London’s Skilled Worker Shortage

October 26th, 2007 by Potato

There was an article in the London Free Press today about a lack of skilled workers in the city. (Note: the LFP has pretty terrible online retention, this article may not be accessible after a week).

A London company is poised to grow, hiring as sales increase — but it will have to expand outside the city.

Autodata Solutions is an example of how the shortage of skilled workers is hurting the city’s economic growth.

In fact, 62 per cent of companies said they faced a shortage of qualified candidates and another 29 per cent said they had trouble finding people to relocate here.

The most ambitious of the plans is to bring more than 1,000 students from Fanshawe College and the University of Western Ontario to the London Convention Centre in January to meet with businesses looking for workers.

For companies such as Autodata Solutions, which cannot find software developers, the labour shortage has had a serious effect.

Over the last year, the company has hired about 100, and it now employs about 200.

The problem is we do not need people out of school. We need workers with three to five years’ experience. The issue is skill,” said Lisa Harrison, director of human resources. “I would prefer to grow here; we love London, we’d be happier if we could find people here.”

[Emphasis mine]

This is just retarded. It’s not that there’s a shortage of skilled workers: this is a university town, with way more skilled workers graduating every year than the city can possibly hire all by itself. The problem is with a lack of skilled, experienced workers. But companies have to realize that someone has to hire recent grads in order for them to get skilled. Yes, they’ll need a bit more training, but they also cost less at first, so it’s a bit of an investment, really. After all, someone with 3 years seniority at another company will still need to be trained to the specificities of your company. It might take only a few months instead of a year or two, but it will hardly take 3 years for a recent grad to actually catch up in the experience specific to your company. If nobody in the city hires recent grads, then the grads move away. And once they move, it’s very hard to get them to come back. While many students may come here with a plan to move to Toronto as soon as their finals are done, there must be a substantial portion who would stay if they had a local job offer within weeks of graduation.

As one advances in life beyond graduation, one tends to settle down, start a family, etc. Once that happens, it becomes hard to convince one to move cities for a job. Especially considering how difficult the “two-body problem” is to solve in London. If I am a talented, experienced software engineer, there may be a nice selection of jobs for me. But if my wife is a teacher or librarian, then there might be no work for her, and I might instead try to find a job for myself in a larger city like Toronto or Ottawa, where we could both find jobs. These factors make it much harder to lure someone away from another city as they progress in life, and again the solution appears to be hiring recent grads and training them up within the company. Get them while they’re single, then keep them while they put down roots here, and it might even help reduce turn over down the road.

If indeed this one company in London has hired 100 skilled employees over the last year, how many of those really needed to be veterans, and how many could have been trained in house? If they have a need for another 100 in the next year or two, how much easier and how much sooner could those positions be filled with local recent grads than job searches abroad? Is it better to have a position lay vacant for a year while one searches for an experienced employee than it is to hire a fresh employee and have them trained up by the end of that year?

And, moreover, how much does training cost vs. opening another branch?

The company is looking to add branches outside London and is considering the United States, Guelph and Windsor, where there are workers.

“Our growth will not be in London and the skills shortage here is a big part of the issue,” Harrison said.

There may be skilled workers in Guelph and Windsor at the moment, but with cities that are even smaller than London, how stable is that job market/pool of workers?

2 Responses to “London’s Skilled Worker Shortage”

  1. Potato Says:

    I was tempted to send this in as a letter to the editor, but someone else seems to have similar thoughts:

  2. A Friend Says:

    The other thing this article in the Free Press does not mention is that the Company in question, although hired 100 people in the last few years, has not grown in size (by employment numbers)…..they’ve simply been unable to retain workers due to poor working conditions and compensation.