Canada’s approach to training and development needs reform. Billions of dollars are being spent annually on job training and skills development with limited evidence of lasting benefits. Most problematic, employers’ talent needs (i.e., actual skills demand) are not formally embedded in the process of determining how or where money is spent, leaving a fundamental disconnect between demand for skills and the investments being made by governments.

What needs to be improved?

• Investment model: Establish Public-Private Partnership models for training and career development investments to ensure that government and employers collaborate on decision-making.
• Data analysis: Collect, track, and analyze investment and outcome data at the employer and individual level to better understand what programs and services are working. Use predictive modelling to support forecasting of skills shortages and help direct investments.
• Evaluation: Fund and develop employment and training systems based on employment outcomes.
• Process: Implement innovations to accelerate job readiness, expedite job placements, strengthen retention and improve system service delivery.
• Program design: Launch pilot projects to test assumptions, share learning and refine recommendations while transformational programs and services are being designed.

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The goal of these proposed reforms is to help unemployed Canadians find lasting employment more quickly than is currently possible with the majority of existing programs. Government-funded employment programs must shift away from being driven by perceptions of labour supply needs to being driven by actual employer demand.

The current system is operated and funded to supply skills and talent to the labour market. This leads to program administrators and related staff viewing jobseekers as their customers, such that the focus is on what skills and talents the individuals already have. In this model, demand in the labour market – the skills and talents companies actually need – is secondary, resulting in a mismatch between the demand for talent and the supply of job-ready people. By working to explicitly match unemployed talent to current and forecasted demand, thereby treating employers and job seekers as equally important customers, investments in training and employment services will yield a much greater return.

With bi-lateral labour market funding agreements in the process of being renewed, the time is right for significant reform to the way Canada approaches employment and training services. We recognize that some governments have already begun to take incremental steps toward demand-led systems change. We believe, however, that more can, and must, be done.

What are the benefits of a demand (employer) focused system?

Adopting a demand-led approach that meets the needs of employers will create significantly more opportunities for population groups overrepresented in unemployment statistics (including those who have challenges accessing the labour market) to access decent and sustainable jobs. To get there, however, collaboration is needed from all levels of government. Each level must be willing to critically examine their current employment and training services and be open to fundamental change.

Shifting the current employment and training support system to one that is demand-led will also have “knock-on” benefits across government. A major challenge commonly experienced by employers has been that job seekers referred through the current system are ill-prepared for their entry or transition back into the workforce. This is often due to a lack of essential skills and knowledge of workplace norms and expectations required to succeed. Results have included both poor job retention and, in too many cases, individuals returning to government programs and assistance.

In contrast, upskilling otherwise barriered job seekers in ways that meet employer needs and streaming them into more suitable and sustainable employment can liberate more individuals from their dependence on publicly funded programs and services, thereby achieving significant taxpayer savings through a positive return on investment for government.

Ultimately, a shift in focus from placing skill sets not necessarily in demand to training people with new skill sets that are in demand is the fundamental change needed to achieve a sustainable and productive labour market in Canada. Additional benefits include:

• Facilitation of recruitment channels to better match individuals receiving government-funded employment services to employers – creating a business case for employers to actively participate in the system.
• Enabling ongoing research for innovative models and global best practices.
• Enhancing responsiveness to local employer needs and the diversity of the labour markets represented in communities.

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Contents

Preface
Executive summary
A mismatch of supply and demand – The current environment
A solution for better outcomes – Demand-led employment & training services
It’s time for change – Steps to action
A collaborative responsibility
Appendix – Select demand-led initiatives
References