How to Overcome Canada’s Tech Talent Shortage

By Julia Blackburn, May 15, 2023

Canada has bounced back following the Covid-19 pandemic, with record-low unemployment numbers and steady labour force participation. Yet, with a growing population, Canada is at risk of falling behind due to critical labour market shortages, especially in tech.

As the pandemic represented a period of increased automation and digitization, the tech industry boomed. Canada now finds itself with a tech talent shortage and employers are struggling to find and retain individuals with in-demand digital skills. According to a 2021 report from KPMG, 68% of Canadian businesses struggled to hire skilled tech talent to foster measurable growth. There continues to be a growing number of available tech roles in Canada, with an estimated 2.26 million digital economy jobs predicted by 2025.

To remain competitive as a digital leader, we must leverage untapped talent in Canada from groups such as women, newcomers, and job-seekers in rural and remote areas, who tend to lack access to adequate job training and opportunities. To benefit from the talent of these groups, we must reduce barriers to education and training, ensure our workforce development programs are informed by industry needs so that job-seekers are equipped with the digital skills of today and tomorrow, and encourage employers to embrace new hiring philosophies and sources.

What’s Behind the Tech Talent Shortage in Canada?

According to Salesforce Canada’s 2022 Digital Skills Index, 81% of Canadians say they do not have the resources to learn the digital skills required by businesses today. A recent report by Deloitte Canada states that Canada is falling behind on digital equity, with “growing gaps in access to digital technology and skills development.” The report goes on to reveal that age, ethnicity, income, and geographic location are the most prominent factors influencing the digital divide.

Traditional forms of education, such as college and university, are not always a viable path for Canada’s most vulnerable groups who face financial challenges. Moreover, the length of time required to secure traditional degrees often means tech skills learned are already obsolete by the time students graduate.

The rapid pace at which technology is evolving in the post-pandemic era requires us to find alternative paths to training and upskilling with fewer barriers, so that groups underrepresented in tech, such as women, newcomers, and individuals living in rural and remote areas, can successfully join the tech economy and fill the demand for digitally skilled workers.

While the tech sector has experienced significant growth in recent years, women only occupy 23% of tech roles. Women of colour face an even greater disparity in the tech sector, representing only 2.5% of the workforce. Although employment rates for women bounced back faster after the pandemic in Canada, women are still underrepresented in higher-paying industries such as tech.

Immigrants also face additional barriers to employment in digital roles in Canada. It is estimated that highly educated newcomers lose out on up to $12.6 billion in wages a year due to underemployment. A lack of foreign credential recognition leaves many newcomers underemployed despite having valuable post-secondary education and experience from their home countries. While many immigrants have foundational tech skills, they lack the Canadian work experience to accompany them, and businesses are losing out on newcomers’ valuable expertise. Additionally, many immigrants are coming to Canada later in their lives and careers and have often already spent money on education and have families to support, which prevents them from accessing expensive traditional forms of education.

Job-seekers in rural and remote areas also lack access to training and job opportunities, facing additional barriers due to their geographical location. Despite the rise of remote work roles, individuals residing in remote areas must ensure they have the skills necessary to be competitive in the digital market, but typically, these communities are underserved and may not have adequate technological resources or connectivity. Many Indigenous peoples also live in rural communities and represent only 1.4% of the tech workforce.

What Canada Must Do to Overcome the Tech Talent Shortage

For underserved and underrepresented groups to enter the workforce and fill the growing number of vacant tech roles, we must ensure that these groups have access to industry-informed education and training, which requires us to address barriers such as financial means, time, and relevance of skills. Once these groups are equipped with the most up-to-date knowledge and skills, employers must ensure that equity, diversity, and inclusion (EDI) are a priority in hiring and look to non-traditional groups to fill vacant tech roles.

  • Invest in Microcredentials

Tech skills are omnipresent in our ever-increasingly digital world and are beneficial in almost any industry. Canada must invest in digital training initiatives to create free and low-cost training programs, such as NPower Canada’s three-month workforce development program, that can equip underserved groups with the necessary skills to be successful in the digital economy.

