Issue
Every year, Canada’s economy looses between two and three billion dollars due to underemployment of its recent immigrants. Their underemployment is a fact despite of their higher education levels compared to their Canadian born colleagues.
This Briefing Note analyses the failures of economic integration of immigrants to Canada and brings out some reasons why they face such a high level of underemployment in Ottawa, in particular. Written from the premise that integration means “to put together parts or elements and combine them into a whole”, as the Latin root of the word integratus means to make whole, this Briefing Note defines integration as a two-way-street. This means that while immigrants become more Canadian and take over Canadian values, the Canada should be willing to adopt new qualities from the newcomers in return, too.
On that reason, this Briefing Note highlights that the underemployment of new Canadians is a cause of both: the lack of immigrants’ language or soft skills … and the exclusive culture and discriminatory hiring practices of Canadian work places. This Briefing Note concentrates on Canadian recruitment methods and it views the preference of soft skills over technical skills as one of the reasons why immigrants’ skills and education is not transformed into Canadian economy.
Background
While immigrants have higher education levels, they earn significantly less than their Canadian born colleagues. Immigrants’ salary is 68 percent of the average income of Canadian-born households despite the fact that 79 percent of women and 86 percent of men possess a university degree prior to arrival – a much higher rate than Canadian born Canadians.
Not only do they earn less, the foreign trained professionals also work on the fields for which they are grossly overeducated. Several studies have shown that urban myths of taxi driving immigrant doctors, architects and engineers are true. The Globe and Mail wrote recently, that of 50,000 taxi drivers questioned in Canada, 200 were foreign-trained doctors or had PhDs, compared with just 55 of their Canadian-born counterparts. 20 percent have undergraduate university degrees or Master’s, compared with four percent of Canadian-born drivers.
The Globe and Mail writes: “In the late 1970s, immigrants earned about 85 to 90 per cent of what the Canadian-born Canadians earned. By 2006, that figure had fallen closer to 60 per cent according to a recent study from the Institute for Research on Public Policy. Although employment rates tend to catch up within five to 10 years, it's taking longer and longer for wages to match.”
This brief pays particular attention to Ottawa, the second largest destination city for immigrants in Ontario, and with the fastest-growing immigrant populations in the world. Every year, thousands of people from countries around the world move to Canada’s capital city. Yet due to its status as a federal government town with some high tech-industry, employment is newcomers’ number one concern. The federal government – the city’s top employer in the town - sets requirements for citizenship, bilingualism of French and English and security clearances. Due to this triple constraint immigrants are less competitive in this job market. In fact, this prevents them entering a large part of Ottawa job market altogether, regardless of their level of education, knowledge of other languages than English and French, and experience in the field.
The data in City of Ottawa website Ottawa Facts displays 48 percent difference in wages – well below Canadian average wage gap of 60 per cent – in income for a male with a university degree in 2005. The website declares: “Recent immigrant earnings for a male with university degree: $30,322, whereas an average earnings for a Canadian-born male with university degree: $62,566.”
This indicates that despite attracting relatively large portion of educated immigrants, Ottawa city remains a place where newcomers’ participation in labour market is hindered and their knowledge and skills are not translated into monetary value.
Costs and benefits of immigrants
For one, there is a cost associated with the loss of skills and input to economy – up to three billion dollars as mentioned at the beginning of this Briefing Note. Secondly, there is cost for government looking after underemployed people. The federal government spends $883-million per year on services, and each province contributes its own, smaller share. As a recent Fraser Institute study argued – by consuming government services (be these settlement services or free health care), immigrants impose a burden of about $6,000 each[1]. This means that underemployed immigrants consume more in services than they pay in taxes or benefit the economy.
Not only do they earn less, the foreign trained professionals also work on the fields for which they are grossly overeducated. Several studies have shown that urban myths of taxi driving immigrant doctors, architects and engineers are true. The Globe and Mail wrote recently, that of 50,000 taxi drivers questioned in Canada, 200 were foreign-trained doctors or had PhDs, compared with just 55 of their Canadian-born counterparts. 20 percent have undergraduate university degrees or Master’s, compared with four percent of Canadian-born drivers.
