The IT Talent Gap: Answering Canada’s Greatest Human Capital Challenge
- Stéphane Boisvert, Speaker
- Media Type:
- Item Type:
- Technology and the talent required that makes technology a vital part of our national economy. Reference to the Institute for Competitiveness and Prosperity’s Report on Canada 2008 and the need it pointed to. Competing in the global economy and what that means in terms of innovation, especially in the information and communication technologies field. Canada having the technology; getting the talent as the problem. A wide and growing IT talent gap and why that is serious. The challenge for Canada. Why the IT talent gap is so urgent. Some serious facts and what they mean for Canadian companies. How we got here. An explication of the reasons. The heart and the root of the problem. What Canada is putting at risk as the talent gap widens. What large, advanced metropolitan economies have to lose. Toronto as an example. Research done by the Conference Board for Bell. What the research is confirming. The situation in other countries. A common Canadian, American and European problem. Business and government taking action in the U.K. and the United States. Two possible answers to the IT skills crisis for Canadian enterprise. The Canadian Coalition for Tomorrow’s IT Skills and what they are doing. Goals that all Canadians can share. Three major areas of focus. Members of the coalition. The coalition’s strategy. The Conference Board’s three models of excellence. Some remarkable new initiatives. How this coalition can succeed.
- Date of Original:
- June 12, 2008
- Language of Item:
- Copyright Statement:
Empire Club of Canada
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- Full Text
June 12, 2008
The IT Talent Gap: Answering Canada’s Greatest Human Capital Challenge
President, Enterprise Group, Bell Canada
Chairman: Catherine S. Swift,
President, The Empire Club of Canada
Head Table Guests:
Verity Craig: Managing Director, CV Management, and Director, The Empire Club of Canada
Shubham Datta: Grade 12 Student, Runnymede Collegiate Institute
Grant Kerr: Associate Pastor, St. Paul’s United Church, Brampton
Tom O’Neill: Member of the Board of Directors, BCE
Dennis Cote: Vice-President, Telecommunication Services, CIBC
Tim Reid: Director, Business Development, ZED Financial Partners, and Director, The Empire Club of Canada
Francois Morin: Chief of Staff, Enterprise Group, Bell Canada
Mario Bélanger: President, Avaya Canada.
Introduction by Catherine Swift:
Throughout our history, the Canadian economy has had a competitive advantage over many countries because Canada has always had a relatively highly educated population and has been able to fill many of our skills gaps by immigration. More recently, there has been much discussion in Canada and in other developed countries on worsening labour shortages in many sectors of the economy, and the fact that they will be only getting worse in the future as a result of demographic trends. Although these shortages exist in virtually all sectors, they are definitely more acute in some industries, and the likelihood of being able to rely on immigration as we have in the past is much reduced as nations around the world compete for immigrants with the most desirable skill sets. One of the sectors in Canada experiencing some of the worst problems is the information technology sector. And considering the fact that information technology underpins just about everything in our modern economy, this is a very serious situation.
Our speaker today will address the growing IT talent gap, and what we can do about it. Stéphane Boivert is the President of Bell Enterprise Group. His career in technology began in 1985 when he worked for IBM as a commercial accounts manager. In 2002, Sun Microsystems offered Stéphane the challenge of turning around the corporation’s activities in Canada. In only three years, he completely revamped the operations of the Canadian division and moved it from fourteenth to first place in terms of profitability and earnings growth. In 2005, he moved to California to lead a specialized Sun Microsystems group dedicated to the integration of international acquisitions. In August 2006, Mr. Boivert was named President of Bell Canada’s Enterprise group. In this position, he is responsible for leveraging the group’s market value proposition and maximizing financial performance. He currently sits on the Board of Directors of Wellspring, an organization dedicated to offering support to cancer victims with numerous centres in Ontario. He is also on the Boards of the Montreal Heart Institute Foundation and the Fondation de l’Hôpital Sainte-Justine. In 2000, he was named to Canada’s prestigious “Top 40 under 40” list of successful business people.
Please join me in welcoming Stéphane Boisvert.
Thank you for that warm welcome and good afternoon to all of you. Also, thank you to the Empire Club for providing Bell one of Canada’s great platforms for the discussion of important issues facing our nation. I am here today to talk to you about one of those “important issues” about technology and especially about the talent required that makes technology a vital part of our national economy.
