As we move further into 2025, industries like healthcare, technology, and construction face a critical challenge: skills gaps and talent shortages. Despite an increase in job opportunities, many organizations struggle to find candidates with the right mix of technical expertise, hands-on experience, and soft skills.
To stay competitive, Canadian employers need effective strategies to attract, develop, and retain top talent. Here’s how to address the skills gap and solve the ongoing talent shortage in 2025.
What’s Causing Skills Gaps in Canada?
Several key factors are contributing to the growing skills gap and labour shortages across Canadian industries:
- Rapid Technological Change:
The fast pace of digital transformation means new roles in AI, cybersecurity, and automation are emerging faster than workers can acquire the necessary skills. A report by the C.D. Howe Institute highlights that these gaps occur when there's an imbalance between the digital skills the workforce possesses and the skills employers need, making it challenging for employers to find candidates with the required expertise. - An Aging Workforce:
Retirements in sectors like skilled trades and healthcare are creating talent gaps as experienced workers leave the workforce faster than new talent enters. The Ivey Group notes that as the older generation retires, their expertise leaves a void that needs skilled successors. - Evolving Job Requirements:
Many jobs now require a combination of technical skills and soft skills like problem-solving and adaptability—skills not always taught in traditional education systems. Talent Canada emphasizes that the rapid pace of technological change outstrips the education system's ability to adapt, leading to a mismatch between the skills taught and those required by employers. - Barriers for Underrepresented Talent:
Systemic barriers limit access to opportunities for newcomers, Indigenous communities, and people with disabilities, narrowing the talent pool further. Underrepresented groups often face challenges related to bias in hiring practices, lack of inclusive workplace policies, and limited access to skills development programs, all of which contribute to persistent labour shortages.
Skills-Based Hiring: A Proven Solution for Talent Shortages
One of the most effective ways to address the skills gap is through skills-based hiring. This approach focuses on evaluating candidates based on their abilities and potential rather than just formal education or traditional job titles.
In an interview with The Globe and Mail, Agilus CEO Craig Brown highlighted the importance of this shift:
“When we focus on what candidates can do instead of just where they’ve been, we open doors to untapped talent pools and create more equitable hiring opportunities.”
— Craig Brown, CEO, Agilus
Skills-based hiring helps employers:
- Identify candidates with transferable skills from non-traditional backgrounds
- Promote diversity and inclusion through unbiased hiring practices
- Fill roles faster by focusing on essential job competencies
6 Strategies to Close the Skills Gap and Solve Talent Shortages
1. Strengthen Your Employer Brand to Attract Top Talent
A strong employer brand helps companies stand out in a competitive job market. Job seekers are more likely to apply to organizations known for positive workplace culture, professional growth opportunities, and strong leadership.
Pro Tip: Showcase employee success stories, promote your company culture on LinkedIn, and highlight your values in job postings to attract qualified candidates.
2. Use Targeted Recruitment Strategies
Generic job ads no longer cut it. Targeted recruitment focuses on reaching specific talent pools with the right skills for your open roles.
Pro Tip: Write clear, concise job descriptions that focus on key competencies to attract a wider range of qualified candidates.
3. Invest in Upskilling and Reskilling Programs
Instead of competing for a limited talent pool, many employers are investing in upskilling and reskilling their current workforce to meet evolving business needs.
Pro Tip: Conduct regular skills assessments to identify gaps and create personalized development plans for employees.
4. Partner with Communities and Recruitment Firms to Build Talent Pipelines
Creating strong partnerships with colleges, universities, technical schools, and recruitment firms can help you develop a long-term talent pipeline. Recruitment firms offer valuable insights into current market trends, in-demand skills, and access to diverse candidate pools, helping bridge the gap between education and employment.
Pro Tip: Collaborate with both educational institutions and recruitment firms to align academic programs with real-world industry needs, ensuring graduates are job-ready and connected to employers actively seeking their skills.
5. Offer Flexible Work Models to Expand Talent Pools
Flexible work arrangements—like remote work, hybrid schedules, and flexible hours—can help you tap into a broader talent pool beyond your local area.
Pro Tip: Consider implementing “returnship” programs to help professionals re-enter the workforce after a career break.
6. Focus on Employee Retention to Reduce Turnover
Solving the skills gap isn’t just about hiring—it’s also about retaining top talent. High turnover exacerbates labour shortages, making employee retention strategies critical.
Pro Tip: Conduct regular employee feedback surveys to identify issues early and foster a culture of continuous improvement.
Building a Future-Ready Workforce in Canada
Closing Canada’s skills gaps and labour shortages requires a proactive approach. As Craig Brown of Agilus highlights, skills-based hiring is key to business growth.
By investing in your employer brand, developing talent from within, and fostering inclusive hiring practices, you can build a resilient, future-ready team.
Need help bridging the skills gap? Agilus helps Canadian employers attract, engage, and retain top talent in today’s competitive job market. Visit our website to speak with an Agilus recruitment expert.