The Globe and Mail writes: “In the late 1970s, immigrants earned about 85 to 90 per cent of what the Canadian-born Canadians earned. By 2006, that figure had fallen closer to 60 per cent according to a recent study from the Institute for Research on Public Policy. Although employment rates tend to catch up within five to 10 years, it's taking longer and longer for wages to match.”
This brief pays particular attention to Ottawa, the second largest destination city for immigrants in Ontario, and with the fastest-growing immigrant populations in the world. Every year, thousands of people from countries around the world move to Canada’s capital city. Yet due to its status as a federal government town with some high tech-industry, employment is newcomers’ number one concern. The federal government – the city’s top employer in the town - sets requirements for citizenship, bilingualism of French and English and security clearances. Due to this triple constraint immigrants are less competitive in this job market. In fact, this prevents them entering a large part of Ottawa job market altogether, regardless of their level of education, knowledge of other languages than English and French, and experience in the field.
The data in City of Ottawa website Ottawa Facts displays 48 percent difference in wages – well below Canadian average wage gap of 60 per cent – in income for a male with a university degree in 2005. The website declares: “Recent immigrant earnings for a male with university degree: $30,322, whereas an average earnings for a Canadian-born male with university degree: $62,566.”
This indicates that despite attracting relatively large portion of educated immigrants, Ottawa city remains a place where newcomers’ participation in labour market is hindered and their knowledge and skills are not translated into monetary value.
Costs and benefits of immigrants
For one, there is a cost associated with the loss of skills and input to economy – up to three billion dollars as mentioned at the beginning of this Briefing Note. Secondly, there is cost for government looking after underemployed people. The federal government spends $883-million per year on services, and each province contributes its own, smaller share. As a recent Fraser Institute study argued – by consuming government services (be these settlement services or free health care), immigrants impose a burden of about $6,000 each[1]. This means that underemployed immigrants consume more in services than they pay in taxes or benefit the economy.
However, one of the benefits of immigrants’ full integration and inclusion to job market is enhanced innovation. A Conference Board of Canada study found that immigrants make up 35 per cent of university research chairs in Canada, much higher than their 20 per cent share of the population. Considering Canada ranks well below its peers - 14th out of 17 countries - in innovation rankings, Canada could turn to its underemployed immigrants for innovating ideas. The research Conference Board of Canada carried out was titled ‘Immigrants as Innovators: An Element of Canada's Strategy for Global Competitiveness’ and it described how by hiring immigrants organisations like St. Michael's Hospital and Xerox Research Centre of Canada were able to create high-performing, diverse workplaces.
If diversity is the key ingredient to innovation like the CEO of Xerox Research Centre Mr. Hadi K. Mahabadi claims in his e-presentation Translating Diversity into Business Advantage, why then the skills and education of newcomers is not translated into their full engagement to the job market, which would boost economy and innovation in particular?
The problem of immigrant underemployment indicates two sides to the issue. On one hand, it involves immigrants who are viewed to be ill suited to the Canadian job market. This view holds that they lack necessary skills and their credentials are of lower level than the Canadian equivalents. On the other hand, underemployment problem can be attributed to employers who are not hiring professionals trained abroad, either out of ignorance or reluctance.
In the past, almost exclusively the training efforts and awareness campaigns were directed towards immigrants: multiple immigrant centers or the so-called settlement programs were brought to existence to teach immigrants about Canadian job market, about Canadian soft skills and Canadian ways of interviewing. Some of the examples of skills being taught in the mission civilisatrice were, for example, how far to stand from a person when shaking hands and how loud voice should be used in the workplace (sic!).
Till 2006, there were no awareness campaigns directed towards employers, which would explain the benefits of hiring immigrants. Then, a local initiative was launched in Ottawa, titled Hire Immigrants Ottawa (HIO). The goal of the “community-based campaign that brings together employers, immigrant agencies and stakeholders” was “to identify and address barriers faced by employers in the hiring and integration of skilled immigrants into the labour force”.
