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By Joel Kranc

The labour market is changing globally and in Canada. How can HR adapt to it and will our education system support it?

HR professionals are bombarded with information on a daily basis. New regulations, employee satisfaction reports, changes in management direction and shifts in corporate thinking can be overwhelming enough for one person to take in and incorporate into their HR duties.

But, the economy – a large and looming topic in its own right – must be part of HR’s thinking when looking at internal labour issues and the general bottom-line needs of the company being served.

In a keynote address at HRPA 2016 in the Metro Toronto Convention Centre, Benjamin Tal, deputy chief economist with CIBC World Markets, discussed the current world economic situation, how it links to HR professionals and why they should care.

“This is a global economic situation that is in unchartered territory,” said Tal. “We have to understand where this economy is going because that will impact the labour market in Canada and globally in a very significant way.” Some of the problems facing the world economy range from a slowing Chinese economy, to a faltering Euro, to the stagnant Japanese economy and, of course, the slowing oil and Canadian economic sectors.

The global economy is in the midst of a transfer of wealth from producing countries to consuming countries, something Tal says is a positive thing in world economics. A slow but still growing manufacturing sector in the U.S. and the growth of savvy and motivated consumers (such as those in China) is fueling this growth and will continue to help grow economic prospects for the U.S. Commodities will also make a comeback, according to Tal – not at the level we have seen before, but at a more balanced level.

In Canada, there is a tale of two economies. The first is the oil sector, which will continue to struggle for some time and the other is the service sector, which will grow.

For HR professionals, there are a few issues that have direct correlation to our community. With a low dollar and a growing U.S. economy, the Canadian economy is somewhat struggling. Our manufacturing capacity is low and any capacity growth will be “invisible.”

“Those companies will be creating solutions as opposed to goods,” said Tal. “The new capacity will pose major challenges for banks and for HR professionals.” Canada is a service-oriented country. Although Statistics Canada does not measure it per-se, 45 per cent of Canada’s economy is based in the service sector.

He stressed that as an economy (and as HR professionals), Canadians must support this growth, which will be high-tech and value added.

“We have to start re-thinking about how we are hiring, retaining jobs but define what the job is,” said Tal.

One of the major issues in the economy is in our educational system and the fact that Canadians, in general, do not have the skill sets the market is looking for, according to Tal.

“We must break the negative stigma associated with colleges,” he said. “[Universities and colleges must work together to] achieve a more optimal labour market.”

There is a rising proportion of college students who are university graduates leading to a sub-optimal way to get an education. Combining forces and having joint programs, the gap of education and the labour market can be closed, says Tal.

“Young kids are struggling and they need help. The help is a better, more effective education system,” he said.”

Overall, divergent world economies are having different effects depending on the regions being addressed. While Canada was able to weather the economic storm of the Great Recession, our U.S. cousins are now faring better in a post-recovery world. HR is struggling with these issues as they directly affect how our labour market adapts to economic linchpins and how best to train and educate those workers.

Action is what is required, says Tal, rather than further study, and bridging the education and economic gaps will better aid HR’s efforts in dealing with the labour market as well as navigating the uncharted territory of the current world economic environment.

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