Canada's workforce is growing, but are we using it?
Canada has long relied on immigration to drive growth as its population ages. In 2023 alone, 97.6% of the country's population growth came from international migration, both permanent and temporary. Immigration remains key to Canada's economic future.
While Canada excels at attracting immigrants, it struggles to make full use of their talents. Many newcomers, though highly educated, find themselves working in jobs far below their qualifications.
Over a quarter (25.8%) of Canadian immigrants with foreign degrees are overqualified for their jobs, more than double the rate of Canadian-born degree holders - the need for better talent integration is clear. These numbers suggest that the immigration system, while effective at bringing in skilled workers, falls short of aligning immigrant talent with high-demand sectors.
This results in wasted potential, labour shortages, and a growing drag on productivity
A recent Deloitte report titled “Talent to Win” states, “immigrant talent not only alleviates workforce shortages but also delivers significant competitive advantages in domestic and global markets.”
The talent misalignment: why immigrants are overqualified and underemployed
While Canada continues to welcome top talent from around the globe, its approach to workforce integration fails to match this talent with the jobs that need it most.
However, the challenge goes beyond credential recognition. There are also societal and cultural barriers that prevent the full utilization of immigrant talent. A recent Deloitte Canada and the Institute of Canadian Citizenship report sheds light on this issue. According to the report, a "smug Canadian superiority complex" often leads to the dismissal of immigrant ideas and experience as "not the way we do things here." This cultural bias and lack of focus on skills-based hiring further hinder the efficient integration of skilled immigrants, compounding the productivity crisis.
The report also underscores a broader culture of 'non-ambition' within Canadian workplaces. This concept refers to a lack of structured onboarding and in-job training, which disproportionately affects immigrants. Even as businesses embrace diversity, there is often a disconnect between hiring practices and the ability to capitalize on global talent.
Without decisive action to bridge this growing gap and address limiting beliefs, Canada risks falling productivity, wage stagnation, and declining living standards, placing further strain on public services and economic stability.
Unlocking local and immigrant talent: modernizing Public Employment Services
One answer to solving Canada's talent gap lies in modernizing how public employment services operate.
Without extensive local networks, immigrants often struggle to have equal access to employer networks, contextualize and translate their foreign work experiences into local career pathways, and navigate to wraparound supports. Modernizing the digital Public Employment Services (PES) is one step to addressing this problem. PES can be more than just job boards – they can become crucial gateways to economic integration for the immigrant workforce.
The OECD emphasizes that public employment services, when modernized through digital tools and AI, can significantly improve job matching and skills alignment, especially for underserved populations like immigrants and native workers in need of mid-career transitions and upskilling.
However, technology is not enough. The International Labour Organization (ILO) highlights that these services, when integrated with broader labour market policies and social protection, create a more holistic support system that helps workers navigate modern labour market challenges, such as skill mismatches.
A holistic approach that combines technological innovation with strong social policies can help Canada build a more inclusive and productive workforce.
The future of Canada's workforce: the time to act is now
Canada stands at a crossroads. On the one hand, many sectors and regions in the labour market are experiencing historic labour shortages. On the other, it has a wealth of misplaced and under-utilized talent in its immigrant and Canadian-born population.
By modernizing employment services, embracing cultural shifts, and harnessing the power of AI, Canada can address these challenges head-on.
But the time to act is now. With an aging population and declining workforce participation, Canada cannot afford to leave immigrant talent under-utilized. The solution is not about increasing the size of the workforce but making it more productive, innovative, and dynamic. By tapping into this talent potential, we can create a more vibrant and prosperous future for Canada.
Addressing the skills gap among immigrants is not just our collective social responsibility, but an economic imperative. Each of us, from policymakers to business leaders to the general public, has a role to play. By supporting modern career support services, we can revitalize the workforce, unlock the full potential of every worker, and ensure Canada's continued growth and prosperity.
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Ready to empower your workforce for the future?
At Thrive, we recognize that bridging the skills gap requires more than policy. It requires practical solutions. Our digital-first platform enables public employment service providers and organizations deliver tailored career support experiences, supported with AI-driven job matching and career navigation tools that help job seekers enter the labour market faster and more effectively. For newcomers, these supports can be incorporated into their pre-arrival and early settlement experience.
With proven success in helping job seekers land positions faster, Thrive is positioned to support businesses and government agencies in building a more robust, inclusive workforce. Together, we can unlock Canada's full potential.
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