible events and its consequences. Hence, risk and uncertainty are social based concepts (no sentience, no risk and uncertainty). A major influence on my thinking in this area is Nassim Taleb of "Black Swan" fame. This BLOG provides me with an opportunity to express my thoughts on topics that interest me. As this is an online diary, content is more important to me than polish. I apologize if this distracts from readers' enjoyment and learning. Still I find this a useful way to live up to my namesake, learn more from others and hopefully provoke creative thoughts and ideas in others.
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