C.D. Howe Institute
The nature of labour demand is changing. As traditional manufacturing jobs gravitate towards emerging economic powers like China, India and Brazil, countries like Canada are being forced to diversify their options.
Despite this global trend, the Harper government thinks it has found the golden goose in the natural resources sector; they seem determined to put all of our economic eggs in that one basket, particularly Alberta’s Tar Sands. There are multiple reasons why this is a short-sighted approach.
While there will always be a need for natural resources, there are huge risks and lost opportunities in focusing solely on the resource export market. Plus, as the Knowledge Economy starts to kick in to high gear, there will be an increased demand for highly trained labour that has the capacity to innovate. Raw materials, yes, but it’s product, process and new markets that industry is focusing on now.
Despite the strong evidence that Canada needs more training (and not just up-front training, but life-long learning), we are actually facing a national training deficit. We are also failing to harness the full potential of new Canadians, immigrants bringing a wealth of knowledge and experience (but not Canadian experience) to our country. Ontario is starting to tackle this problem head-on, but is there a broader opportunity here to reduce Canada’s training poverty and employ some of the new raw talent coming to our country to do so?
Human capital formation, through education, training and skills development, is recognized as a primary determinant of worker productivity and earnings as well as firm productivity – and, therefore, broader economic growth.
Here’s the reality – Canada’s economic performance has fallen behind many of our major competitors. Between 2000 and 2005, for example, the rate of Canada’s productivity growth was only 25% that of our major trading partner, the US. One of the major reasons for this is a lack of investment in skills upgrades and training on the part of Canadian firms.
Statistics Canada tells us that “investment in human capital, that is, in education and skills training, is three times as important to economic growth as investment in physical capital, such as machinery and equipment. This implies that investments in raising the average level of skill could yield large economic returns.”
So – if we’re falling behind and there’s a correlation between this trend and training levels, why aren’t we training more?
It all comes down to the way we look at work and how we understand motivation. Unfortunately, our views on labour have not kept pace with the changes in technology and the solidification of the global economy; until recently, they haven’t needed to. Businesses are still largely understood through the industrial, vertically integrated top-down model; employers give money and resource access to employees, who are then responsible for turning a profit for their employers. Training is an initial investment in labour – not a continuing one. Once training is given, it’s up to the employees to deliver; they are incented to do so through the carrot and stick
What we aren’t noticing is that the carrot-and-stick approach informs the actions of employers, too. Training, benefits programs, etc. are seen through the lens of direct cost/benefit analysis rather than the aggregate impact on business. As there hasn’t been much research clearly demonstrating value for money, training programs haven’t been seen as a particularly useful investment.
This is particularly true for small business owners. For them, the negatives associated with training seem to outweigh the positives:
- Training employees can make them more attractive to better-resourced competitors; you could very well be serving as a grooming school for other businesses.
- Training costs money; it also takes your staff away from productive time which is, of course, where your profit comes from.
- Employees are employees, not partners; if they are bringing in new methodologies and ideas and push for their implementation, it’s more hassle than the training is worth.
It’s a bit of a tragedy of the commons; a bigger investment would have a greater pay-off, if everyone did it. Insufficient positive motivation makes it harder to get excited. The stress of managing a business and the urge to be firmly in the driver’s street of one’s own enterprise leads to a focus on keeping staff in line rather than supporting them. Salaries are seen as expenses rather than investments; lower pay equals higher profits. The sad thing is, the reality is the exact opposite of this – employers who pay less see higher turnover and face higher costs of credit.
If It Ain’t Broke…
You can’t find the best solution if you haven’t identified the correct problem. In the case of labour, the problem we have identified is motivation – managers are constantly struggling to find new ways to get employees to do their work better, more efficiently, more creatively. Some training gets thrown at them, but to a large degree we rely on the traditional tools of the trade:
- bonuses, promotions, project control
- disciplinary measures, demotions, firing
In short, we employ carrots and sticks to get workers to do what we want them to. This more-or-less worked in the past for repetitive tasks, manual labour, etc. For the kinds of labour we rely on in the Knowledge Economy, though, the traditional approaches can actually be detrimental. We’re solving the wrong problem.
When we make work about something gained or something lost, we disengage people from the process of work itself. It becomes about the reward, not the procedure; according to Occam’s Razor, people will find the easiest and quickest way to achieve their goal. The fastest, most aggressive solutions aren’t necessarily the wisest. The ends don’t always justify the means. Plus, when people don’t enjoy their jobs, you don’t get their best work. They’re also more likely to face health problems.
