Why Canada Needs an Upskilling Strategy

We now have a model of upskilling through Palette Skills that demonstrates not only how upskilling can be done, but that it can be done in a wildly successful way for both workers and employers. By scaling what works and building an ecosystem of upskilling across Canada, we will not only help secure our role as an innovative and globally competitive country, we will create a path to building an inclusive knowledge economy that creates access and opportunities for all workers to participate.

There are signs of spring everywhere. And as Canadians emerge from another pandemic winter, there’s promising news. Canada’s economy has begun to recover to pre-pandemic levels across many sectors. In recent weeks, thousands of new jobs have been added to the market, with February’s figures showing unemployment falling to levels not seen since the pandemic began. The evident drop in unemployment has even filtered into Canadians’ career expectations, with a recent survey showing that 43% of Canadian workers considering changing jobs in 2022. Canadians are looking ahead, and they are ready to make a change. 

Despite these signs of strength and optimism, Canada cannot afford to be complacent. Recently, the Conference Board has warned that following disruption to supply chains, inflation remains a real threat, in addition to the impact of anticipated rate hikes on the economy. Despite the rapid growth of tech and engineering, there is a shortage of workers with the right skills for these occupations, with some estimating that nearly 60% of the Canadian workforce lacks training in new technologies. 

Zooming out, the immediate cost of this skill shortage is decreased productivity and high turnover, costing the country more than $25 billion in 2020 alone. Zooming in, the cost is more personal, with workers experiencing feelings of dislocation from their jobs, or suffering from burnout and stress. Over time, the potential cost is enormous, and could mean stunting the growth of our highest potential and fastest-growing knowledge sectors, including clean energy, information and communications technology (ICT), and even the growing digital agriculture sector. Here alone, observers warn we desperately need new strategies for training the next generation of agricultural workers. 

It’s clear that the path of recovery leads through a landscape of new challenges requiring energetic solutions, especially when it comes to Canada’s workforce. There is an opportunity to both accelerate and deepen our recovery by building the skills of Canadian workers, and getting both them—and the country—ready for the economy to come. We believe that preparing Canadians with the skills needed to succeed in Canada’s knowledge economy is an effective way to create sustainable and equitable opportunities for Canadian workers, while driving a recovery that benefits the broadest cross section of Canadian workers and companies. And there’s more good news: we are ready to act quickly. 

Why now is the time

The truth is there has never been a better time to focus on building skills and readying workers for entry into Canada’s knowledge economy. A quick look at some change points shows why we can and should act quickly. As the most challenging phase of the pandemic comes to a close, many employers are anticipating a phased return to the office, with many hybrid models here to stay. Meanwhile, many are transitioning to new jobs and sectors in search of an improved career path and quality of life. As well, underrepresented populations are building careers, with the federal government investing in programs to support a more inclusive workforce. Women were disproportionately affected by the COVID-19 pandemic, with some estimates showing that women’s workforce participation fell to just 55%. Many will be returning to the job market, with their numbers buttressed by the national childcare program announced in the last budget.  Finally, new government programs and grants are beginning to target training and skills development for new Canadians and other equity-seeking groups. 

Upskilling to address Canada’s skills gap

As policymakers, business leaders, and labor groups confront these challenges, there is consensus that Canada should be doing more to address the emerging skills shortages that exist in multiple sectors across the economy. Addressing these shortages is no simple feat, and will require a national strategy.

This might seem at odds with what we’ve been told about Canada’s competitive advantage. According to the OECD, the country has the most educated workforce among its member countries. But this simple ranking hides an important truth: in order to flourish in the new economy, we have to develop a more dynamic and lifelong approach to learning than we’ve been used to. This means adopting a national skill-building strategy that will transition thousands of Canadians into new careers in growing sectors of the economy. 

Emerging sectors like Canada’s low-carbon or clean energy economy remain hungry for new talent and skills. From environmental analysis to retrofitting homes and businesses with new technologies, the shift to a green economy will require a workforce with the right technical and professional skills to fuel its growth. At the same time, workers from traditional energy sectors remain an untapped talent pool that will be looking to begin new careers as their sectors pivot to greener and cleaner energy alternatives like hydrogen and biodiesel. 

The risks of not addressing the skills shortage in knowledge sectors like this are significant. Without well-trained and skilled people, companies will continue to lack the talent they need to drive growth and recovery, and Canada will continue to fall short of its potential in becoming the innovation powerhouse we know it can be. As a large number of Canadians age out of the workforce, it’s important to remember that immigration alone cannot fill the emerging talent gap and offset some of these consequences.

Part of our response must be to create a system of programs and pathways that get Canadians in the labor market with rewarding and high-value careers. An effective way to do this—and do this quickly—is by building demand-driven upskilling programs, such as those developed by Palette Skills.

Demand-driven upskilling 

So what is upskilling? Upskilling is not the same thing as training. Traditional training programs simply teach people a set of new skills, while upskilling takes a broader approach, one that sees the learner in the context of a lifelong career path. The goal is not simply learning new skills, but securing a job in a new career. While learning new “hard” skills is a core part of the upskilling journey, so too is building the so-called “soft” and professional skills that are required for a meaningful career path.

There is another critical component to the success of upskilling, and that is linking such programs to industry needs. If the goal of upskilling is to fill Canada’s skills gap, then upskilling has to be aligned with the demands of Canadian business

This approach already exists, and has been pioneered by us, Palette Skills—a national nonprofit committed to building industry-led and people-first upskilling. We are a leader in delivering rapid upskilling programs that transition workers into high-demand careers at some of Canada’s most innovative companies. 

Working in partnership with industry, governments, post-secondary institutions, and community groups, we run innovative upskilling programs in a number of different provinces, and the results are more than encouraging. Across programs, there is a 90% job placement rate, while 36% of our past participants are promoted within 18 months of completing the upskilling journey. Not only that, but analysis of our program participants has shown that 41% of our participants identified as women; 60% identified as racialized; and 46% identified as newcomers to Canada, demonstrating that we are tapping into diverse talent pools of individuals who often face systemic barriers to full, stable and high-paying employment.

It is an extraordinary result that is only possible because of the programs’ ecosystem-driven approach, where the “ecosystem” includes business, community groups and NGOs, as well as funders and industry partners. This kind of approach leverages all of these critical relationships, and orients them to one goal: helping companies find talent by addressing Canada’s skills gap.

And, it’s working: 150+ fast-growing ICT firms have partnered and/or hired candidates through the Palette Skills upskilling programs, with 44% of companies returning to help train the next cohorts. 

Ready to close the skills gap

People have been talking about closing the skills gap and adding talent to the knowledge economy for years. Palette Skills has built a model that demonstrates not only how that can be done, but also, that it can be done in a wildly successful way for both workers and employers. With our 100+ strategic partners across the country, we aim to scale and build an ecosystem of upskilling across Canada.

In doing so, we will not only help secure our role as an innovative and globally competitive country, we will create a path to building an inclusive knowledge economy that creates access and opportunities for all workers.

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