Canada's Small and Medium Enterprises Struggle to Identify the Skills and Talent Needed to Recover and Grow, New Report Shows

TORONTO, June 17, 2021 /CNW/ - Small and medium sized enterprises (SMEs) are drivers of the Canadian economy, accounting for nearly 70 percent of private sector jobs. We know they have been hit hard by the pandemic. Seventy percent of SME owners have taken on debt; many have experienced a 20 percent or greater decline in their revenue stream with 70 percent experiencing declines in revenue of 30 percent or more and many have closed entirely. But, in spite of massive layoffs, new research shows talent and skills shortages continue and training and upskilling is more important than ever. The report, Supporting Entrepreneurship and SMEs: A Post Pandemic Skills and Training Agenda, provides results of a national survey on the talent and skills challenges SMEs face as part of the recovery.  Key findings show:

• Even pre-COVID-19, 40% of SMEs identified skills shortages as a major competitive challenge.
• Thirty-seven percent of respondents indicated that a shortage of skilled workers has affected their business.
• Thirty-seven percent indicated the increased labour costs have affected their business.
• More than one quarter (27%) indicated the introduction of new organizational practices due to the pandemic affected their business.
• In spite of the devastating economic impact of COVID-19, nearly 50 percent of survey respondents agreed or strongly agreed that opportunities have been created by the pandemic (e-commerce, and expanded talent pool made available by the shift to remote work).  
• While many firms indicate an interest in seeking out diverse individuals (e.g., Indigenous or racialized people) as a way to find previously untapped sources of skilled talent, very few indicated having concrete plans or the capacity to do so.

Report recommendations for the way forward: 

This report confirms that a multidimensional strategy that brings stakeholders together is needed to improve SMEs access to the skills and workers they need to thrive post-COVID-19. Report authors offer recommendations designed to help reduce the skills gaps and labour shortages faced by SMEs while also building a more equitable post-pandemic world. Here are some of the recommendations: 

• Improved human resources strategies and practices:
• Most SMEs can't afford dedicated human resources staff, or those they have, often lack the capacity and expertise needed to balance competing demands of supporting recruitment, advancing upskilling and improving diversity and inclusion. There is an opportunity to leverage shared resources to curate training opportunities, build capacity for advanced human resources and share best practices through networks, which could be supported and co-ordinated by business organizations and industry associations.
• Since SMEs find it difficult to find time for their employees to engage in training and upskilling, opportunities for support organizations and governments to support and incentivize investments in training (both in time and money) need to be explored.
• Diversify the talent pool;
• SMEs that understand the value of diversity and inclusion and employ appropriate practices can significantly widen and deepen their talent pool. Since SMEs' often do not have the human resources expertise needed to proactively access and recruit diverse candidates successfully, business support organizations could support them in building the systems, policies, practices and tools needed to improve their EDI practices. There is also an opportunity to develop shared platforms, tools, and training resources tailored to their situations required to improve their EDI practices.
• Target setting, benchmarking and assessing impact;
• The adage "what gets measured, gets done" applies. Policymakers need more disaggregated data to assess the experiences of different types of SMEs and the impact of investments in general, and particularly on businesses owned by women and other under-represented groups. Recognizing the needs of early-stage start-ups and "solopreneurs" is also important as they fuel SME growth.
• Supports for SMEs should consider broader impacts on communities and social goals. This could encourage firms to have concrete plans and targets in place that address training and development as well as diversity and inclusion is critically important. For example, governments and large organizations can use tools like social procurement to incentivize SMEs in their supply chain to adopt more progressive practices.
• Governments need to prioritize understanding and addressing the needs of SMEs as part of the skills agenda. Supporting research to provide additional understanding of SME needs and capacity is important, as is building capacity.

This research report builds on a longstanding research project conducted by Public Policy Forum (PPF) and the Diversity Institute and supported by the Future Skills Centre about the future of work, and is part of the research series, Skills for the Post Pandemic World which tackles key questions facing policymakers, employers, training providers and workers as they collectively turn to face the post-pandemic future of skills, training and retraining. 