The HIO’s objective is to “increase the capacity of employers in the Ottawa region to effectively integrate skilled immigrants into the local workforce”. One of the justifying arguments to target employers was indeed a necessity to shift the focus away from immigrants, who already receive Canadian culture and job search related trainings to employers. Local companies and enterprises have rarely been targeted or briefed about the possible value added by hiring immigrants in a systemic way.
As HIO states in their website, the goal of this campaign is being achieved through addressing systemic barriers in job market sectors and raising local awareness in order to promote greater understanding of the social and economic value that immigrants bring to Ottawa.
Canadian hiring practices are the obstacle
What blocks the newcomers from being hired? In the words of one immigrant entrepreneur: immigrants come to Canada with the 90 percent of technical skills and 10 percent of soft skills, because this is how Canada chooses its immigrants. On the other hand, the Canadian employers are looking for 60 percent of soft skills and 40 percent of technical skills. The recruiters value skills like positive attitude and motivation, passion, accountability and responsibility.
Respectively – people who succeed to demonstrate those skills during interviews get hired. Survey on skills and attributes reveal that recruiters’ hiring decisions indeed come down to what candidate has the greatest soft skills.
Evidence from a study made by professor Oreopoulos indeed suggested significant discrimination by name ethnicity and city of experience. In further analysis, Oreopoulos, P., and Dechief, D. asked: Why do some employers prefer to interview Matthew, but not Samir? They asked recruiters to explain why they believed name discrimination occurs in the labour market. Overwhelmingly, they responded that employers often treat a name as a signal that an applicant may lack critical language or social skills for the job. Also, pressure to avoid bad hires exacerbates these effects, as does the need to review resumes quickly, authors suggested (my emphases).
The result of their experiment showed: applicants with English-sounding names received call-backs 40 percent more often than applicants with Chinese, Indian, or Pakistani names. This made authors to recommend a policy option to mask names before making initial interview decisions. They also found that many employers’ unconditional concerns are based on real productivity worries.
From those study results, we can conclude that one of the reasons why the skills of newcomers do not find their match in the job market is Canadian hiring standards, unwilling to accept innovative and foreign ideas. These are feared to be conflicting with Canadian views. Consequently, it seems that being nice, which is considered to be an icon characteristic of Canadians, hinders both economy and innovation through excluding otherness and new ideas from the work places.
Considering this Briefing Note is written from the premise that integration only happens if two sides of the issue change in order to become a whole, Canada would be able to boost its innovation ranking, benefit its economy, and reduce the costs of looking after unemployed and underemployed immigrants, if only the Canadian recruiters changed their recruitment practices to be more inclusive. In this context, being inclusive means changing and giving up Canadian work style, the preferences for “nice” colleagues, and respectively adopting willingness to debate and adopt different work and communication styles.
As the data above showed, the preference of soft skills over technical skills has indirectly led to an outcome, which costs Canadian economy three billion dollars annually.
Policy option – change hiring practices and Canadian work culture
This brief will present one original option for policy in response that problem. In addition to endorsing masking the names of the job applicants before making interviewing decision, it recommends consciously changing Canadian work culture where a concept of functional conflict is used to enhance open discussion in the Canadian workplaces. Functional conflict is a tool to improving both the effectiveness of a group, the quality of decisions, and it will stimulate creativity and innovation in the workplaces.
Functional conflict needs to be distinguished from the dysfunctional conflict, which is not leading to innovative ideas and is often caused by a destructive conflict between clashing personalities. In the studies of organisational behaviour, functional conflict, on the other hand is seen to be constructive when low to medium level of conflict is channelled carefully towards challenging the prevailing groupthink.
The main aim of the new way of conflict management is to improve effectiveness of the group or a team. Functional conflict provides a medium through which problems can be aired and tensions released and it fosters an environment of self-evaluation and change. Functional conflict is the antidote for prevalent groupthink in teams, which are concerned by maintaining a nice and cozy work atmosphere. This type of functional conflict challenges the status quo and therefore furthers the creation of new ideas, promotes reassessment of group goals and activities, and increases the probability that the group will respond to an organisational change.
