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April 3, 2023

Ahead of the game or falling behind? Canada’s readiness for a borderless, global workforce

A shift towards a more distributed, borderless global workforce will not necessarily lead to job losses for Canada, but it will be disruptive and require restructuring in the labour market.

Three years ago, nearly five million Canadians suddenly shifted to working remotely at the outset of the pandemic. While some workers have returned to in-person work, many are still in remote positions.

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The full impacts of this experience are still being understood. In a new report for the CSA Public Policy Centre, where I hold an executive position, I explored several policies affected impacted by remote work, including housing, productivity and inclusion.

The report found that remote work could have far-reaching impacts on many areas, including helping Canada meet its climate change goals. If all workers who could work remotely did so, it would be the equivalent of eliminating the carbon footprint of roughly 600,000 Canadians.

But one area that has received less attention is how Canada can prepare itself to compete in an increasingly globalised labour market. Firms now understand that geographic proximity is not a precondition of employment. Many companies, such as Shopify and Airbnb, have shifted to remote and hybrid operations as a result of the pandemic.

In the same way that manufacturing jobs shifted to lower-cost jurisdictions in the early 2000s, the 2020s could be the decade that sees white-collar jobs being parcelled out to the best and most affordable talent, regardless of location.

A borderless global workforce

Cultural norms are often cited as a reason why knowledge work (professional, management and technical occupations) cannot easily be offshored. An auto assembly worker need not be fluent in English, for example, but a lawyer or accountant must skillfully navigate complex workplace environments.

Yet, in a world where everyone is consuming the same content on Netflix and can leverage ChatGPT to draft conversational emails, the cultural gaps between Calgary, Krakow and Mumbai are narrower than ever.

Capital is highly mobile today and superstar firms, ranging from Amazon to Alphabet to Apple, have already shown their willingness to shop around for the most business-friendly tax and regulatory regimes.

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There is little reason to believe that labour will be any different. What does this mean for Canada? A shift towards a more distributed, borderless global workforce will not necessarily lead to job losses for Canada, but it will be disruptive and lead to transitions both within sectors and for workers.

Winning over remote workers

How can Canada ensure its workers have the right skills to compete and win globally? We need to adopt a two-track approach that focuses both on making Canada a source of talent for global firms, and a preferred home base for firms and in-demand knowledge workers.

In the face of a rapidly changing employment landscape for workers wrought by technological change, Canada needs to increase both the amount spent on training and labour market supports, as well as the effectiveness of those expenditures.

Historically, Canada has spent only one-third as much as Denmark has on labour market supports such as upskilling and re-training. Denmark’s generous Flexicurity model is often held up as a model of effective labour market policy.

Canadian firms don’t fare much better than governments do in preparing workers for disruption, spending only an average of $240 per employee on training annually.

Social infrastructure needed

In a world of increasingly mobile firms and workers, we need to double-down on the social infrastructure that will attract the best and the brightest employees.

Safe communities, diversity and tolerance, strong public health care and education systems and thriving cities are all critical ingredients in this regard. Some of these systems have been significantly strained during the pandemic, and will require focused resources and policy attention to rebuild.

Delivering more affordable housing might stand atop the list of issues that will be key to attracting and retaining remote workers — a December 2022 survey by the CSA Public Policy Centre found that 71% of Canadians would consider moving to communities with lower costs of living for a remote role.

The high costs of living in cities like Toronto and Vancouver, where typical home ownership costs chew up over 85% of median household income, could be a deal-breaker for many workers with more affordable options available to them.

Succeeding in the global war for talent will boost the prospects of economic growth in the years to come. As the world’s labour market flattens, Canada has an opportunity to stand out with a thoughtful approach that emphasizes skills and builds upon our quality-of-life strengths.

This article by Sunil Johal, professor in public policy and society, University of Toronto, is republished from The Conversation.

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