As traditional higher education paths can be expensive and time-consuming, they tend to exclude some of Canada’s most vulnerable groups. Micro-credentials can play a major role in the future skills training and education in Canada as a more affordable means through which to acquire in-demand skills, and can often still be completed by individuals who have other commitments such as elder and/or childcare as well as part-time or full-time employment. Micro-credentials can also often be offered online, which makes it easier for individuals juggling responsibilities and for individuals from rural and remote areas to access training.

Moreover, micro-credentials may be better suited for learning tech skills, as constant innovation in technology means that in-demand tech skills are always evolving. Short accreditation that demonstrates a commitment to lifelong learning can help bridge job-seekers’ pre-existing skills and knowledge to meet the changing demands of the labour market.

  • Create accessible programs that prepare job-seekers for the future

Good workforce development always begins with industry and employers, not with the job-seeker. Workforce development initiatives should work closely with industry experts and employers to best understand the in-demand skills of today’s and tomorrow’s market. NPower Canada collaborates directly with industry leaders to understand the most relevant skills that their participants should learn. These partnerships will lead to the creation of the most relevant training programs, thus creating direct talent pipelines for employers and getting job-seekers into tech roles more quickly and effectively.

Since tech skills rapidly evolve and are required in a diverse range of industries, it is also important that workforce development programs also teach learners transferable professional skills. More than 61% of professionals say that soft skills in the workplace are just as important as digital skills. While employers have traditionally focused on hard skills, they should also be looking for employability skills that indicate career sustainability to fill the growing number of digitally-enabled roles and retain talent.

Additionally, when employers focus on transferable skills during the hiring process, they should shift the focus from who the candidate is and what experience they have to the candidate’s potential, reducing bias in the hiring process. Training programs which incorporate professional development as well as tech skills are therefore more effective in cultivating the next generation of digital talent.

Programs that focus on employability skills can be particularly beneficial for newcomers who are already equipped with technical skills but lack Canadian experience and an understanding of Canadian workplace culture. With the Government of Canada announcing that they hope to welcome 1.5 million immigrants over the next three years, newcomers will be an essential resource to help Canada overcome the tech talent shortage.

  • Look at non-traditional pathways to tech and hire diverse talent

While governments and policymakers have a role to play in investing in accessible and holistic workforce development programs, their efforts will be futile if employers are not committed to EDI during the hiring process, or if employers do not recognize micro-credentials as valuable and credible forms of education. It is essential that they hire based on skill and potential and not only on traditional Canadian university pedigree.

Embracing EDI is critical in driving growth, as demonstrated by a recent report from McKinsey which found that organizations with strong gender diversity are 25% more likely to outperform competitors and those with more ethnic and cultural diversity are 36% more likely to outperform competitors. Diverse candidates bring rich experience and perspectives to the table and could help drive economic growth by 50%.

Employers must be more creative in the hiring process and expand their sourcing net to identify non-traditional hiring channels. If not, employers will continue to find themselves competing from an already too-narrow pool of traditional tech talent in Canada and miss out on untapped talent that brings with them diverse backgrounds and experiences. Currently, there are an estimated 1.7 million Canadians excluded from the digital economy, including BIPOC, immigrants, individuals with disabilities, and older people. Employers need to leverage this existing workforce.

To attract non-traditional candidates, employers should work closely with training and education programs in addition to colleges and universities and focus on a skills-based approach to hiring rather than just an education-based approach, and begin to recognize micro-credentials as evidence of skill and potential. Employers also need to ensure that EDI is embedded throughout their organization so that diverse talent can see themselves in their companies.

To summarize, while there exists a tech talent shortage in Canada, there are pools of untapped talent from groups such as women, newcomers, and job-seekers in rural and remote areas that can be leveraged for Canada to remain a global leader in tech. In order to take advantage of the diverse talent that already exists, workforce development programs must design their programs in ways that reduce barriers to training and employment and ensure that they focus on the most in-demand skills of today and tomorrow, and employers must embrace new modern hiring practices and seek alternative hiring sources.