Low wages is the third reason identified for recruitment difficulties. From the survey, however, average starting wages for production workers are $8.90/hour, average top wages for production workers are $13.47/hour, average starting wages for certified workers are $11.08/hour, and average top wages for certified workers are $16.63/hour. Wages can be as high as nearly $36/hour for production workers and $28/hour for certified workers, and salaries can be as high as $45,000/year for production workers and $120,000/year for certified workers. The manufacturing sector offers good salaries but the perception is the opposite. Meanwhile, the industrial skill gap exists across Canada and within many provincial sub-sectors, which creates increased labour competition. As evidence, turnover rate has also been increasing over the last three years with the driving factor being other employment opportunities. This will place pressure on firms to pay higher salaries, which will reduce their competitive position given rising input costs, transportation expenditures, infrastructure demands, and inability to pass costs to the customer.
The Management Issues Survey administered to manufacturers across Canada by CME indicates that lack of qualified personnel is one of the most critical constraints on performance improvement. This is another indicator that one of the most pressing issues in the manufacturing sector is the lack of required skills. As such, the current human resource challenges for the manufacturing sector will continue to increase if the issues go unaddressed.
CME’s Management Issues Survey shows that the number one factor influencing location of new facilities is access to skilled labour. If the skills gap in the manufacturing sector continues to grow in Newfoundland and Labrador, not only will our existing businesses deteriorate, new manufacturers will not perceive this province as a good place to operate a manufacturing facility. Attention needs to be given to skills development in the manufacturing sector to remain competitive and grow the industry.
Preliminary research shows that graduation placement rates are very high in the skilled trades from CONA. There is also evidence that starting salaries for appropriately trained skilled trades are above average. In addition, anecdotal information has indicated that too many people are educated in areas where they cannot find employment, while companies cannot find expertise in skilled trades and industrial technologies. An overabundance of training has been available for certain sectors/skills within this province over the past ten years. This has caused a multitude of problems, including out-migration, under-valuation of skills, and reduced motivation towards higher value-added activities in sectors with overabundant labour supply. This indicates a poor matching system between demand and supply of skills. Needed, though, is further work to identify the experiences of past graduates.
The current industrial training capacity is unlikely to be able to meet future demand. In 2000, approximately 700 people2 graduated with any level of industrial training. Over the past number of years, industrial training capacity has been reduced, and some required programs are not offered at all. Increasing from 700 to 2400 will require additional capacity. As well, due to various decisions, some delivery of training is now solely within union environments, which do not reflect the characteristics of the small industrial based company. This is not the fault of educational institutions, government, or influencers – but rather the result of reactions to short-term trends and fiscal realities. Needed is additional work with educational institutions to determine the requirements to build an educational infrastructure that will bridge the industrial skills gaps in the province.
2 This is the total of all 1-, 2-, & 3-year programs in both the public and private sector. Return