Challenges Facing Canadian Organizations
Challenges Facing Canadian Organizations
Canada. They are the world’s largest producer of newsprint, nickel, and asbestos. Montreal, Toronto, and Vancouver are rated some of the best cities in the world. There is also Canadian Broadcasting Corporation (CBC), which bring us Canadians radio and television broadcasts the news, music, and entertainment. (Schwind, 2010, p. 3)
Even though Canada is a leader and a top competitor around the world in regards to business, resources, talent, and innovation, there are still many challenges facing Canadian organizations. In this paper I will discuss the many ways that Canada, from a business stand point and as whole, faces challenges and what we as a country are doing to rise and succeed through these challenges. There are five major challenges that are facing Canadian businesses; Economic, Technological, Demographic, Cultural, and Legal.
Economic challenges are broken down into three separate categories; surviving a recessionary cycle, facing the global trade challenge, and meeting the challenge of productivity improvement. All three of these are interrelated and I will briefly describe each section of the challenges. Surviving the recessionary cycle is a tough challenge especially for the Human Resource Managers, who are tasked with planning, coordinating and ultimately implementing layoffs. Recessions are a misfortune that affects everyone and every company, big or small. Job security and overall high morale of employees at a company are troubled as well in these hard times. The global trade industry is another issue that Canadians are facing. International trade has been critical to Canada’s prosperity and growth. (Schwind, 2010, p. 5) Canada is ranked number nine in the world for exporting internationally, (Metcalfe, 2008), but per capita we export more than the United States or Japan.
To face this challenge Canadian organizations are expanding abroad by opening new plants and increasing activity rates in foreign countries. This is to be closer to the customers and also for the lower labour costs. Being a multicultural nation has given Canada a competitive advantage in regards to trading with other countries. However, other countries have a lower-cost based trading system due to factors such as lower labour costs, has caused Canada to lose our market share in some industries such as pulp and paper, cotton yarn, and steel manufacturing. (Schwind, 2010, p. 6) Productivity is the third aspect of economic challenges we face. Technically, productivity is the ratio of output to input. It is a measure of how efficiently and effectively a business or an economy uses inputs such as labour and capital to produce outputs such as goods and services.
Alan Greenspan, an ex-chairman of the Federal Reserve of the United States, was quoted as saying “Productivity – the goods and services produced from each hour of work – is the magic elixir of economic progress. It’s why we live better than our grandparents did, without working longer hours.” (Demos, 2011) Canada’s largest trading partner, the United States, has been improving their productivity faster than we have. We have to increase our productivity as a nation in order to continue to thrive and grow. A report conducted in 2000 stated that if the productivity gap between Canada and the U.S. were to continue, it would reduce Canada’s living standards from 61 percent of U.S. levels in 1999 to 52 percent in 2010. (McCallum, 2000) In order to maintain and improve its productivity, Canada must update its technology to increase its levels.
There are two technological changes and challenges face the Canadian businesses today, computerization and automation. Computers and their technology are rapidly growing and they affect all aspects of work. They produce large amounts of information in a timely matter, and have the ability to massively store and transfer the information. There is an increase in flexibility, such as being able to work at home, or even while on vacation, if need be, due to the internet, emails and data transfers. Telecommunicating is also a factor in helping with productivity, morale and cost reduction. Not only is there internet, many companies also have intranet, which are a private information network within the company. The mix of telecommunicating and intranet increase communication and information knowledge between members of an organization to also increase productivity.
Automation is the automatically controlled operation of a process, system, or equipment by mechanical or electronic devices. The two major reasons for automation is speed and better service. In some capital equipment items, Canada takes six to twelve months to make, where Japan takes six to twelve weeks. (Schwind, 2010, p. 10) This is a major challenge that Canada must face. The service factor is continuous. A machine is programed to do the same exact operation over and over to ensure quality and effectiveness, where as a human might make an error on one or more areas of the operation. Another challenge with technology and automation is cost. Machines are expensive and not all companies can afford the high-tech equipment, and therefore must rely on manual labour.
Demographic challenges include the changes associated with the labour force, such as education levels, age, and participation levels which occur slowly and are usually known in advance. The number of female workers in the workforce has greatly increased over the last three decades, and with that so has the way organizations are ran. In the past the men worked and the women stayed home and took care of the house and home. Now, more and more women are out in the workforce and companies have had to change the way to operate, in order to accommodate. Also, more and more workers are getting higher educations and becoming more knowledgeable in many areas of the field. Canada’s challenge with these issues are to be able to find, keep in home country, and continually train and increase the overall knowledge to promote further success in Canadian organizations in the future. Age is a key factor that has started in will continue to affect Canadian operations.
