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Labour Crisis In Manufacturing Sector

August 29 2008 - A Conference Board study has identified an impending labour crisis in Canada's manufacturing sector.

Apart from competition from cheap labour in developing countries, rapid technological change and a strong Canadian dollar, Canadian manufacturers also have some major HR issues to address, including:

  • the impact of 'baby boomer' retirements
  • the relative unattractiveness of the sector for young workers, and
  • the constant need to keep up with new skill requirements

The report, Key Economic and Labour Force Issues Facing Canada's Manufacturing Sector indicates a likely shift in the future from final assembly work to manufacturing specialized components and providing products and services such as logistics and supply-chain management services.

According to Douglas Watt, Associate Director, Organizational Learning and Development:

"This shift in production means the skill requirements for manufacturing employees will continue to rise, and firms will increasingly compete for skilled workers with other sectors of the economy. At present, the manufacturing sector needs to do more to take full advantage of its current workforce through training and learning programs, and do more to successfully recruit younger workers."

The report advises employers to improve on the current skills of Canada's two million manufacturing workers by tapping into education and training programs. It also says that manufacturers need to retain their aging workers for longer by being more flexible in scheduling work processes.

The report also recommends that the manufacturing sector should improve its image as a rewarding career option for young workers and women.

The study was conducted for the Government of Canada's Sector Council Program. Its economic analysis showed that the manufacturing sector's share of Canadian GDP - which had grown strongly during the 1990s - fell from 18.4% in 2000 to 15.2% in 2007. About 300,000 manufacturing jobs have disappeared since the beginning of this decade.

Michael Burt, Associate Director, Canadian Industrial Outlook said:

"There is no doubt that some segments are facing structural challenges-such as increased import competition-which have been further aggravated by the slowdown in the U.S. economy. However, all is not doom and gloom in the sector.

"Some segments of manufacturing have garnered gains in employment over the course of this decade. The story is even rosier when one looks at production, where nine of the 21 industries have experienced rising production over the course of this decade, and total production is down only slightly. What is surprising about the sector is not that it has struggled in recent years, but that it has fared so well under these circumstances."

Food manufacturing, fabricated metal products and machinery have increased employment and production but others have declined, including clothing and textiles, and paper products. Transportation equipment (including motor vehicle and aerospace) fell modestly over the period.

Four innovative programs were identified as addressing the key HR issues facing manufacturing:

  • Wood Manufacturing Council's WoodLINKS program - a school-to-work transition and certification program, establishing partnerships between high schools and local manufacturers.
  • Textiles Human Resources Council's Skills and Learning Sites and Portal - a flexible, cost-effective learning infrastructure for Canadian textile manufacturers and their employees.
  • Canadian Plastics Sector Council's Virtual HR Department (VHRD) program - an online one-stop shop for human resources tools.
  • Apparel Human Resources Council's Management Competencies project - a structured step-by-step strategic planning and human resources development process.

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The HR Answer Book

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