Underemployment among immigrants in Canada is a perennial problem, even though Canada relies on immigration to fuel its labour market and economy.
Many highly educated immigrants encounter significant hurdles in their quest to find jobs that match their qualifications.
The “Talent to Win” report, published in October 2024 by the Institute for Canadian Citizenship and Deloitte, addresses the significant issue of immigrant underemployment in Canada and its impact on immigrants and the broader Canadian economy. The report looks at the barriers facing immigrants and the benefits that could arise from addressing these challenges.
Canadian workplaces are criticized for their complacency, which stifles innovation and prevents the full integration of immigrants. There is a tendency to reject the fresh ideas that immigrants bring, particularly those from countries perceived as less developed than Canada.
Employers play a pivotal role in solving this issue, and their perspectives on underemployment reveal the obstacles and the potential upside of addressing it.
A Talent Mismatch
Many employers face skills shortages even when there are highly skilled immigrants, with overqualified immigrants often working lower-paying, unrelated jobs in key sectors to make ends meet. According to the report, participants noted that the lack of proper onboarding, training, and mentoring hinders immigrants’ retention and helps them succeed and advance within a new workplace.
Barriers to employment include difficulties in credential recognition, lack of Canadian work experience, language proficiency, and cultural integration. Employer bias is a significant factor, with some citing a misalignment between immigrant skills and job requirements.
By bridging this gap, employers have much to gain, as underemployment wastes talent instead of boosting productivity, innovation, and diversity. Canada faces labour shortages, particularly in healthcare, information technology, and skilled trades.
Barriers from an Employer’s Perspective
From an employer’s point of view, several obstacles hinder hiring immigrants for roles matching their qualifications.
Credential Recognition: Many employers are unfamiliar with them or are reluctant to risk hiring someone with credentials that are not fully understood. They struggle to assess foreign credentials and experience, particularly those from unfamiliar institutions. This leads to a preference for Canadian-educated individuals, further disadvantaging immigrants.
Workplace Disconnection: Employers may perceive immigrants as riskier hires because of a limited understanding of local business practices. Cultural differences in communication styles, leadership approaches, and team dynamics can create a disconnect.
According to the report, many employers believe that immigrant hires must integrate seamlessly into existing team cultures. But it is not as simple. For example, avoiding eye contact can create a disconnection, but in certain immigrant cultures, it is a sign of respect, while in Canada, it may be seen as rude. Immigrants are sometimes seen as less assertive than their Canadian counterparts, and this perception can lead to the loss of opportunities for personal growth.
Parts of Canada outside major urban centers are not accustomed to integrating immigrants, creating barriers to the successful hiring and retention of immigrants.
Employers who do not address the barriers miss out on significant economic benefits. Deloitte estimates that labour shortages cost Canada $54 billion in GDP in 2022, a shortfall that will persist until the country fully utilizes its human talent.
Practical Approach
Despite these challenges, several employers have demonstrated promising practices that successfully tap into immigrant talent:
- Cluster Hiring: This approach allows companies to hire groups of immigrants who speak the same language, bypassing language barriers while maintaining operational efficiency. This strategy was notably successful for a mid-sized company that hired single-language crews, leading to improved performance and growth.
- Holistic Family Support: Employers that provide support beyond the workplace—such as helping with school placements, childcare, and employment for spouses—see higher retention rates among immigrant employees. This holistic approach contributes to the overall well-being of immigrant families, making it easier for them to integrate and thrive.
- Data Collection and Success Sharing: Companies that collect data on immigrant employment and share success stories within their organizations inspire broader acceptance of immigrants’ value. This creates a culture that views immigrants as valuable assets rather than additional costs.
- Workforce Diversity: A senior HR leader from a major financial services company, an immigrant, looked closely at workforce diversity. The company collected data and found that despite the visual diversity of their workforce, new immigrants were underrepresented in their workplace; newcomers make up 25 percent of the population but represented just 20 percent of applicants and only 6 percent of hires.
- Specialized Immigrant Hiring Teams: Some large organizations have created specialized teams to handle immigrant recruitment, navigate immigration processes, and support newcomers throughout their employment. This ensures that the unique challenges of immigrant hiring are addressed at a higher, more expert level.
Opportunities for the Future
The report outlines several strategic opportunities address immigrant underemployment further:
Companies can better track immigrant underemployment by including country of origin and year of arrival in Diversity Equity and Inclusion (DEI) frameworks, providing more targeted solutions.
Employers must foster a culture of innovation and ambition to integrate immigrant talent fully. This includes encouraging hiring managers to think creatively about adapting workplaces to better use immigrants’ skills. While they are at it, employers should push for a more agile immigration system that better aligns with labour market needs and simplifies the hiring process for immigrants.
The report highlights the untapped potential of immigrant talent in Canada and the significant economic benefits that could arise from integrating immigrants into the workforce. By addressing systemic barriers, fostering a more ambitious and innovative workplace culture, and providing supporting immigrant employees, Canadian businesses can gain a competitive advantage and help drive national prosperity. The report offers a roadmap for employers to harness the power of immigrant talent with strategies that could transform their organizations and contribute to the broader Canadian economy.