Therefore, based on the current 60-40 division of skills preference in favour of soft skills, it is fair to conclude that the main goal of Canadian recruiters does not seem to be to enhance efficiency, boost innovation or include otherness to the workplace. The Canadian value to avoid conflicts at any cost seem to exclude everyone from the job market who fails to demonstrate Canadian standards of niceness.
Xerox Research Centre of Canada has embraced workplace diversity, in order to translate diversity into advantage. Hadi Mahabadi, Vice President claims in The Conferenceboard case study Case Study: Immigration, Innovation, and Success in Canada for example that diversity is the key ingredient to innovation and productivity. All employees in the organisation have be educated about added value and diversity principals are taught in all levels of management. In addition, their experience is continually develop strategies to gain business advantage through diversity. He even claims that even those organisations, which are not technology-based, should embrace diversity, as innovation is very important in succeeding. This includes including diversity in race, gender, ethnicity, generation, physical capabilities, sexual orientation, and social and political views. The result is in total over 1450 patents, over 1000 publications, five new technologies delivered to market in a year and a recognition of being a top ten best places to work in Canada.
Even the federal government – the main employer in Ottawa, which automatically sets triple constraints to newcomers’ ability to compete for jobs, should be able to use hiring system where applicants’ names are masked, providing they have acknowledged the value added by foreign born employees. This possible change of recruitment practices would be extended to the Co-operative Education programs in universities, a channel through which the federal government seeks new employers. Additionally, the Co-op programs should have awareness campaigns for federal employers and inform them of increasingly multicultural origin of their students.
Conclusion
Based on the premise of current Briefing Note according to which successful integration of newcomers depends partially on Canada’s ability to change its traditional ways of being Canadian, this paper offered an unconventional policy option. It advised to adopt new conflict resolution culture and skills in workplaces (and in universities). The aim would be to challenge the current ways of recruitment, making sure that difference in views is valued not excluded by name- and origin-based discrimination.
Preference of soft skills in team selection (or ‘operationalized niceness’) indirectly leads, as demonstrated above in this Brief, to the underemployment of immigrants, loss in tax revenue, low productivity, low rank in comparative innovation rates and low economic growth. TD Bank economists for example estimated that if immigrants were employed at the same level as established Canadians, there would be about 370,000 extra people at work. In a country, which anticipates a labour shortage as the population ages, efficient immigration is considered one of the keys to addressing labour needs.
If diversity is the key ingredient to innovation like the CEO of Xerox Research Centre Mr. Hadi K. Mahabadi claims in his e-presentation Translating Diversity into Business Advantage, why then the skills and education of newcomers is not translated into their full engagement to the job market, which would boost economy and innovation in particular?
The problem of immigrant underemployment indicates two sides to the issue. On one hand, it involves immigrants who are viewed to be ill suited to the Canadian job market. This view holds that they lack necessary skills and their credentials are of lower level than the Canadian equivalents. On the other hand, underemployment problem can be attributed to employers who are not hiring professionals trained abroad, either out of ignorance or reluctance.
In the past, almost exclusively the training efforts and awareness campaigns were directed towards immigrants: multiple immigrant centers or the so-called settlement programs were brought to existence to teach immigrants about Canadian job market, about Canadian soft skills and Canadian ways of interviewing. Some of the examples of skills being taught in the mission civilisatrice were, for example, how far to stand from a person when shaking hands and how loud voice should be used in the workplace (sic!).
Till 2006, there were no awareness campaigns directed towards employers, which would explain the benefits of hiring immigrants. Then, a local initiative was launched in Ottawa, titled Hire Immigrants Ottawa (HIO). The goal of the “community-based campaign that brings together employers, immigrant agencies and stakeholders” was “to identify and address barriers faced by employers in the hiring and integration of skilled immigrants into the labour force”.
The HIO’s objective is to “increase the capacity of employers in the Ottawa region to effectively integrate skilled immigrants into the local workforce”. One of the justifying arguments to target employers was indeed a necessity to shift the focus away from immigrants, who already receive Canadian culture and job search related trainings to employers. Local companies and enterprises have rarely been targeted or briefed about the possible value added by hiring immigrants in a systemic way.