A few weeks ago the Institute for Competitiveness and Prosperity’s Report on Canada 2008 pointed to the need for investing in both technology and people as a major foundation of Canada’s long-term prosperity.
They are right on the money. Competing in the global economy means continuous innovation, especially in information and communications technologies, or ICT. Those technologies rely on highly trained people who create them, run them and push them into new areas of economic life. When companies, sectors and countries are strong in both information technology and the talent to put technology to work, there is no end to what they can do.
We’ve got the technology. Getting the talent is the problem.
We have, in fact, a wide and growing IT talent gap. It is serious. In some sectors, talent shortages are becoming emergencies. In other sectors, that emergency is a storm cloud on the horizon. If this crisis is not addressed and addressed now, we will pay a substantial economic price.
The evidence adds up to one conclusion: this IT talent gap represents Canada’s greatest human capital challenge. I know that is a bold claim, but the evidence is conclusive. I have spent my professional life in IT and I believe that the situation facing Canada today has never been more serious than the one we are facing today.
Part of what makes this human capital challenge Canada’s greatest one is because it cuts across individual, company and public interests. The IT talent gap is about hundreds of thousands of career choices. It is about Canadian companies and their ability to hire top IT talent to grow and innovate. And it is about policy. Networks of education, information systems, training and innovation are all at play here. In fact, everything I will say today involves these elements in one way or another.
In other words, how we confront the IT talent gap challenge will tell us a lot about how we educate, motivate and innovate; how we create good policy frameworks and policy environments; and how we connect, collaborate and compete.
That challenge—and how we are answering it—is the subject of my talk today.
The first question is “Why”—Why is the IT Talent gap so urgent?
The main reason is simple. IT systems and IT work have been integrated into almost every economic activity.
Canada’s 605,000 IT professionals work in the most mission-critical, technology-intensive sectors of our economic life: in the professional, scientific and technical services; in manufacturing and public administration; in information and cultural industries; in finance and insurance. They are electrical, electronics and software engineers. They are the analysts, programmers and technicians, operators, designers and testers.
And the really sad and alarming fact is they are an endangered species.
The most serious facts are spelled out in the Conference Board’s 2008 study on Canada’s IT skills gap called “Securing Our Future.” The study predicts that the demand for IT worker positions will reach—at least—89,000 in the next three to five years—a demand that will be very difficult, if not impossible, to meet. The total cost of not filling those positions would surpass $10 billion ($10.6 billion). Looking beyond 2012, the critical undersupply of IT talent will only get worse.
Canadian companies cannot keep fielding teams short of key players in key positions.
The second question is, “How did we get here?”
There are a few reasons. An aging population is one. The baby boomer retirement wave is also beginning to affect the entire labour force. For many reasons we are just not convincing enough women and skilled immigrants to enter the IT field, to our great cost.
A more specific factor is the flight from information technology occupations. The technology bust of 2000 and story after story of companies offshoring their IT—whether real or perceived—have had a negative psychological impact on IT career choices.
The heart of the problem is education, and specifically, career choices. That’s where this human capital challenge begins and that’s where it must be solved. The situation is depressing: enrolments are declining in technology-based subjects in secondary school. We see the consequences in universities and colleges.
The numbers are shocking. One recent independent survey of computer science enrolment in Canadian universities reveals Ontario is down about 50 per cent in computer science enrolments from 2001 highs—from 12,510 to 5,817. The rest of the provinces are down by 30 to 40 per cent
But the root of the problem is not at the university level. It’s at the secondary and even at the primary level. The problem lies in attracting interest in the STEM areas—science, technology, engineering and mathematics. That pipeline needs to be bigger and better than it is.
With other labour shortages, an economic downturn usually makes the problem go away. The IT talent gap is very different. It seems to be recession-proof. It is larger than the ups and downs of any hiring or economic cycle. And it is international in scope. All we have to do is look to the States to see what I mean. The American economy is wrestling with a weak housing market and record oil prices, yet demand for IT workers is on the rise in a number of key areas. The situation is forcing employers into serious competition for talent.
So what is Canada putting at risk as this talent gap widens?
