Palette Skills was days away from launching its latest pilot program when the COVID-19 pandemic hit Canada. With the markets nosediving and borders closing amid total economic uncertainty, the Toronto-based skills training non-profit’s efforts to anticipate the needs of a workforce in flux felt futile. 

Nearly five months after Palette called off that pilot program there are signs of an economic recovery, and the urgency to train Canadians for a transformed labour market has reached new heights. As private-sector companies and governments grapple with matching out-of-work Canadians with in-demand jobs, Palette co-founder Arvind Gupta says they’re overlooking candidates who can help scale tech firms and contribute to the broader recovery.

Palette is among the myriad public- and private-sector initiatives to tackle the growing skills gap—the problem of people without jobs and jobs without people, a byproduct of an economy shifting from resource extraction and manufacturing to information technology. 

According to Gupta, also a computer science professor at University of Toronto, we’re failing to resolve the mismatch because we’re approaching the problem wrong. While companies and governments often lament Canada’s tech talent shortage, Gupta says they’re not taking full advantage of “non-traditional” candidates. 

Palette’s main purpose is simple: to train those non-traditional candidates for jobs they want, but for which they don’t qualify on paper. Typically, these are applicants from the retail, manufacturing and hospitality sectors whose resumes are filtered out of the hiring process at tech firms and other well-paying companies. The way Gupta sees it, these are thousands of potential employees for Canadian companies facing the so-called talent shortage. 

“We looked at the fastest-growing tech cities in the U.S. and Canada, and we saw there was a pretty substantial profile difference of employees in the tech space,” he says. Compared to Canadian companies, Palette’s analysis found that tech firms in the U.S. had more non-technical core business employees relative to technical staff like software developers. And when Palette conducted a survey of 43 high-growth tech firms in Toronto before launching its first pilot, many respondents said they had trouble hiring business and sales talent, not just technical staff. 

The three-year-old organization’s programs have so far borne out its theories. In a pilot program launched last year, Palette recruited salespeople who worked outside tech, but were seeking jobs in the space. They ran 63 candidates through a two-week at-home training program focusing on B2B sales for information technology companies, followed by a week of what Gupta calls a “flipped co-op,” where potential employers came into Palette’s industrial training office and led case studies, or simulations of situations candidates would be expected to handle as employees. The approach gives employers the chance to learn how to train and work with new staff who don’t come from a tech background while giving jobseekers a better sense of what employers in the space are looking for. 

In the final three weeks of the program, candidates were out applying for jobs and working with Palette training staff on refining their interview skills. In the first cohort of the pilot, 85 per cent of graduates had a job offer after eight weeks; after six months, 100 per cent had at least one offer. Participants’ salaries, meanwhile, increased 23 per cent on average compared to their previous jobs. The second cohort saw similar outcomes at the six-month mark, with 95 per cent of participants landing a job. 

“I have companies asking me, ‘Why don’t these people apply for our jobs in the first place?’” says Gupta. “I tell them they do, but their HR processes are missing them and they don’t have the training mechanisms for them.” 

Riipen was one such company. The online education firm was having trouble finding enough sales talent with the requisite three to five years of tech experience. Since partnering with Palette in 2019, it’s hired five graduates from their programs. “In our experience, Palette further develops the transferable skills these candidates already have from different industries and really takes the time to get to know the organizations they work with, ensuring that companies like ours are able to access the right talent,” says Andrea Russell, Riipen’s director of people and culture. 

Gupta says many of the candidates that come to Palette have already tried other training programs—like night classes for coding or online marketing—that didn’t pay off. They often don’t; a review from Ontario’s auditor general found that fewer than 40 per cent of Employment Ontario clients landed full-time work after completing a training program in 2015-2016, and just 14 per cent had found what they considered a more suitable job or one in their field.

The problem, says Sunil Johal, a fellow at the Public Policy Forum and the Brookfield Institute (the latter is a founding partner of Palette’s), is that these programs tend to be too general and not geared toward a candidate’s specific needs for getting a specific job. 

In the wake of COVID-19, addressing those shortcomings is perhaps more pressing than ever. Canada’s jobless rate in July was 10.9 per cent, up from the 5.7 per cent rate in July 2019. And more than 8.5 million Canadians—over 22 per cent of the population—have applied for the Canada Emergency Response Benefit, a proxy for those who have lost their jobs during the pandemic. Canadian tech jobs have been somewhat insulated, with some sectors, including cleantech and biotech, growing their workforces during the pandemic. 

“I think the pandemic has really highlighted the significant gaps we have in terms of access to decent quality jobs,” says Johal. “Given the fact that we have so much uncertainty around economic recovery, you can expect a lot of firms are going to be very hesitant to bring on permanent, full-time staff with benefits and pensions. They’re much more likely to opt for the contract, temporary gig-worker model instead. That adds further elements of precarity to the labour market. 

“Against that backdrop, it becomes even more important for us to make sure that we’ve got a robust universal skills-training system,” he says. 

Palette is now planning to launch its pilot in October, armed with new intel on what skills companies need to recover from pandemic. The program, fuelled by a grant of up to $5 million from FedDev Ontario, will focus on training job seekers in Windsor-Essex and Durham, Ont. for positions in the regions’ evolving labour markets. The organization is starting with one cohort of about 25 participants and plans to run “several” more of a similar size thereafter. 

Johal says Palette’s approach to training and upskilling is promising in that it’s laser-focused on outcomes: getting candidates good jobs. But the organization’s capacity is limited. It will have trained fewer than 200 people by the time its next pilot ends this fall. Palette alone will not close the skills gap; governments and employers themselves need to increase their spending on training workers and jobseekers, says Johal. 

Gupta hopes the private sector will themselves adopt what Palette is doing to train prospective workers. “What I wouldn’t want is Palette to become just a delivery agent for all these skills. But this idea of taking non-traditional people who we think can do the job—nothing like that exists right now, so we need to stimulate the space,” says Gupta. “We’ve already had someone ask us about starting a company doing what we’re doing. I said that would be fantastic—it means we don’t have to do it.”