What are the most valued skills in Canada?
From: Conference Board of Canada
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The Conference Board of Canada examined the relationship between skills and income, considering which skills have a strong positive association with earning and which have a negative association.
As the Canadian economy becomes more knowledge-centric and service-based, what will be the demand for workers who can manage and perform more cognitively challenging tasks? In which occupations will these skills be more necessary and common? And which skills will tend to have lesser value in the job market?
The report defined skill value based on its strength of statistical association to annual income. Excerpts from the report:
A key ingredient for a successful and financially rewarding career is having useful and valuable skills that enable people to perform specific jobs.
Accordingly, we expect workers with in-demand skills to earn higher wages and salaries, reflecting the need for those skills in the workplace. On the other hand, we also expect lower relative earnings for workers in those jobs that use lesser valued and less in-demand skills.
Apart from affecting earnings, a varied and flexible skill set can also improve someone’s hiring prospects and potential job opportunities. Evidence from recent online job postings has shown that “employers are suspending the use of degree completion as a proxy and instead now favour hiring on the basis of demonstrated skills and competencies. This will open opportunities to a large population of potential employees who in recent years have often been excluded from consideration because of ‘degree inflation’.”
Degree inflation can be defined as “the practice of seeking a candidate with a four-year college degree for a position currently held by someone with a high school diploma or an associate’s degree”.
The acquisition and continual refinement of useful skills is an important determinant of labour market outcomes because skills – for individual workers, as well as the whole labour force – are a core component of human capital. The World Bank describes human capital as “the knowledge, skills, and health that people accumulate over their lives,” and that “more human capital is associated with higher earnings.”
At the macroeconomic level, a skilled workforce with more human capital is one of the essential drivers of sustained national economic growth. The World Bank notes that higher levels of human capital and skills can enable workers “to realize their potential as productive members of society”.
Fortunately, Canada’s workforce is among the most highly educated in the world and continues to attract more human capital by way of targeted immigration policy.
Canadian workers need information to help identify which skills they should develop to increase their chances for financially rewarding careers. Most experts in education, economics, and human resources management agree that continuously refining – and flexibly applying – workplace skills is essential for career success in an increasingly dynamic, competitive, and turbulent labour market.
So a better understanding of the value associated with specific skills is important for Canadian workers, educators, career advisors, and policy-makers to ensure ongoing labour market vitality and broader macroeconomic strength.
Our analysis also shows that some skills – such as persuasion, operations analysis, and management of personnel resources – appear less important in terms of job earnings.
Key findings:
• When looked at individually, nearly all skills are positively associated with earnings. But when looking at whole skill sets, some skills have a strong positive association with earnings, while other skills show a negative association.
• The five most valuable skills are troubleshooting, operations monitoring, time management, reading comprehension, and monitoring.
• These skills are cognitively intensive and tend to be more common for management-level occupations, as well as for some jobs that need stronger technical proficiency. As the Canadian economy continues to become more knowledge centric and service-based, demand for workers who can manage and perform more cognitively challenging tasks will increase.
• The skills that tend to be of lesser value are technology design, quality control analysis, equipment selection, management of material resources, and service orientation.
• Though these skills are important when analyzed individually, they tend to be associated with lower incomes when considered as part of wider skill sets. These skills are more common for occupations that utilize manual labour as well as within basic service sector roles, both of which may be more susceptible to automation. As such, negative associations suggest that these skills are more heavily used in relatively lower-paying jobs, rather than disadvantaging or hurting workers’ potential earnings per se.
Recommendations:
• Screen and hire job candidates based on demonstrated skills rather than education.
Employers should focus on what skills a job candidate possesses and place less emphasis on educational attainment measured by schooling years.
• Embed skill development directly into curriculum and classroom instruction. Teachers, school administrators, and educational policy decisionmakers should incorporate skill development directly into curricula and educational achievement standards.
• Focus on teaching the most valuable skills. It is not enough to just assert that educators should teach skills; we must also choose which skills should be the focus of instruction.
The most valued skills should be directly inculcated and measured as part of standard educational instruction.
• There is a need for additional research on skills using more detailed data. We recommend further research using detailed microdata to estimate skill values more precisely. Labour market researchers and analysts should try to utilize actual skill measures when possible, either in conjunction with or in lieu of educational attainment.
