A skills gap is costing the Ontario economy billions of dollars a year, as companies are having difficulty finding workers with the right skill sets, the Conference Board of Canada stated in a new report.
According to the report, the skills gap is costing the economy as much as $24.3 billion in economic activity and $3.7 billion in provincial tax revenues annually.
The province is also losing out because of skills mismatches, or in other words, people employed in jobs that don’t fully utilize their skills and training, the report said. The board estimates that the mismatches cost the province up to $4.1 billion in foregone gross domestic product and $627 million in provincial tax revenues each year.
“This is money that could provide substantial economic and social benefits to Ontarians,” said Michael Bloom, vice president of organizational effectiveness and learning with the Conference Board of Canada, in a release.
“Closing the skills gap could help the province reduce public debt or invest in much needed infrastructure improvements,” Bloom added.
The issue is affecting sectors that account for almost 40 percent of employment in Ontario, which include manufacturing, health care, professional, scientific, and technical services, as well as financial industries.
A survey of over 1,500 employers by the board found that employers most need post-secondary graduates in science, engineering, and technology, as well as business and finance. Most sought are those with two- or three-year college diplomas (57 percent), followed by those with four-year degrees (44 percent), and those in the trades (41 percent).
The Conference Board suggests a number of actions to address the issue:
- Employers can increase their training and development investments and provide more experiential learning opportunities—such as apprenticeships, co-op placements, and paid internships.
- Educators can better align programs to the needs of the economy.
Governments can allocate additional resources for experiential learning opportunities, as well as collect and share better labour market information.
- Students can match their own education and training planning to the realities of the labour market.