Transcript This is a demonstration - British Columbia Building

Mitigating Skill Shortage Risks for
Construction Companies
Brian Clewes, CEO
Industry Training Authority
May 25, 2006
1
Today’s Presentation
About the ITA
The story behind skills shortages
Training is a human resource strategy
Identify your key positions
Choosing what to bid on
Capitalizing on current labour pool
Expanding the labour pool
The role of productivity
Summary
2
About the ITA
Provincial crown agency, established in 2004
Responsible for governance, expansion and
improvement of BC’s industry training and
apprenticeship system
3
A New Direction for Industry Training in BC
The ITA is:
Aggressively tackling workforce development needs in BC
– Targeting increased trainee and employer participation
Facilitating a fundamental shift in BC’s industry training
system
– Giving industry the leadership role
Presenting significant opportunities for industry, employers
and apprentices
– More accessible and relevant training programs
– The right supply of skilled workers
4
Progress to Date
80+% increase in apprentices – to more than 26,500
30+% increase in employers offering sponsorship – to
more than 8,800
250% increase in youth participation – 3,000 students
now in high school programs
Many proposals from industry for new or revised
programs
Formation of three sector Industry Training
Organizations (ITOs) with three more to be established
this year
5
The Story Behind BC’s
Skills Squeeze and Escalating
Construction Costs
6
The Story Behind BC’s Skills Squeeze
Strong economy
– Record low unemployment
– Highest job growth in Canada
Aging workforce
Trades not a preferred career option among sufficient
youth
7
The 2010 Economy
Over the next 10 years:
1,000,000+ job openings in BC
but only
680,000 graduates
8
BC Leads the Way
Employment Growth
Jurisdiction
% Change
2001-2005
% Change
2004-2005
Canada
8.9
1.6
BC
14.4
3.5
Alberta
10.0
1.9
Ontario
8.4
1.4
Quebec
8.5
1.7
9
Construction Employment in BC
Expected to Peak at around 195,000 over the next couple of years
10
Retirees Will Out-Number New Entrants
900
800
700
Thousands
Age 15 to 24
Age 55-64
600
500
400
300
200
100
0
1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026
BC Stats P.E.O.P.L.E.25
11
The Result
Unprecedented growth in demand for skills
Skill shortages in a number of occupations today
Wages  Productivity 
Continued employment growth to 2010, followed by
demographic shift
Continued tight labour market & shortages
Intense demand in Alberta drawing trades people from
across Canada and now internationally
12
Current Occupation Shortages
Specialty trades:
- Formwork
- Framing
- Rebar
Carpenter
Drywaller
Plumber
Sheet metal
Heavy Equipment
Operators
Electrician
Painter
Building envelope
Other trades (e.g. Glazier,
Lather)
Labourers
Managers, supervisors
Estimators
Engineers, technologists,
technicians
13
Where Construction Prices
are Going and Why
14
Construction GDP
Real GDP Growth
12
(%)
9.7
10
8.6
Industry Overall
8
Constructions
6
4.5
4
2
4.0
3.7
3.0
1.6
1.2
2.2
2.6
2.2
0
-2
-1.4
-4
-3.6
-6
-8
-7.8
-10
1998
1999
2000
2001
2002
2003
2004
15
Construction Wages
Real Wages
Average Weekly Earnings (BC, 1997 Constant $)
1,000
Constructions
950
Provincial Average
900
Goods
Services
850
800
750
700
650
600
550
500
1983
1986
1989
1992
1995
1998
2001
2004
16
Profit Margin in Canadian Construction Industry
(%)
5
4.7
4.6
3.8
4
3.4
3
3.6
3.5
3.4
3.3
3.2
2.8
2.7
2.5
2
1.4
0.9
1
0.5
0
-0.2
-1
1988
1990
1992
1994
1996
1998
2000
2002
17
Construction Material Costs
140
Construction Materials Price Index,
1997 = 100
120
100
80
60
40
20
0
Lumber,
softwood
Iron and steel products, second
stage
Cement and concrete products, second
stage
Total, non-residential building
construction
1981 1984 1987 1990 1993 1996 1999 2002 2005E 18
Labour Productivity
(1992=100, Canada)
150
140
130
120
110
100
Construction
90
Total Economy
80
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
19
Recorded Escalation to 2005
20
Projected Lower Mainland Escalation Rates
21
Vancouver Island Construction Cost Increases
Period of Time
Increase
2000 – 2005
35%
2004 – 2005
13 – 15%
22
Labour Shortage
Mitigation Strategies
23
Training as a Human Resource Strategy
Attraction – credential & mobility
Retention – Employees value the investment
Focused investment in skill development to
increase productivity – improved skills for
employers
24
Retention Strategies
Identify key people
Focus on people you know are absolutely essential for success
Look at strategies employed by other sectors (e.g. software industry)
- Know your employee’s intentions
- Retention bonuses
- Fast track promotion
- Equity in company
- Location bonuses
Hire locally whenever possible
25
Bidding
26
Choose What to Bid on
Many contractors are now being selective about bids,
based on labour risks
27
Accessing the Labour Pool
28
Future Sources of Labour
Components of Population Change, 1971/72 to 2030/31
120
'000
Projected
100
80
60
40
20
0
-20
197172
Source:
BC Stats
197677
198182
198687
199192
Net Interprovincial
199697
200102
200607
Net International
201112
201617
202122
202627
Natural Increase
29
Capitalizing on Current Labour Pool
Construction generally only accesses about 40% of
available labour pool
To access the balance new human resource strategies
required
30
The Changing Faces of Labour
Aboriginal
people and
visible
minorities:
“Together, their
population
exceeds that of
BC and
Manitoba
combined”
(Canadian Business, March 29
- April 11, 2004)
31
Expanding the Labour Pool
32
Expanding Immigration
Immigration
Permanent – PNP
Temporary work visas – Up to two years
33
Percentage Share of Immigrants
by Intended Occupation
% Share of Im m igrants by Intended Occupation (1966-2004)
%
20
18
18.4
16
m anagerial
professionals
sales/clerical
labourers
trades/technical
14
12
10
8
5.8
6
4
2
0
1966
1976
Source: Citizenship and Immigration Canada
1986
1996
2004
34
Summary
Skills shortages are here and are likely to be an issue for
some time
The BC government is assisting through:
– ITA – increased training opportunities, industry leadership,
and new programs
– Immigration – working with Feds to fast track process
– Tax incentives for training – scope to be defined
– Federal government has also promised tax incentives
35
Summary
Employers and others can help by:
–
–
–
–
–
–
Training
Retention strategies for key people
Selective bidding
Capitalizing on underutilized portions of current labour pool
Expanding labour pool
Looking at productivity strategies
36
Thank you
Brian Clewes, CEO
Industry Training Authority
604-214-8706
[email protected]
37