The term “baby-boomer” is defined as any one born between the years 1946-1966. (Krotki, 2012), and the majority of that population is already, or getting ready for retirement. This is social (health care) and organizational challenge facing the workforce is termed as the “old age crisis”. (McLean’s, 1983) The challenge facing Canada now is the vast amount of workers that will be retiring, and the knowledge that they take with them. The largest sector that this “crisis” will affect is the trades department. According to Statistics Canada, in 2007, the ratio for non-trades was 0.7, indicating significantly more workers nearing retirement than in the early stages of their careers. This was substantially lower than the ratio of 1.6 in 1987 and illustrates the well-known phenomenon of the baby boom generation—now approaching retirement—and the subsequent significantly smaller generation beginning their careers.
When this ratio is below one, meaning fewer people in the early stages of their careers than will be retiring soon, it points to a potential net out-flow of workers (Pyper, 2008) So as the baby-boomers retire, there will be a shortage of skilled workers to fill their shoes. The last factor of the demographic challenge is that of the part-time workers and contractors or contingent workers. There is a disadvantage as well as an advantage to this line of work. For the employee it means less benefits and lower pay than that of a full-time worker. But on the other hand, the employer will in turn pay less labour cost, and benefit payouts, to part-time workers, as well as contractors, who are not on the pay roll, thus reducing long-term costs. The cultural challenges facing Canada today are crucial due to the multicultural nation that we are.
The main areas are work-related attitudes and ethnic diversity. People now are requesting more vacations and holidays than before and a varied workweek. Instead of the typical two week vacation a year, and Monday to Friday 9-5, they expect more and want more flexibility. There is also a major attitude difference between the baby-boomer generation, Generation X, and Generation Y workers. Canadian organizations have to accept these differences and find ways to accommodate each group. Society as a whole are also more ethically orientated now.
Business can run like they used to two decades ago. People and employees are more aware of the ethics and expect to be treated fairer and with respect. Canada’s society and workforce is a cultural mosaic. Hosting and employing a variety of ethnics, races, cultures and social groups. Having this vast array of differences poses opportunities as well as challenges for Canadian organizations. They prosper by gaining knowledge of each different group, but they must also take into consideration that they are all different and have different views, beliefs, and backgrounds than other people.
The final factor is that of legal matters, which are categorized into five sections; employment equity, human rights laws, charter of rights, minimum wage acts, and safety-related legislation. Employment equity is an act that was amended in 1996 and is a federal law that states one must remove employment barriers and promote equality. It was set to ensure equal opportunities for four different groups; women, persons with disability, Aboriginal people, and people of a visible minority. The Canadian Human Rights Act, in effect March 1978, proclaims that all people regardless of; age, sex, race, ethnic origin, colour, religion, sexual orientation, marital status, family status, disability, or conviction for which a pardon has been granted, shall not be discriminated upon, and should have equal opportunity to make for themselves a life which they choose.
The Canadian Charter of Rights and Freedoms is a federal law enacted in 1982, guaranteeing individuals equal rights before the law. Federal government passed the Minimum Wage Act in 1935, but minimum wage jurisdiction falls under provincial legislation. So each province has their own set of wages and rules to follow. The safety-related legislation is an area concerned with the safety and well-being of individuals in the workforce. These above mentioned legal matters are a definite challenge facing Canada’s organizations. More than ever people know their rights and freedoms, and expect safety in the workplace. The challenge for organizations is to uphold the law, and ensure safety and wellbeing for not only themselves but to the employees, their families and everyone involved whether it’s internally or externally.
Demos, D. (2011, Feburary). The New Formula for Branch Productivity. Retrieved Janurary 27, 2013, from Novantas: http://www.novantas.com/article.php?id=303
Krotki, K. J. (2012). “Baby Boom”. Retrieved Janurary 28, 2013, from The Canadian Encyclopedia: http://www.thecanadianencyclopedia.com/articles/baby-boom
McCallum, J. (2000, May). “Will Canada Matter in 2020?”. Royal Bank Current Analysis, Royal Bank of Canada Economics Department, p. 5.
McLean’s. (1983, Janurary 17). “Our Coming Old Age Crisis”. MacLean’s, p. 24.
Metcalfe, L. (2008, March 2011). Economic Statistics. Retrieved Janurary 27, 2013, from Nation Master.com: http://www.nationmaster.com/graph/eco_exp-economy-exports
Pyper, W. (2008, October). Skilled Trades Employment. Perspectives on Labour
and Income, 9(10).
Schwind, H. F. (2010). Canadian Human Resource Managment (9th ed.). (J. Cotton, Ed.) Whitby, Ontario, Canada: McGraw-Hill Ryerson.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 31 December 2016
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