Compared with large Canadian corporations that produce steel, lumber and oil, Harold Myers’s small Montreal-based biotechnology company has a tiny payroll indeed—just 20 employees. Myers, a 46-year-old electrical engineer who also holds a PhD in experimental medicine, is a co-owner of Thought Technology Ltd., which makes small portable electronic monitors to measure electrical impulses in the human body. Some of those devices help partially paralysed patients identify and develop muscles that are still functioning. Myers’s newest line of monitors helps adult patients control urinary incontinence, freeing them from what he calls “diaper imprisonment.” So far, that is not a huge industry. But while large corporations in traditional sectors of the Canadian economy have laid off tens of thousands of workers in the 1990s, Myers’s firm and hundreds of other small, specialized technology companies have been hiring. Myers himself has signed on seven young computer programmers during the past three years, starting at salaries of $35,000 a year or more, to write software for his company’s devices. Declared Myers: “There are lots of jobs for these people.”
Myers and his small staff are on the leading edges of two of the fastest-growing sectors in the New Economy: health care and software. And, whether the economy as a whole climbs swiftly out of the recession or not, economists predict that the demand for so-called “knowledge workers” in small technology and service companies will increase in the 1990s. By contrast, large manufacturing and resource companies, which have suffered in the recession and which are battling low-cost foreign producers, will continue to slash their payrolls even if markets in those sectors rebound. And those cutbacks will spread to other sectors. Last week, Canadian National Railways of Montreal announced a $1-billion loss for 1992 and plans to cut 11,000 of its 32,000 employees.
Most at risk are middle managers and wellpaid but low-skilled assembly-line workers. And as those jobs disappear, many forecasters predict that the income gap between highly paid, highly skilled employees in such leadingedge sectors as computers and telecommuni-
cations, and less-educated workers who provide basic services to them will widen. For individuals, the implications are clear. Said Wayne Roth, director of labor-market outlook for Employment and Immigration Canada: “The days when you could have minimal skills and still haul down a good wage are gone.”
Both government and private employment forecasts show the impact of the underlying economic changes that are driving the shift in labor demand. A study, which Employment and Immigration Canada published last year, forecasts the growth in employment during the 1990s for a representative cross-section of 25 occupations. Topping the list were respiratory technicians and computer-systems analysts. Among the occupations at the bottom of the list, in which the study predicted employment would shrink, were assembly-line jobs in fishcanning and textile factories.
Recovery: Thousands of other jobs in the resource and manufacturing sectors will also disappear even if there is a strong recovery. Traditionally, companies in those areas have added to their workforces as recoveries have gained momentum. But now, executives say that because of technological innovations, they can increase production and reduce their payrolls at the same time. In the steel industry, for
one, producers have laid off almost 10,000 employees—a quarter of its workforce—since 1988. Roger Phillips, president of Reginabased steelmaker Ipsco Inc., said that those cuts will continue. He added, “Steel companies will be around for a long time, but they will use fewer employees to produce a ton of steel.” As well, large corporations in almost every sector are shedding layers of middle manage-
ment and contracting out the work of entire departments. Tammy Johns, director of Canadian operations for Manpower Temporary Services, said that one of the fastest-growing segments of her firm’s business is providing complete accounting or other services for clients, rather than just the odd temporary employee.
Just how easy it will be for displaced workers and other job seekers to retrain and find new jobs is the subject of heated debate. Nuala Beck, a Toronto management consultant and author of Shifting Gears-. Thriving in the New Economy, speaks often about what she calls “the $76 solution”—a basic personal computer skills course at a community college. She added: “There are plenty of other jobs in the New Economy even if you aren’t a computer programmer. Those companies have someone at the reception desk or on the loading dock.”
The federal government is also revamping its retraining policies to cope with the New Economy. Last December, Employment and Immigration Minister Bernard Valcourt committed $250 million over five years to form joint labor and management bodies in 55 industries—covering the entire non-government workforce— which assess skills requirements in those industries. The finance department, in turn, is designing tax incentives to encourage companies to spend more on training.
Union leaders and other experts, however, argue that it is extremely difficult to retrain many workers, particularly laid-off assemblyline employees with little formal education. Kevin Hayes, senior economist with the Canadian Labor Congress in Ottawa, said that, without a national industrial strategy, many of those workers will be left to fend for themselves in brutally competitive job markets. Said Hayes: “This notion that we’re all going to be involved in the high-value-added service economy just isn’t going to happen.” Instead, Hayes claimed that a growing proportion of the labor
`Success is no longer attached just to a management title. It's being a highly skilled employee.
force will drift into so-called Mcjobs (from McDonald’s) in menial service occupations.
Experts say that the best way for individuals to improve their chances of landing well-paying jobs is to continuously upgrade their qualifications. Employment and Immigration Canada’s Roth said that Canadians now entering the labor force will likely change jobs five to seven times during their working years, compared with two or three for their parents. That, he said, makes it important for students to acquire skills that can be used in a variety of jobs.
But even highly educated Canadians who have well-paid jobs in large corporations are under pressure to learn new work methods. IBM Canada Ltd. has cut 2,200 jobs from its payroll over the past two years and it is reorganizing the 10,000 that remain as part of a global shakeup by its troubled U.S.-based parent. Anita Ross, IBM Canada’s vice-president of human resources, said that one key initiative is “delayering.” She says that, on average, the company had nine administrative levels in individual departments. Now, the average is close to five. Management jobs are scarcer in the flattened structure. But Ross added: “Success is no longer attached just to a management title. It’s being a highly skilled employee.”
Teams: In IBM Canada’s software laboratory in the Toronto suburb of Don Mills, managers have organized about one-quarter of the 1,500 employees into small teams, each focused on a single project. Allen Class, 45, a mathematician and manager of team effectiveness at the laboratory, says that IBM has learned some lessons from its smaller—and often nimbler— rivals. “In the old days, so long as your piece was OK, you didn’t much care about how the whole project fit together,” Class said. “Now, everyone is focused on the same goal.”
The jobs of IBM’s sales representatives are also changing. The company is closing some of its large sales offices and encouraging employees to work at home or from clients’ premises instead. Nevil Knupp, a 32-year-old marketing representative based in Pickering, Ont., just east of Toronto, said that he likes those arrangements even though “you can feel a little disconnected from the company sometimes.” But he added: “It’s sort of the norm now.” Indeed, whether Canadians find that constant change is a frightening or welcome prospect, it is the only certainty in the New Economy.
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