The first thing we’re putting at risk is our innovative capacity. Canada’s ICT sector represents 32,000 firms, generates over half a million jobs (572,107) and $149 billion in revenue. Human capital is the deepest source of our innovative capacity. Our IT workers generate knowledge and apply valuable hands-on capabilities.
The second thing we’re risking is both short- and long-term economic growth. Failing to take measures to increase the supply of IT workers will cost us dearly. According to the Conference Board of Canada, every single IT job that goes unfilled costs the economy on average over $119,000 ($119.335). The Conference Board calculates it costs the Canadian economy on average just over $119,000 ($119,335) for every single IT job that goes unfilled.
Third, we are risking losing the productivity race. Skilled IT workers are crucial to our national productivity goals—workers who can adapt quickly to changing circumstances, workers who achieve breakthroughs and improvements in products and processes, and workers who can help make entire companies more effective and efficient. For Canada, a 1-per-cent improvement in our productivity performance would increase our standard of living by $14,000 per person.
Large, advanced metropolitan economies have the most to lose. This is especially true for the six stars in our national technological universe: Montreal and Ottawa; Toronto and Kitchener-Waterloo; Calgary and Vancouver. Each city will have different challenges, but the shortages add up to a significant problem for all.
Let me give you one Toronto example. Some of the best companies in the financial-services sector here in the city have long realized how important IT is as a strategic enabler. These days, there is plenty going on in IT. In insurance alone, for example, there are several trends making IT a growth area. For example, there has been a real growth in affinity relationships, where insurers package their services under big brand names such as retailers, and need to provide a range of front-office systems to partners. The IT skills gap will affect them all.
The evidence of just how serious this issue is for Canadian companies is becoming clear. As part of our focus on the IT skills shortage, Bell commissioned the Conference Board to continue their related research into some of Canada’s largest enterprises, representing a cross-section of economic activity in this country. CN, the Bank of Montreal, Nortel, Pratt & Whitney Canada, Canadian Tire and Hydro-Québec are just a few.
A lot of that research is confirmation of what we were both seeing and experiencing. The evidence from retail to financial services to aerospace to hydroelectric power all points in one direction: information and communications technologies are not just about e-mails and billing systems; they have become strategic enablers. They help companies define and enhance value for customers.
That’s why our IT labour shortage is such a challenge.
Canada is not alone facing this problem. The IT worker shortage is an international phenomenon. A study published recently in the U.K. showed that 90 per cent of 14 and 15 year-olds know little or nothing about engineering or technology careers. Engineering, in fact, fails to make the top-10 career choices, ranking behind a professional sports career and even hotel management.
Good news for Manchester United and The Savoy, bad news for Microsoft and Hewlett Packard!
This is the same generation in Europe and especially in North America who can point and click virtually out of the womb. They “SMS” half an hour after they have learned their ABCs. They are enthusiastic participants in Facebook by seven or eight years old and carry at least half a dozen portable digital devices on them at all times. They are on the Net early and often. It reminds me of the New Yorker cartoon where two worried parents tell their five-year old, “It’s important that you try very, very hard to remember where you electronically transferred Mommy and Daddy’s assets.”
Young people really are voracious consumers of technology. Bell’s focus group studies show that young people are also creators. On weekends, many work on building Web sites. Others put together wireless SMS networks between large numbers of friends. Most young people in fact have an instinctive feel for technology. The problem is that they show little desire to pursue a career in the industry that creates so much of their world. It’s a Canadian problem, an American problem, and a European problem.
Business and government decision makers in a range of countries are taking notice. They are also taking action. In the United Kingdom, a not-for-profit, employer-led organization called “e-skills UK” is bringing together employers, educators and government to address together the technology-related challenges no one party can solve on its own. Its mission is very simple: to ensure the U.K. has the skills it needs to compete in the global economy. It executes its mission by focusing on the key players in this challenge—the elementary and secondary schools, universities and colleges, and employers and enterprises of all sizes.
The United States has acted with determination to protect its advantage in information technology by launching a 21st century work force initiative that targets the ICT skills gap. The American administration has also established the Office of Workforce Investment that provides leadership, guidance and technical assistance to youth and adults. Several important research and industry organizations have also turned their attention to this increasingly serious issue.
