What is the Problem We’re Trying to Solve With Micro-credentials?

MICRO-CREDENTIALS AND THE SKILLS CHALLENGE 

What is the Problem We’re Trying to Solve With Micro-credentials?

The skills challenge is among the key obstacles that communities, employers and organizations face at this time. 64% of employers say they can’t find employees who have the skills they are seeking. In the second quarter of 2022, there were nearly 1 million unfilled job vacancies in Canada¹  — the highest on record²  — and this comes at a time when unemployment in Canada is at 5.2% (September 2022), one of the lowest levels seen for some time. Adding to the challenge is the fact that 31% of workers who are currently employed are considering changing jobs, employers or both soon³.

At the same time, Canada’s demography is changing, with more immigration (close to 240,000 economic immigrants a year), more baby boomers leaving the workforce, fewer young people apprenticing in the skilled trades and a slowing economy (3% GDP growth is forecast). There’s also the possibility of a technical recession in 2023, and new patterns and changing expectations for work.

Governments, employers, trade unions and workers are looking for new approaches to skills development and new ways of learning that better leverage technology, work-based learning, and the opportunities for short, focused, intense learning experiences. 

There is, for all these reasons, a focus on upskilling, reskilling and re-imagining work-force training and skills development.

Linked to the skills gap issue is the issue of Canada’s productivity challenge. The productivity of Canadian firms relative to firms in other parts of the world (especially the US) has been a problem for some time.

Wulong Gu (2019)⁴  from Statistics Canada used micro-data collected since 2000 to study Canadian productivity at the firm level. He split the data into the top 10% of the most productive firms by industry, comparing their level of productivity to the other 90%. Gu found that Canada’s post-2000 productivity growth slowdown was due to: 

1) Slower rates of innovation at Canada’s top firms 
2) A decline in the rate of innovation diffusion from Canada’s top firms to other firms
3) A decline in resource reallocation among firms (i.e., slower creative destruction and business dynamism)    

Productivity has a direct impact on wage growth because declining productivity impairs employers’ ability to boost wages. It also impacts the scale and rate of GDP growth in the country as a whole. According to the Business Council of BC⁵:

“The OECD projects that Canada will be the worst performing economy out of 38 advanced countries over the next 40 years (2020-2060), achieving the lowest growth in real GDP per capita — the most important measure of overall prosperity. The main reason for Canada’s inability to generate gains in per capita GDP is its persistent inability to achieve meaningful gains in labour productivity.”

Overcoming the skills gap while also increasing productivity will require a highly skilled and constantly innovating workforce. This, in turn, requires a continuous investment by employers, employees and governments in skills development.

Why Micro-Credentials Could Be Part of the Solution 

Micro-credentials are seen by many as a response to the skills challenge. They are intended to be: 

a) Based on skills in demand by industry and co-sponsored by employers
b) Competency-based and competency assessed
c) Short (days or a few weeks rather than months)
d) Available on demand through short in-person classes, bootcamps or online 

The idea is that micro-credentials provide rapid opportunities to reskills and upskill. 

There are an estimated 10,000+ micro-credentials now available across Canada. And although not all the 495 micro-credential programs and 3,000+ micro-credentials available in Ontario meet the criteria outlined above, those that do and are alleviating the skills development challenges many employers face. 

[1] In fact, 958,000 in August 2022 – see https://www.immigration.ca/canada-job-vacancies-still-high-in-august-but-economy-slowing-down/

[2] See https://www.thestar.com/business/2022/09/22/does-canada-have-enough-workers-record-high-of-nearly-one-million-jobs-unfilled-in-second-quarter-of-2022.html#:~:text=Canada's%20job%20vacancies%20hit%20a,per%20cent%20year%20over%20year.

[3] See https://go.mcleanco.com/2022_hr_trends_ga?source=google&medium=cpc&creative=599440460060&keyword=future%20of%20work%20trends&matchtype=b&network=g&device=c&campaign={campaign}&utm_source=google&utm_medium=cpc&utm_term=future%20of%20work%20trends&utm_campaign={campaign}&utm_content={adgroup}&_bt=599440460060&_bk=future%20of%20work%20trends&_bm=b&_bn=g

[4] Gu, W. (2019) Frontier Firms, Productivity, Dispersion and Aggregate Productivity Growth in Canada. International Productivity Monitor, Number 37 (November) pages 96-119. Available at http://www.csls.ca/ipm/37/Gu.pd

[5] See https://bcbc.com/insights-and-opinions/canadas-productivity-performance-over-the-past-20-years