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October 11, 2013

Bridging the skills gap

One of the perennial issues of Canadian policy – the alleged skills gap, between those our graduates have and those employers need – was back in the headlines this summer following reports that one in five university graduates are still working in jobs that do not require a university degree and that, simultaneously, the GDP foregone from a lack of skilled job candidates is worth 24 billion dollars in Ontario alone.

But is this evidence that a skills gap exists? Or is it indicative of a disconnect between the skills of new graduates and the expectations of employers?

These are the questions at the fore of this renewed debate, led by economist Don Drummond who five years ago was commissioned by the federal government to investigate and address the issue. His findings – that there is no evidence that the oversupply of graduates is matched by a similar oversupply of jobs requiring different skill sets – suggest that the skills gap may be a misdiagnosis of the problem. If there were a genuine skills gap, Drummond argues, we would expect to see a wage spike for jobs which require undersupplied skills. However, this has not materialised. Rather, Canada has 6.3 unemployed people (8 in Ontario) and a vast reserve of underemployed graduate labour for every posted vacancy – all of which suggests that the underemployment of graduates may be a demand-side problem, that we are simply producing more graduates than the market needs.

These conclusions are not undisputed. Research by the Conference Board of Canada points out that a number of specific industries, such as insurance, finance and health services, have fewer than 3 qualified job-seekers per job and an accompanying survey of 1500 employers found perceived skills shortages in a number of fields – scientific, engineering, technology, business and financial – which employers expected to worsen in the coming years.

Whether or not we accept the existence of a skills gap, the question remains as to whether post-secondary institutions can (or should) do more to increase the employability of their graduates? Max Blouw, president and vice-chancellor of Wilfrid Laurier University, responding in the Globe and Mail to the “increasing – and in my view mistaken – expectation that graduates are entitled to land a high-level and highly relevant job right out of school,” argues that the onus for bridging whatever skills gap exists falls on employers.

Universities are not, and should not be, in the business of producing “plug and play” graduates – workers who can fit immediately into a specific job in which they will spend the rest of their lives. Rather, universities must provide the kind of broad intellectual and personal development that enables graduates to thrive in a world that is constantly changing, a world that demands innovation and adaptability, a world in which they will change jobs frequently between the time they enter the work force and the time they retire.

But is it realistic – or economically desirable – to expect employers to invest in increasingly specialised skills (particularly in a world where graduates “change jobs frequently”)? Employers in Ontario today spend 40% less on training than they did in 1993, despite the fact that many jobs require a higher skill level than they did two decades ago. While a cheaper, better trained workforce is a draw for potential employers to come to and stay in Ontario, this means that a larger share of the increasing cost of training employees has been shifted to individual graduates and the government. With university degrees relatively unchanged, graduates are increasingly expected to invest additional resources into picking up the slack, in the form of top-up college degrees, graduate degrees, professional schooling and internships.

Canada is far from the only country facing this challenge and should be looking outward for innovative models of blurring education and work. A great example can be found in Sweden’s “industry-based learning” project, Hyper Island, which has been running since 1996:

At Hyper Island there are no teachers, no tests, no homework or textbooks; instead students immersed themselves in 19 weeks of project-based activity, responding to real briefs set by industry partners, followed by a 12-16 week internship. The Hyper Island students developed skills in problem-solving, teamwork, leadership and project management in an environment designed to mirror the workplace.

This video made by students from the Hyper Island Class of 2010 does a good job of summarizing the core learning methods of the programme: learning by doing, learning by failing (“so that students can fail a different way next time”), real life experience and self-management. The results are noteworthy: 98% of graduates get jobs within six months with the majority of graduates finding work as designers, art directors, developers and project managers; a quarter of students have 3 or more jobs to choose from and, perhaps most impressively, 20% eventually begin their own businesses.

A 2011 Manchester, UK pilot of the Hyper Island project by the National Endowment for Science, Technology and the Arts (NESTA) found that of the test group of sixteen students, six months after graduating:

– One did not complete the programme;

– Seven had secured paid full–time employment in the industry;

– Two were doing paid internships in the industry;

-Three had set up their own ventures in the sector and were planning on working in this way for the foreseeable future;

– Three were doing ad–hoc freelance work whilst they searched for permanent work in the industry.

Hyper Island today runs programmes in Sweden, the UK, US and Singapore which are funded primarily by student tuition. For example, the Swedish programmes cost approximately $18000 CAN for a one year diploma. The Manchester programme going forward will cost approximately $14000 CAN for a one year Masters accredited by Teesside University. During the pilot, three-quarters of this tuition was subsidized by NESTA in concert with a number of industry partners interested in whether “specialist, relatively short–term training” could provide an alternative education model. The pilot satisfied both industry partners and participating students on this front and found that the students would be willing to pay the full tuition provided student loan financing was available.

Whether or not we label it a “skills gap,” we need far more of our many graduates capable of finding – and creating – employment in our shifting economy. Maybe it’s time for a Hyper Island pilot of our own.

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