Canadian labour productivity needs a boost
In a speech to the Ottawa Economics Association on March 24, Bank of Canada Governor Mark Carney cited Canada’s “abysmal” productivity record and said over the past decade, its growth has averaged a paltry 0.7%, about half the rate recorded over the 1980 to 2000 period. And our ranking has dropped from third of 20 countries in the Organisation for Economic Co-operation and Development (OECD) in 1960 to 15th out of the current 30 members.
Last year authors John Baldwin and Wulong Gu from the Economic Analysis Division with Statistics Canada released a Canadian Productivity Review research paper, Productivity Performance in Canada, 1961 to 2008: An Update on Long-term Trends. It found that during 2000 to 2008, Canada’s labour productivity growth was much lower than growth in the US, creating a 1.9% gap per year.
Why is Canada an underachiever? According to Jon Wylie, Toronto-based director of Alexander Proudfoot’s global resources practice, unproductive time continues to be a factor for Canadian manufacturers and workers. This trend was identified in the research company’s most recent Global Productivity Report.
Based on a survey of 1,276 mid-level managers in 12 countries, including Canada, the report identified the following top barriers to improved productivity:
• staff shortages and labour pool issues;
• internal communication problems;
• legislation and regulation; low employee motivation and morale; and
• high staff turnover; and quality of supervisors.
“We would prefer to talk about the barriers to productivity. This includes opportunities to improve. It’s kind of scary, as almost 40% of our [Canada] workweek was considered unproductive time,” says Wylie. “Productivity is a critical issue for all of us. Our jobs, economy and standard of living all depend on higher rates of productivity.”
He says companies must work differently and emphasize training. “Productivity isn’t about restructuring and having fewer people do more; it’s about work being done more efficiently. Productivity saves money and creates more jobs than it ever eliminates. So, it’s really about job growth.”
Canadian workers receive an average of eight days of training per year. He notes this is the second lowest level of the 12 study countries. Also, 55% of the Canadian managers further question the relevance of the eight days worth of training.
“The training we have isn’t directly related to workforce efficiencies and productivity,” says Wylie. “Even if we maintain the common rates of training, let’s transfer them into performance improvements.”