By 2015-2018, Canada (and most other major economies) will have reached a point where there are more jobs available than people to fill them. That’s not very far off and, to the best of my knowledge, no one has a good plan on how to solve this problem. Much sooner than this, we will be facing a management labour shortage. Why? Because managers, mostly due to seniority, tend to be older than the average entry-level employees. I don’t think we, as an economy, have thought about how to fill this management labour shortage which is already starting to impact the trades.

The Journal of Commerce – Western Canada’s construction newspaper – identified this problem in mid-2007. [READ] Another article from 2006 predicted that management labour shortages would correct themselves as companies increased management pay to attract people into those roles. [READ] Russia and EU countries are having similar problems. [READ] Even China is not immune to the management labour shortage. [READ]

A few solutions have been bandied about that I want to identify and address here as evidence that we really don’t have a handle on this problem:

1. Immigrant recruits
   

   Many a pundit cite “immigration” as the great saviour of our economy as labour shortages rise. While I know many very capable immigrants, I also recognize that there are huge cultural differences between Canada and other countries that mean managers from these countries cannot just be parachuted into management roles here. Leadership and communication styles can vary wildly.

   Just as Canadian managers often have a hard time motivating employees in say, India – Indian managers have a difficult time motivating Canadian employees. This is not to say that we shouldn’t recruit immigrants to help fill the labour shortage. We should. We just shouldn’t expect them to be able to jump straight into management roles here.

2. Increased post-secondary education
   

   Labour market analysts occasionally assume that if we increase university participation rates, we can increase the supply of skilled labour. I think this is a dangerous assumption because as the shortage grows, employers will have to be less picky about their candidates. I actually believe that university enrolment will go down as the labour shortage increases.

   Why would you go and get an MBA to land an amazing job when you can land a good one without the degree? That might actually be a strategy to address the shortage – lower your standards. It’s important that managers also understand the industry they’re working in. A university degree doesn’t give you industry knowledge – that’s something you gain with experience.

3. Accelerated management training programs
   

   Some employers, like BC Hydro and the Federal Government, have management fast-track programs where new recruits go on rotation for two years through a number of departments, receive in-depth management training and mentoring. I have a colleague at BC Hydro who is going through this program right now. I actually think these programs are pretty effective but they’re not very scalable. For a company like BC Hydro who has hundreds of managers and only runs a handful of people per year through its accelerated management program, this program alone cannot solve their management shortage.

   These programs are not very scalable because it requires current managers to take time out of their normal duties to groom, train and mentor the program participants. This puts a hard limit on the number of participants. Without a low ratio of participants to managers, these programs are not that effective. Hence, there is a ceiling on the scalability of these programs.

Some of you might be thinking “so what? Does the world really need more managers?” Maybe we can do without as many managers – I suspect that management is self-replicating and in some instances, overbuilt. Can we do without 50%+ of all managers? Not a chance. We need to solve this problem ASAP. I’m open to suggestions.