As HIO states in their website, the goal of this campaign is being achieved through addressing systemic barriers in job market sectors and raising local awareness in order to promote greater understanding of the social and economic value that immigrants bring to Ottawa.
Canadian hiring practices are the obstacle
What blocks the newcomers from being hired? In the words of one immigrant entrepreneur: immigrants come to Canada with the 90 percent of technical skills and 10 percent of soft skills, because this is how Canada chooses its immigrants. On the other hand, the Canadian employers are looking for 60 percent of soft skills and 40 percent of technical skills. The recruiters value skills like positive attitude and motivation, passion, accountability and responsibility.
Respectively – people who succeed to demonstrate those skills during interviews get hired. Survey on skills and attributes reveal that recruiters’ hiring decisions indeed come down to what candidate has the greatest soft skills.
Evidence from a study made by professor Oreopoulos indeed suggested significant discrimination by name ethnicity and city of experience. In further analysis, Oreopoulos, P., and Dechief, D. asked: Why do some employers prefer to interview Matthew, but not Samir? They asked recruiters to explain why they believed name discrimination occurs in the labour market. Overwhelmingly, they responded that employers often treat a name as a signal that an applicant may lack critical language or social skills for the job. Also, pressure to avoid bad hires exacerbates these effects, as does the need to review resumes quickly, authors suggested (my emphases).
The result of their experiment showed: applicants with English-sounding names received call-backs 40 percent more often than applicants with Chinese, Indian, or Pakistani names. This made authors to recommend a policy option to mask names before making initial interview decisions. They also found that many employers’ unconditional concerns are based on real productivity worries.
From those study results, we can conclude that one of the reasons why the skills of newcomers do not find their match in the job market is Canadian hiring standards, unwilling to accept innovative and foreign ideas. These are feared to be conflicting with Canadian views. Consequently, it seems that being nice, which is considered to be an icon characteristic of Canadians, hinders both economy and innovation through excluding otherness and new ideas from the work places.
Considering this Briefing Note is written from the premise that integration only happens if two sides of the issue change in order to become a whole, Canada would be able to boost its innovation ranking, benefit its economy, and reduce the costs of looking after unemployed and underemployed immigrants, if only the Canadian recruiters changed their recruitment practices to be more inclusive. In this context, being inclusive means changing and giving up Canadian work style, the preferences for “nice” colleagues, and respectively adopting willingness to debate and adopt different work and communication styles.
As the data above showed, the preference of soft skills over technical skills has indirectly led to an outcome, which costs Canadian economy three billion dollars annually.
Policy option – change hiring practices and Canadian work culture
This brief will present one original option for policy in response that problem. In addition to endorsing masking the names of the job applicants before making interviewing decision, it recommends consciously changing Canadian work culture where a concept of functional conflict is used to enhance open discussion in the Canadian workplaces. Functional conflict is a tool to improving both the effectiveness of a group, the quality of decisions, and it will stimulate creativity and innovation in the workplaces.
Functional conflict needs to be distinguished from the dysfunctional conflict, which is not leading to innovative ideas and is often caused by a destructive conflict between clashing personalities. In the studies of organisational behaviour, functional conflict, on the other hand is seen to be constructive when low to medium level of conflict is channelled carefully towards challenging the prevailing groupthink.
The main aim of the new way of conflict management is to improve effectiveness of the group or a team. Functional conflict provides a medium through which problems can be aired and tensions released and it fosters an environment of self-evaluation and change. Functional conflict is the antidote for prevalent groupthink in teams, which are concerned by maintaining a nice and cozy work atmosphere. This type of functional conflict challenges the status quo and therefore furthers the creation of new ideas, promotes reassessment of group goals and activities, and increases the probability that the group will respond to an organisational change.
Therefore, based on the current 60-40 division of skills preference in favour of soft skills, it is fair to conclude that the main goal of Canadian recruiters does not seem to be to enhance efficiency, boost innovation or include otherness to the workplace. The Canadian value to avoid conflicts at any cost seem to exclude everyone from the job market who fails to demonstrate Canadian standards of niceness.
