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GLOBAL: Insight Bureau: "World economy: lifting the curtain on what worries the EIU about for 2008"

GLOBAL: The Insight Bureau: "World economy: lifting the curtain on what worries the EIU about for 2008". 3-page article by Robin Bew, Editorial Director and Chief Economist at the Economist Intelligence Unit, and Insight Bureau.

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back to index backGLOBALtalk December,  2014


Canada: 'Paid to learn': Facing skills shortage, manufacturers invest in training youth

Young people may be wrestling with a tough jobs market, but the news isn’t all glum: Some employers are experimenting with new ways to hire, train and invest in them.

A cluster of Canadian manufacturers has banded together to tap young workers – even if they have no experience – for highly skilled, specialized positions. The employers have been spurred into action by strong demand, a shortage of people entering skilled trades and looming retirements.

So, they are hiring first and training after, recruiting youth and paying them from the get-go while they get classroom and on-the-job training with the intent of keeping them in full-time, permanent jobs at the end of the six-month program. The first cohort of 16 people is now being trained as machinists in the Toronto area. In plans to be announced this week, the initiative will grow to 80 young workers by the end of next year, with expansion into other Ontario cities and other occupations.

Booming business is one reason Robert Sochaj, executive vice-president at aerospace parts maker Cyclone Manufacturing Inc., has signed on. Plus, tighter rules around the temporary foreign worker program are also adding an incentive to hire and train closer to home.

A few years ago, Cyclone used about 20 temporary foreign workers to fill some positions. Now, it’s almost impossible to get [government approval] for a machinist … so we need to train people internally,” Mr. Sochaj said.

It’s a long-term investment that many companies are unwilling to make. Employers have cut spending on workplace training by nearly 40 per cent in the past two decades, the Conference Board of Canada has noted, while the OECD has long urged Canada to boost efforts in skills training.

Companies in the consortium will spend $15,000 to $20,000 per trained youth to get them up to speed. New hires aren’t required to sign a guarantee that they’ll stay with the company, but the hope is that both employee and employer find a good match.

Together, the employers see an immediate need for 270 computer-numerical control (CNC) machinists” – workers who operate computer-driven machines, and estimate they’ll require more than 700 more over the next two years.

It’s been a difficult few years for young people in the jobs market. Canada’s youth employment rate – or the portion of youth holding jobs – has shown little improvement in recent years, with only about half of young people at work. Many are in school, but the share of young people in part-time positions who would prefer full time has stayed elevated since the recession. In fact, the portion of youths working in full-time jobs fell to a record low last month.

These are not unpaid internships. Wages typically start at between $12 and $15 an hour and pay starts at the beginning of training. Wages increase as their capabilities improve. Eventually, CNC machinists typically end up earning between $25 and $35 an hour.

The program recruits mostly unemployed, underemployed or disadvantaged youth in their twenties. The initiative, called the Ontario Manufacturing Learning Consortium, works with a training institute and comprises four industry associations in the aerospace, tooling and machining, nuclear and manufacturing sectors. The provincial government kicks in some funding under its Youth Skills Connections Program.

Industry has not taken the role that it must do if we’re going to bring about good training programs. Industry has to be more active” in defining what roles it needs and working more closely with schools to groom young people for work, says Rod Jones, the consortium’s program co-director.

Gregory Wood, 25, is one of the new hires. Before landing in the program, he was selling tools at Canadian Tire. He had taken three years of math and science at University of Toronto, but he didn’t have a clear long-term plan. Many of his friends are either underemployed, or unemployed – some can’t even find a part-time job.”

It’s a great opportunity to be paid to learn,” he says, adding he hopes to pursue a career in the field and to stay on at Cyclone, where he’s started.

On the clean, bright floor, he scrutinizes blueprints for an aluminum plate that will be turned into an airplane’s engine mount. It’s a little stressful,” he says of working with automated machines that cost up to $2.5-million. But he’s learned to go methodically and carefully through the steps. You can’t rush it.”

The program first screens for aptitude and attitude that indicate motivation and capacity for spacial and mathematical thinking. About 40 per cent of applicants were accepted (with two dropouts, the participation rate so far is 90 per cent).

The industry-led initiative is still not the norm in Canada, but the model is similar to long-standing approaches in places such as Germany which blend in-class and on-the-job training, with closer collaboration between employers and educational institutions.

It’s a model that labour market watchers such as Kevin Lynch, vice-chairman of Bank of Montreal, have argued that Canada should emulate.

The nature of work is changing all the time and technology is changing how you do it,” he said. But a greater joint effort between employers, students and schools with more co-op programs, apprenticeships and on-the-job training means everybody wins” with better-trained and more productive workers. Having a highly-skilled work force will be one of the competitive differentiators of countries in the future.”

A Catch-22 is that firms want work experience before they hire, but grads can’t get that experience to get hired, he said. But firms have to be willing to take on new workers. And it’s less the work experience they have when they arrive as much as how productive they can be over time for the company and for themselves.

Our biggest resource in the future is the kids that we’re graduating today. How we educate them, how we train them and give them their first work experiences is everybody’s gain, not just theirs, frankly – it’s a societal gain, it’s an economy gain.”

The 26-week course consists of three weeks in the classroom, where trainees get ready for the workplace by learning how to read blueprints and use of tools, and 23 weeks on the job, where they get hands-on training, working with the same machines, with supervision, that they’ll operate when they graduate. Employers can interview pre-qualified candidates, then hire those who are the best fit.

Manufacturing equipment can run at millions of dollars each, making it costly for many schools to purchase.

We shouldn’t be expecting schools to buy expensive equipment like this on which students can learn. Why couldn’t we find a way to have them learn in the workplace, on the equipment they’re actually going to be seeing? From an overall societal consideration, avoiding the cost of putting expensive equipment into learning organizations seems to make sense,” notes Mr. Jones, the consortium’s director.

Source: The Globe and Mail
- GAI




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