Quotes:

"Skills will need to be at the heart of our economic recovery. Although SMEs play a vital role in communities across Canada, many of them face barriers that prevent them from developing a skill strategy for their workforce. They often lack the time or money to plan, access and train the workers they need, and they are disproportionately led by people from vulnerable and marginalized populations. Addressing all of these challenges must be a collective effort between businesses, industry associations, community organizations, governments and SMEs so that together we can foster the kind of reskilling and upskilling that will usher in shared prosperity. That will be a 'win-win-win' for business, workers and equity."
-Pedro Barata, Executive Director, Future Skills Centre  

"Small businesses are the backbone of our economy and have been hardest hit by the COVID-19 crisis. Access to skills, talent, and labour are long-standing priorities for businesses and employers, and have been exacerbated by the crisis. Supporting entrepreneurs and small businesses through training, upskilling, and diversifying access to talent will be critical to our long-term recovery. As we begin to reopen our economy, this report from the Diversity Institute, Public Policy Forum, and Ontario Chamber of Commerce draws on preliminary survey findings and focus groups with Ontario and Quebec businesses, providing timely data that will help pave a path forward,"
– Rocco Rossi, President and CEO, Ontario Chamber of Commerce

"Supporting SMEs is critical if Canada is to compete globally and recover in a post-pandemic economy.  Entrepreneurs and SMEs need programs and support tailored to their specific needs. Given that these needs vary widely across sectors and firm size, multiple forms of support are needed. This research is especially concerning as negative impacts for smaller businesses translate into disproportionately negative impacts for women and equity-seeking groups. All of this data tells us clearly that applying a diversity lens will be critical to ensuring skills, training and recruitment practices are improved for SMEs."
-Wendy Cukier, director of Ryerson University's Diversity Institute and academic research lead of the Future Skills Centre

About the Future Skills Centre
The Future Skills Centre (FSC) is a forward-thinking centre for research and collaboration dedicated to preparing Canadians for employment success. We believe Canadians should feel confident about the skills they have to succeed in a changing workforce. As a pan-Canadian community, we are collaborating to rigorously identify, test, measure, and share innovative approaches to assessing and developing the skills Canadians need to thrive in the days and years ahead. The Future Skills Centre was founded by a consortium whose members are Ryerson University, Blueprint ADE, and The Conference Board of Canada, and is funded by the Government of Canada's Future Skills program.

About the Diversity Institute at Ryerson University's Ted Rogers School of Management
The Diversity Institute conducts and coordinates multi-disciplinary, multi-stakeholder research to create practical strategies to advance skills and employment opportunities for women, racialized people, newcomers, Indigenous people, persons living with disabilities and others. The Diversity Institute is home to unique programs such as the Advanced Digital and Professional Training Program (ADaPT) as well as the Women Entrepreneurship Knowledge Hub aimed at building an inclusive innovation ecosystem. 

About the Public Policy Forum
Good Policy. Better Canada. The Public Policy Forum builds bridges among diverse participants in the policy-making process and gives them a platform to examine issues, offer new perspectives and feed fresh ideas into critical policy discussions. We believe good policy is critical to making a better Canada—a country that's cohesive, prosperous and secure. We contribute by:
- Conducting research on critical issues
- Convening candid dialogues on research subjects
- Recognizing exceptional leaders
PPF is an independent, non-partisan charity whose members are a diverse group of private, public and non- profit organizations.

About the Ontario Chamber of Commerce
For more than a century, the Ontario Chamber of Commerce (OCC) has been the independent, non-partisan, indispensable partner of Ontario business. The OCC's mission is to support economic growth in Ontario by defending business priorities at Queen's Park on behalf of its network's diverse 60,000 members.

SOURCE Diversity Institute at Ryerson University

Kathleen Powderley, 416-803-5597,[email protected]

Related Links

https://www.ryerson.ca/diversity/