Xerox Research Centre of Canada has embraced workplace diversity, in order to translate diversity into advantage. Hadi Mahabadi, Vice President claims in The Conferenceboard case study Case Study: Immigration, Innovation, and Success in Canada for example that diversity is the key ingredient to innovation and productivity. All employees in the organisation have be educated about added value and diversity principals are taught in all levels of management. In addition, their experience is continually develop strategies to gain business advantage through diversity. He even claims that even those organisations, which are not technology-based, should embrace diversity, as innovation is very important in succeeding. This includes including diversity in race, gender, ethnicity, generation, physical capabilities, sexual orientation, and social and political views. The result is in total over 1450 patents, over 1000 publications, five new technologies delivered to market in a year and a recognition of being a top ten best places to work in Canada.
Even the federal government – the main employer in Ottawa, which automatically sets triple constraints to newcomers’ ability to compete for jobs, should be able to use hiring system where applicants’ names are masked, providing they have acknowledged the value added by foreign born employees. This possible change of recruitment practices would be extended to the Co-operative Education programs in universities, a channel through which the federal government seeks new employers. Additionally, the Co-op programs should have awareness campaigns for federal employers and inform them of increasingly multicultural origin of their students.
Conclusion
Based on the premise of current Briefing Note according to which successful integration of newcomers depends partially on Canada’s ability to change its traditional ways of being Canadian, this paper offered an unconventional policy option. It advised to adopt new conflict resolution culture and skills in workplaces (and in universities). The aim would be to challenge the current ways of recruitment, making sure that difference in views is valued not excluded by name- and origin-based discrimination.
Preference of soft skills in team selection (or ‘operationalized niceness’) indirectly leads, as demonstrated above in this Brief, to the underemployment of immigrants, loss in tax revenue, low productivity, low rank in comparative innovation rates and low economic growth. TD Bank economists for example estimated that if immigrants were employed at the same level as established Canadians, there would be about 370,000 extra people at work. In a country, which anticipates a labour shortage as the population ages, efficient immigration is considered one of the keys to addressing labour needs.
Instead of shying away from debate and contradictory arguments, Canadians should learn to distinguish between functional and dysfunctional conflict and embrace the former as a tool to finding solutions to complicated challenges being brought into existence by increasingly global economy and globalized workforce.
Although the likelihood of success rate ordinary Canadians embracing functional conflict-prone identity is low, nevertheless, the department of Human Resources and Skills Development could take a leading role in this issue and advise the recruiters about the added benefits. Some Canadian companies have demonstrated their success in doing so, and their experience is that for this strategy to be effective, it needs to have executive level commitment first.
Referring to empirical evidence regards to achieving success through conscious diversity policies in Canadian companies like Xerox Research Centre and St. Michael's Hospital will help to achieve a gradual change in recruitment practices. Hopefully, the increased economic growth and higher position in innovation rankings will convince not only Canadian companies but also federal government to consciously include newcomers into their workforce.
-xxx-
[1] Economists Krishna Pendakur and Mohsen Javdani argue the amount is closer to $450. Each side disputes the other's methods. Source: The Globe and Mail, May 9, 2012.
Although the likelihood of success rate ordinary Canadians embracing functional conflict-prone identity is low, nevertheless, the department of Human Resources and Skills Development could take a leading role in this issue and advise the recruiters about the added benefits. Some Canadian companies have demonstrated their success in doing so, and their experience is that for this strategy to be effective, it needs to have executive level commitment first.
Referring to empirical evidence regards to achieving success through conscious diversity policies in Canadian companies like Xerox Research Centre and St. Michael's Hospital will help to achieve a gradual change in recruitment practices. Hopefully, the increased economic growth and higher position in innovation rankings will convince not only Canadian companies but also federal government to consciously include newcomers into their workforce.
-xxx-
[1] Economists Krishna Pendakur and Mohsen Javdani argue the amount is closer to $450. Each side disputes the other's methods. Source: The Globe and Mail, May 9, 2012.