The most valuable skills:
Troubleshooting. The most valued skill turns out to be troubleshooting, which is associated with a 14 per cent gain in earnings compared with the median income for all occupations.
Based on the distribution of troubleshooting skills across the Canadian labour market, higher-paying jobs often require relatively strong troubleshooting. Troubleshooting is defined as the ability to determine the “causes of operating errors and deciding what to do about it”. Some of the occupations that require very high troubleshooting skills include power system electricians, mechanical engineers, computer network technicians, industrial electricians, and elevator constructors and mechanics.
Being able to identify and solve problems is integral to any decision-making process and becomes more important in proportion to the consequences of any decision. The cross-functional application of troubleshooting means it is part of most occupational skill sets, but its relative importance compared with other skills rises along with the level of managerial or decision-making responsibility. More managerial and decision-making responsibility usually coincides with higher earnings, which is reflected in the value added by superior troubleshooting skills. As such, troubleshooting is a key skill for managers and supervisors at all levels and across all industries. It also features prominently in technical roles, especially in engineering and mechanics-related jobs.
Operations monitoring. Sufficient strengthening of this skill is associated with a 12 per cent increase in income. The purpose of operations monitoring is to watch “gauges, dials, or other indicators to make sure a machine is working properly”. Being highly skilled in operations monitoring implies familiarity and regular usage of various devices, tools, and instruments that require technological knowledge as well as hands-on experience. Jobs that require relatively strong proficiency in operations monitoring have both a technological as well as a managerial component.
There is a preponderance of engineering, mechanics, inspectors, operators, and technician roles among the jobs for which operations monitoring is particularly important. Some examples include: mechanical engineers, power engineers and power systems operators, machining tool operators, industrial instrument technicians and mechanics, and aircraft mechanics and aircraft inspectors. The jobs for which operations monitoring is the absolute most important are air pilots, flight engineers, and flying instructors.
Time management. As proficiency becomes relatively strong in time management, income can increase by up to 12 per cent compared with the median. Being able to efficiently use a limited number of working hours to accomplish goals is an essential part of job performance, while misallocated time can translate into inferior workplace results. Efficient time management and task prioritization benefits workers and organizations via greater productivity, accomplishing more tasks, and reducing workplace stress. Some higher-paying jobs that require well-developed time management skills include: senior managers in health, education, social and community services, and membership organizations, managers in healthcare, architecture and science managers, and government managers in economic analysis, policy development, and program administration.
Reading comprehension. Sufficient strengthening of this skill is associated with a 10 per cent increase in annual income. Though basic reading abilities are required for just about every job, higher-paying knowledge workers or managerial jobs require sophisticated comprehension skills – the ability to understand, process, summarize, and extract insights from what is being read. High-level reading comprehension features in numerous liberal arts professions like: university professors and lecturers, senior managers in health, education, social and community services, and membership organizations, economists and economic policy researchers and analysts, and school principals and administrators of elementary and secondary education.
An important characteristic of high-level reading comprehension is that it cannot be easily replaced by computers and artificial intelligence, making jobs that utilize advanced reading comprehension hard to automate. Developing high-level reading comprehension skills can potentially shield some workers from future automation risks.
Monitoring. Monitoring is associated with a 9 per cent increase in income as proficiency strengthens. Unlike operations monitoring with its focus on observing how machines are performing, monitoring focuses on observing how people are doing on the job. This skill is defined as “monitoring/assessing performance of yourself, other individuals, or organizations to make improvements or take corrective action”. Organizational decision-makers must constantly be monitoring and evaluating employee performance. Managerial roles across numerous industries that feature strong monitoring skills include: fire chiefs and senior firefighting officers, banking, credit, and other investment managers, retail and wholesale trade managers, and architecture and science managers. Many of the higher-paying jobs that are characterized by strong monitoring skills are technically oriented, such as: industrial and manufacturing engineers, airline pilots, flight engineers, and flying instructors, and construction managers.
The Future Skills Centre – Centre des Compétences futures (FSC-CCF) is a forward-thinking centre for research and collaboration dedicated to preparing Canadians for employment success. It was founded by a consortium whose members are Toronto Metropolitan University, Blueprint, and The Conference Board of Canada.
To learn more about this report and other skills research from FSC, visit fsc-ccf.ca or contact info@fsc-ccf.ca.