Ottawa, November 7, 2005…A New Report sounds a wake up call for industry, government and academia to take immediate action to avoid major roadblocks in the growth of enterprises reliant on knowledge based workers for growth.
Conducted by CATAAlliance, and based on Ottawa as a first study cluster, the Report focused on how Ottawa-based SME's (between 20 and 500 employees) view the current and near future market for knowledge workers. The Report has a wealth of statistical data and analysis (see Survey methodology and highlights section).
"The perceptions, attitudes and actions captured in this survey indicate that once again there is a high demand for skilled knowledge workers in Ottawa. Our research revealed that 75% of the surveyed companies were currently in the process of hiring. More than 45% of these companies indicated that hiring the necessary talent was already somewhat difficult to difficult. Combine this with results that indicated an additional 15% of respondents not actively hiring today will begin to do so during the next twelve months and you have a strong argument that the Ottawa high-technology sector is in the midst of another hiring boom" said Keith Carter, CATA Director and Vice President, Business Development of Procom Consultants Group, adding "Unfortunately, our research indicated that these same companies who achieve business success through process- and goal-oriented practices do not extend a similarly structured approach to what is ostensibly their most valuable asset: human capital. What's more, our results showed that many companies are utilizing the same methods of accessing knowledge workers used widely during the tech boom and bust, a costly mistake that fed turnover, accelerated labour costs and contributed to sizable business losses or closures."
Who said the War was over?
The country's high technology sector is facing the highest employment rate since June 2000: the apex of the high tech explosion. Although 56% of respondents indicated that Ottawa had enough knowledge workers to satisfy their company's demands, 70% of respondents indicated that they will search outside Ottawa when looking for additional skilled labour. This suggests that local demands for skilled labour are already testing the limits of local supply. In combination with short supply issues, recent Accenture research suggests that companies will also compete to keep existing talent as well. It is generally believed that in the near future the labour market will be extremely turbulent and that turnover will be a leading concern for most enterprises. It seems clear that Ottawa tech firms are once again at war with one another for human capital.
Proven HR Management Methods Not Utilized
Of great concern to CATAAlliance was a key finding that the overwhelming majority of SMEs don't utilize best- practices to obtain and retain human capital. It is strongly believed that these practices should be structured and should form the basis for a holistic human capital management strategy. The results indicated that a mere 6% of the companies surveyed used a recognized, certified methodology to obtain and retain their most valuable asset, people. Furthermore, 3/4 of the companies surveyed do not measure ROI as it relates to human capital. When companies talk about their people as being their most valuable asset, CATAAlliance believes they then must quantify those assets the same way they do other aspects of their operations.
Contingent Workers (i.e., contractors/consultants/part time) Not Fully Utilized
Although almost half of the respondents agreed that accessing the labour market for traditional knowledge workers was at least somewhat difficult the survey also revealed that Ottawa SMEs do not appear to consider contingent labour as an option for addressing this problem and enhancing their overall human capital strategy. The survey results show that although respondents perceive the composition of the entire labour market accurately they don't access the contingent market to the same degree that they perceive it. In short they use far less contingent labour than is available to them. These results contrast current significant research that shows that U.S. companies are heavily leaning toward the use of contingent labour to achieve address shortages, gain flexibility and achieve cost savings.
Carter said "Sadly, these results strongly suggest that most firms in this survey are ignoring the root causes of workforce challenges, with obsolete recruitment processes and no way of measuring their ROI. At the same time leading employers are beginning to recognize that a best-practices approach to human capital is a prudent, cost-effective response that guards the interests of employers and employees alike. Companies that act on this knowledge will establish a cost-effective and sustainable competitive advantage through their ability to measure, identify and retain the region's best talent. Companies that continue with their unstructured and antiquated approaches to recruitment and retention will have failed to heed the lessons of the previous high tech hiring frenzy, and are likely to repeat the same mistakes"
John Reid, CATAAlliance President concluded, " The overall results sound a serious wake up call for the Ottawa and Canadian high-technology sector to take immediate steps to avoid repeating past mistakes. Given the current labour climate, companies seeking growth and shareholder value need to re-examine their overall human capital management process."
CATA mobilized its Board of Directors last week to develop innovative and practical solutions to the problem of attracting, training and retaining skilled talent to propel industry growth.
Study Methodology and Highlights Section
In August and September of 2005, CATAAlliance conducted a survey of local executives in the National Capital Region, which encompasses Ottawa, Ontario and Gatineau, Quebec. All of the respondents represent small-to medium-sized enterprises, or small-to medium-sized operations, with between 20 and 500 employees. The Survey was sponsored by Procom Consultants Group.
Out of the 237 companies in the original survey sample, invitations to 180 invites were delivered and 102 companies responded and completed the online survey, for an overall response rate of 43.0%.
Their responses help to answer questions like:
Presented below are the highlights:
High tech in Ottawa: the current market
The future workforce and labour market
Perceptions and process in hiring