The IT talent gap issue has even caught the attention of the presidential contenders Senators McCain and Obama. Each has outlined plans to increase work force development funding and information technology job retraining. Yes, it IS a presidential election year, but it’s good to know some things can command bi-partisan support in the US!
There are two possible answers to the IT skills crisis for Canadian enterprise. First, they could move their IT needs beyond our shores. Second, we can invest in our people and our future here in Canada. It’s a choice between moving out or stepping up.
The first solution—for Canadian enterprise to “offshore” their IT needs—has been made possible by communication channels and collaboration, but seriously, I ask you, ‘Is this any kind of viable medium or long-term solution?”
Let’s take the example of a CIO. He could have his data centre here but outsource the management to a group located in Brazil while the call centre applications could be in India or the Philippines. I guarantee that we will see a lot more of that soon if we don’t act now.
Undeniably, the “Leave Canada” solution comes at a very high price: the loss of Canada’s global competitiveness; a de-skilling of our work force; and permanent foreclosure on thousands of high-paying jobs. When you consider that today the average IT worker earns over $56,000—45-per-cent more than the average earning for all workers in Canada—and ICT salaries are around $85,000, you begin to get the idea of what we stand to lose in terms of individual careers and work force development.
What kind of labour pool do Canadian enterprises find when they leave Canada? I will give you a hint. Consider that in 2004 India awarded 139,000 undergraduate degrees in engineering, computer science and information technology. China awarded 361,270. The US: 137,437. Canada: 28,542. These numbers represent a tremendous offshore challenge for the U.S. and Canada.
Faced with all this evidence, the question I asked myself one year ago was, “Does Canadian enterprise have what it takes to join together and rise to the challenge?”
The answer of Canadian enterprise was a resounding “YES.”
YES to collaboration to confront this great human capital challenge.
YES to a national co-ordinated effort.
YES to securing the future human capital capacity that professional IT workers represent.
That positive response has taken a specific form and purpose. With Bell Canada taking the lead, we established The Canadian Coalition for Tomorrow’s IT Skills. It is a national coalition of Canadian partners working towards finding solutions. Our name reflects our overall goal: securing Canada’s future pipeline for professional, high-quality IT talent. The coalition’s success will be determined by how well Canada is able to turn the tide of the professional IT shortage, and reverse the flow of outsourcing of these important, high-paying jobs beyond our borders.
Of course, the offshore labour option will remain strategic options at the enterprise level. But this coalition believes we also have the resources and the capacity to confront and overcome this shortage here at home.
The coalition’s goals are something that all Canadians can share. The coalition’s success will be something from which all Canadians will benefit.
The early success of the coalition has been beyond our greatest expectations. The enthusiasm for its work comes from every corner of Canadian enterprise.
This new national coalition focuses on three major areas. One: raising the profile of IT and IT career choices among young people, with a specific goal to increase enrolments in IT-related university programs. Two: generating public awareness of the importance of IT to Canada, and the outstanding contribution information technology makes to our prosperity and our competitiveness as a nation. Three: encouraging government immigration policies that answer the present and future needs of Canadian enterprise.
Some of Canada’s largest and most dynamic enterprises have joined the coalition. I mentioned some of them earlier—CGI, the Bank of Montreal, and CN. Rogers Communications, Nortel Networks and IBM Canada are also on board. Smaller, niche companies on the technological front line like Richmond Hill’s Computer Talk are also represented. Some of us are partners, others are market rivals. But everybody knows that this is a serious problem that demands a single, coherent and effective response. In fact, the coalition is now over 60 companies strong and represents some of the leaders in their sectors. Universities and associations have also joined the coalition to take up this challenge.
The coalition’s strategy rests on several major initiatives. The foundation of our work began with studies and research. If we can measure it, we can improve it. With our partners at the Conference Board of Canada, we have sponsored the first major study of its kind in the field called “Securing Our Future.” A second phase of the research will involve a national dialogue with 1,000 grade nine and 10 students regarding their perspectives on IT careers, in-person interviews, telephone interviews and surveys. The simple fact is that to keep competitive in STEM—science, technology, engineering and mathematics—we need to start early. That doesn’t mean six year olds will all have mandatory Blackberry training, but it does mean that we need to focus on kids as they begin to make choices.