This is exactly the wrong approach for nurturing the creative, out-of-the-box solutions that will define success in the Knowledge Economy.
Creativity, be it in problem-solving or innovation, is not a fixed process. While structure certainly helps channel the cognitive process, too much overt control and exerted pressure stifles it. This point cannot be overstated; all the traditional tools in an employer’s box to make a sale, close a deal or complete a project are counterproductive to the process of innovation. The goal of the employer in the Knowledge Economy isn’t to tighten an employee’s focus on a destination, but make sure they take in the sights along the way.
Ontario’s Premier, Dalton McGuinty, has suggested “it doesn’t matter where you come from, but what you find along the way.” He was referring to the diversity of Ontario’s population, but the same holds equally true for ideas.
This, then, is where we come back to training. We need to re-brand training not as a product or a piece of paper to hang on a wall, but as a process – an ongoing process that the best employers will nurture and the best tools will facilitate.
Given the challenges employers face in justifying the skills upgrades mentioned above, how are we to convince them that such training is a worthwhile expense? Once again, we’re identifying the wrong problem; the solution isn’t to carrot-and-stick employers into paying for training, but to build value into the process of creating and harnessing training opportunities. The way to do this is to make training free and collaborative.
Taking Training Online
No, I’m not talking about throwing limitless sums at publicly funded post-secondary education, nor publicly-funded upgrade courses. There’s no need for this – all the resources one could possible want, ranging from sales techniques to the latest innovations in clean energy technology to best practices in office configuration are all available online already – the trick is to coordinate these resources into an easily-accessible, open-source platform that everyone can invest in and receive benefit from.
What I envision is a new hybrid online framework that combines the best elements of existing resources like Wikipedia and Charity Village with the simple, aesthetic veneer of an Apple product.
This system (we’ll call it Trainingpedia for now, but feel free to suggest cooler names in the comments section below) would exist like a three-dimensional map online; a legend would give a user access to sub-strata more relevant to their niche area (a field of study, communications best practices, even tips on managing the work/life balance). A search engine would help bring users directly to the topics they wanted, but with side-bar links on related material. The whole site would be designed, like a map, to encourage exploration and, like Wikipedia, for contribution. It could even be multi-lingual, as Wikipedia is and include a translation function.
Picture the resource power of every single employer and employee with access to a computer wired into one system. As has been proven the case through the Wikipedia example, a broadly crowd-sourced engine like this would produce accurate, beta-tested and rapidly-updated best practices, new insights and opinions; all the benefits of paid training without the hassle of paying for it. Think what this could do for market research.
Yes, there’s a risk that a Trainingpedia site could become an aggregate for complaints; that’s not necessarily a bad thing. Complaints would become one section of a larger digital geography; if there was more content that was positive and engaging, it would get the focus.
For employers to truly gain the individual benefits of such a system, they would have to build in “research time” into the schedules of their employees. Considering how many people spend part of their work day trolling the internet anyway, doing so in an encouraged fashion wouldn’t impede productivity, but increase innovation potential.
Would a Trainingpedia site take business (and profit) away from training service providers?
This is why ardent pro-Capitalists should love the Trainingpedia model – it has creative destruction written all over it. As generalized training services, best practices, peer-support groups, etc. get formed online, companies that get paid for training services or products will have to think outside the box, finding targeted, boutique and specialized services to sell. Having access to Trainingpedia will make this a much easier job for them; they can even advertise themselves there by posting videos like Hill & Knowlton’s Billy Wants a Dog or contribute to various entries, like LinkedIn group discussions. Yes, their for-sale product will eventually end up in the free system, but that’s fine; these firms will be in a continuous process of exploring new training, educating and employee-support options to offer. Remember, it’s product, process and new markets that business is going to be looking for.
Innovative firms can even advertise competitions for new ideas and processes, imitating the success of GoldCorp.
Moving Forward Together
The traditional model of society (competing for the best grade, the highest salary, the corner office) may have gotten us this far, but to succeed in the Knowledge Economy, we need something a bit more. Motivation must now come from within – not without. It’s through feeling inspired by what others are doing or pieces we pick up along the way that we will come to challenge ourselves to do better.
Success in the Knowledge Economy, then, is like building a taller pyramid; the more effort we put in collaboratively at the base, the higher we’ll all be able to reach.