Three articles over the last few weeks (Provincial performance is uniformly dismal, Three steps toward correcting youth un(der)employment, Widening ‘skills gap’ leaves ‘lost generation’ of graduates unable to …) discuss structural issues affecting Canada’s future economic wellbeing and related employment opportunities for its citizens.
This post examines how an organization could take advantage of this troubling contextual landscape.
For the impatient the answer: “Got lemons, make great lemonade!”
The first article link above provides a useful context. the suggestion is we can look at the context of labour productivity through three perspectives:
- Labour composition – the quality of the working population. This article suggests that this isn’t main issue in Canada. The other two articles linked above suggest that this assumption may be premature. Clearly though, the quality and quantity of relevantly skilled talent is a significant factor in an organization’s success
- Capital intensity – the investment in machinery, equipment, and infrastructure that the aforementioned labour can make gainful use in getting productive work done. Results on a provincial basis varies across Canada in terms of the rates and amounts of investments being made. At simplistic level, if your workers are at a disadvantage to your competitors in terms of the “tools” to be drawn upon you have no reason to expect long term success (without help from someone else)
- Multi-factor productivity (MFP) – everything else not captured above that improves productivity. This may include economy context structures, public infrastructure, taxation and other “costs-of-doing business” elements, etc. At the business level this could cover priorities, some aspects of your processes and your resources. According to this article the main culprit to lagging productivity improvements is in the MFP area.
The other two articles linked above call into question the health of the labour composition element.
The second article (three steps …) examines some of the structural issues contributing to youth un(der)employment. One is the creation of skill mismatches during schooling (including post secondary). A second issue is that fewer and fewer employers are providing on-the-job training. Leading to a third issue, the greater propensity of younger workers to move laterally to pick up needed skills through diverse work experiences.
As tempting as it may be to do engage in the blame game, it does not contribute to any helpful change (except perhaps the cathartic effect of emotional venting). People will do what they see as being in their best interests (employees and employers).
This article focuses on suggesting what the education business could do differently. Clearly though this will not be enough on its own as it will take employers to see (and realize) the benefits of investing longer term in their employees.
The third article reinforces much of what is covered in the second with the addition of how the student has a responsibility in the solution too. The observation that there is a paucity of credible and helpful information on where the current and future opportunities are/not are is touched on as well.
Yes Governments have an opportunity to contribute: business friendly while at the same time respecting social priorities around safety, health, environment, etc. The key is to meet these needs though solutions that are NOT just based on regulations and questionable incentives. For this writer, a major issue with many governmental solutions is they are virtually impossible to dismantle when found to be ineffective, obsolete, and ladened with undesired unintended consequences. It seems that we are inclined to bandaid the “not working too well” rather than replace with something more useful and relevant.
Yes the education business could be better at creating more seats in areas of employment need and growth and reducing seats in areas that are adequately supplied. But as we all know, there is politics in education too regarding change to what is taught and how it is taught. Also education institutions are faced with the the issue of credible current and future needs, and, the fact that to do something really different takes time to implement. I suspect that it could take up to 3 – 5 years to do anything fundamentally different.
What about businesses themselves. They are the beneficiaries and victims where labour composition is matched/mismatched to their needs.
What creates a match/mismatch? The business model which a MFP. How I choose to operate leads to what kinds and numbers of talent I will require. Investing in on the job and future job learning is a form of “capital appreciation”.
To know how, where and by how much to invest takes a disciplined mind and approach, but it is doable. Will there be loss through attrition? Yes! That is a good thing, as it enables the renewal and reshaping as the business itself evolves.
But how we choose to organize and set ourselves up is the key. We can choose to organize so we can accept and make gainful use of people with partial desired skill sets. As these people contribute, we have the information to determine who is worth investing more in , how and where. There has been research done over the years on how much more beneficial a star producer is in particular roles (those that are in competency related work will have access to this information).
Several years ago I was involved with doing workforce planning related work (talent management by another name). We resolved the “economics” of investing in development by getting data on how people were more productive as they developed in their role. This fundamental insight allowed management to make astute business decisions regarding intake of new “undeveloped” people. The payback was calculable and more importantly observable (because we knew how to observe for it).
Businesses that know how to do well what their competitors struggle with will dominate. In talent management, it is about knowing where, how and how much to invest in development of people. Have the facts and the methods of observing “running” benefits is a very useful business tool.