The Conference Board is also working on three models of excellence that will target the problem systematically: Model One—Attracting and Retaining Immigrants; Model Two—Integrating Internationally Educated Professionals into the Workplace; and Model Three—Developing Career Paths for Youth. All three are needed in confronting this challenge.
The coalition also focuses on making our case with governments. As with any national challenge, public policy can provide the essential framework—the stimulus and the strategic direction. That’s especially true for the IT talent gap as it intersects such government responsibilities as immigration, human resources, education, economic development and industry.
A third major group of initiatives focus on mounting media relations campaigns, Internet-intensive projects and special television broadcast and webcast programming to create awareness, encourage action and promote ICT careers among the relevant key target audiences.
That’s a lot, but it’s only the beginning. Successful change also demands a hands-on, grass-roots approach. That’s why we are mobilizing the employees of coalition members to fan out across the country’s schools and talk about the exciting possibilities of a career in information and communications technology. We are developing a wide range of relevant materials dealing with everything from the world of innovation to job and career path information. These coalition ambassadors will be matched with local schools and classrooms and just talking about ICT, their personal career experience and answering questions—simple but effective.
We are also opening up our companies to students so they can see our R&D and high-tech facilities. There, they will get an eye-witness account of the many vital roles that information and communications technology professionals play in the 21st century corporation. We are also actively exploring developing an ICT internship program as well.
The coalition is also proposing a remarkable new initiative: opening the corporate labs of coalition members to IT students on nights and weekends. That goes for IT students in high schools as well as universities and colleges. If you have any experience with companies you know this is like a bank opening up its vault!
The Lab Sharing Program offers facilities and resources not normally available to IT students. High schools and universities often have a hard time keeping up with the latest in technology. It changes quickly, and both funding and teaching expertise are frequently in short supply. Coalition members are stepping up to remove those obstacles standing in front of a potential IT career path.
These initiatives represent an impressive measure of the coalition commitment to answering this national human capital challenge.
The coalition will succeed when we see a few things happen: increases in university enrolments in ICT-related programs; increases in foreign ICT students graduating and working in Canada; increases in ICT-graduate immigrants working in the field in Canada, and increases in the number of filled ICT positions. We are also measuring ourselves on increased positive perception of young people regarding ICT careers.
These are ambitious goals, but this coalition is putting them within our reach.
Friends, as I hope I have shown, the IT talent gap is today Canada’s greatest human capital challenge. That challenge demands something of all of us.
From enterprises, it demands leadership, collaboration and action.
From governments, it calls for policies that strategically align with the demands of a 21st century economy—from education to immigration.
From IT professionals, this challenge demands you to do your part to get involved, to inspire and to motivate.
I believe passionately in this cause because I believe that securing Canada’s economic future is worth fighting for. It is a tough fight and it will be a long fight. Judging from the response and the growth of the coalition, Canadian enterprise is up to the challenge, answering with determination and a belief in our desire to change things for the better.
To me, the coalition’s excellent beginnings show that Canadians can come together united in service not just to our individual companies, but to the common good. When we really hit our stride, and we will, there will be no stopping us. We won’t just close that IT talent gap. We will allow our country to excel in the global economy and make sure Canada’s best years are still ahead of us.
Let me leave you with a thought. When the Empire Club of Canada was being born over a century ago, in 1903, the young Dominion of Canada was facing a great human capital challenge of its own: how was it going to take advantage of the new technology of what historians call the Second Industrial Revolution? The institutions and enterprises of Ontario and Quebec needed to educate, train and deploy a remarkable number of engineers to take full advantage of the surge of technological developments in heavy industry—aluminium, hydroelectricity and electro-chemical processes. They rose to the challenge and built some of the world’s greatest companies in those sectors.
One hundred years later, we are in the middle of another technological revolution. Today, it’s not heavy industry but the knowledge/information economy that is calling us. Today, it is IT workers and their skills taking centre stage. Canada’s IT future will depend on two things: leading-edge technology and the people who can transform that technology into strategic advantage—at the enterprise level and at the national level.
Meeting that challenge is our debt to the future. It is also the only way we can turn Canada’s greatest human capital challenge into a human capital advantage. Thank you.
The appreciation of the meeting was expressed by Tim Reid, Director, Business Development, ZED Financial Partners, and Director, The Empire Club of Canada.