Workforce challenge: The hunt for skilled talent

The fight for top talent is more competitive than ever

As Canada’s economy shifts toward technology-driven growth, your organization faces an urgent challenge: finding, developing, and retaining the digital professionals you need to succeed.

Industries are already struggling with chronic skills shortages, shifting workforce expectations, and a growing reliance on AI in recruitment. This issue will only accelerate in the year (and years) ahead. Without strategic action, these trends could stifle innovation, slow productivity, and put businesses at a disadvantage in the global market.

The growing digital divide

The demand for tech talent remains high. Despite high-profile job cuts, Equinix’s Global Tech Trends Survey reveals that 70 percent of Canadian businesses cite a shortage of skilled workers as a major barrier to success. The most sought-after skills include cloud computing, AI, cyber security, and data analytics.

However, the workforce isn’t keeping up. The Future Skills Centre reports that 90 percent of jobs in the next decade will require digital skills, but only 54 percent of workers currently have them. Canada risks falling behind in the global digital economy without urgent investment in upskilling and reskilling.

The race to recruit and retain

The competition for skilled digital professionals has never been fiercer. Businesses are facing:

Difficulty filling full-time positions: More than 75 percent of organizations report difficulty hiring full-time employees, as per the Society for Human Resource Management’s 2024 Talent Trends report.

Specialized skills gaps: Cyber security, AI, and data science roles remain particularly difficult to staff.

Retention struggles: Even with a strong labour market, businesses are struggling to keep top talent.

Canada’s aging workforce is compounding this labour crisis. Many skilled professionals are retiring, leaving gaps in knowledge that younger workers are not yet ready to fill.

Meanwhile, skilled trades and essential industries are suffering from declining interest. Despite strong wages and career stability, younger generations increasingly prefer technology-based roles over skilled trades, mining, and manufacturing.

The future is clear: Canada’s innovation and productivity will continue to suffer if organizations fail to prioritize talent development.

Still, there does seem to be a glimmer of hope. Canada is taking steps to close this skills gap, like launching the Digital Talent Platform, which connects digital professionals with job opportunities in the public sector. As of publishing, more than 14,000 applications have been received.

Despite these efforts, policy shifts and public sentiment may impact hiring strategies. And consequently, organizations cannot rely only on digital platforms to address talent needs. It’s critical that you prepare for potential changes to labour laws, immigration quotas, and funding for workforce development.

AI in recruitment

AI is transforming hiring. Businesses are using AI solutions to:

• Speed up hiring processes by filtering resumes and automating assessments
• Improve candidate experiences with personalized recruitment journeys
• Identify skills-based applicants beyond traditional job titles

However, it’s not without risks like:

• Bias in hiring algorithms can unintentionally exclude qualified candidates
• Over-reliance on AI may eliminate strong applicants with non-traditional backgrounds
• Lack of transparency into AI training and decision logic raises compliance and ethical concerns

Additionally, with the rise of AI, transactional jobs have great potential to be replaced by AI and automation, prompting employers to decide whether to reskill their workforce or downsize.

To succeed, your organization must ensure that AI is a tool for efficiency and improved experience, not a barrier to diverse hiring.

Risks to watch

Aging workforce and retirements: Senior employees are leaving, creating knowledge gaps in key industries, like the trades

Chronic skills shortages: The skills gap is widening as organizations struggle to fill key roles, hindering productivity and growth.

Economic uncertainty and wage growth: Plans to curtail wage increases amid a glum economic outlook could potentially affect talent retention and attraction.

Labour shortages in mining: The mining industry faces severe labour shortages amid soaring demand for minerals essential in various technologies.

Temporary foreign worker caps: Employers relying on low-wage foreign labour will be restricted, impacting sectors like hospitality and agriculture.

Labour integration challenges: Canada’s labour market struggles to keep up with high immigration, leading to challenges in job creation and integration of new workers.

Demand for reskilling and upskilling: More companies focus on reskilling existing employees because of budget constraints and the need to fill skills gaps.

Skills mismatch due to rapid tech advances: Technology is evolving faster than workers can adapt, necessitating continuous learning and adaptation.

Sector-specific skills shortages: Certain sectors, like construction, utilities, and mining, face specific skills shortages, with downstream effects on productivity. 

Public sentiment and policy shifts: Public backlash and electoral pressure lead to policy changes that impact immigration and foreign worker programs, which influence the availability of skilled labor.