As we step into a new year, businesses in Canada are reflecting on the nuanced and evolving scenario within Canada’s employment landscape in 2023. Does it offer any insights into what will the labour market, and the economy, look like in 2024? In our review of last month’s report, we observed that after the remarkable employment surge nationwide in 2022, 2023 appeared to be a year characterized by a sense of sluggishness. This was further cemented by Statistics Canada’s final labour report of the year, announcing an addition of a mere 100 jobs last month with the unemployment rate holding steady at 5.8%. Looking towards 2024, while reflecting on the labour reports of 2023, several underlying economic and policy realities within the employment landscape emerged, influencing job creation, demographic disparities, and overall workforce sentiment.
Employment landscape and hiring trends
While the unemployment rate remained stable, the employment rate saw a marginal decline of 0.2 percentage points to 61.6%. This change coincided with a population increase of 74,000 individuals aged 15 and older in December. Throughout 2023, the employment rate exhibited a downward trend due to population growth consistently outpacing the rate of employment gains. Meanwhile, job creation also decelerated in the latter half of 2023, with employers averaging 23,000 new positions monthly compared to the robust average of 48,000 monthly additions witnessed in the initial half of the year.
In December, the employment landscape saw notable fluctuations across various sectors. Professions in professional, scientific, and technical services witnessed a significant upsurge of 2.4%, adding 46,000 jobs. Health care and social assistance experienced a moderate increase of 0.6% (16,000 jobs). Interestingly, despite December’s traditionally high employment of seasonal workers, wholesale/retail trade and manufacturing reported declines of 0.7% (21,000 jobs) and 1.0% (18,000 jobs) respectively.
A noteworthy observation from the December labour report is the decline in the participation rate. While unemployment and employment held steady, the participation rate took a hit last month of 2.1%. At first glance, this doesn’t seem to be very much, but when we zoom out and look at the bigger picture, the figures hit a bit differently.
In December there were 1.2 million unemployed people in Canada – an increase of 202,000 (19.3%) compared with December 2022. This decline in the participation rate signals a shift in the job market dynamics, which could mean one of two things. It could indicate there is a reduced number of active individuals engaging in the workforce, leading to more challenges for employers in having a variety of talent to choose from in such areas as healthcare and engineering where we know workplace stress and retirement are impacting the number of available and experienced workers. Conversely, it could point towards challenges in finding employment for jobseekers, leading to increased competition for available positions. Which may be further exasperated by the ability for skilled immigrants to find suitable jobs in their field. Either option, or both, mean working with a recruitment firm is a smart strategy for finding, engaging, and hiring qualified candidates for 2024.
Racialized groups faced increased employment challenges in 2023
Amid the changing labour market dynamics of 2023, the challenges faced by racialized groups in employment became notably pronounced. In December, people belonging to racialized groups comprised 30.1% of the labour force, up from 28.5% in December 2022. As the labour market eased its previous tightness, racialized groups encountered a rise in their unemployment rates.
From December 2022 to December 2023, the unemployment rate rose 1.6 percentage points to 8.5% for core-aged (25-54 years old) Black Canadians. This was primarily attributed to a rise among core-aged men (+2.8% to 9.2%), as the unemployment rate held steady for core-aged women (7.8%). The steepest increase in unemployment rates came from Black Canadian youth, with an increase of 4.4 percentage points year-over-year up to 17.5%. This is a very large discrepancy compared to the unemployment rate for the total youth population participating in the labour force of 10.6%.
South Asian Canadians experienced a more minor raise in unemployment, climbing by 0.8 percentage points to 5.7%. This rate, alongside the youth employment rate for this group of 10.9% stands comparable to overall unemployment metrics regardless of demographic.
These findings underscore the imperative for heightened strategies aimed at fostering inclusivity and addressing barriers that disproportionately impact racialized groups in the job market. It accentuates the urgency for tailored recruitment approaches, initiatives promoting equal opportunity, and the nurturing of an inclusive work environment that champions diversity in all its facets.
Employee outlook and well-being in 2024
While employment numbers were at a standstill last month, Canadian HR Reporter reveals that Canadian workers’ overall happiness levels have been dropping since October. This decline in happiness levels has implications for employers aiming to maintain a positive work environment and retain talent. The reduced satisfaction, especially in key aspects like work-life balance and compensation, might prompt employers to reassess their employee value propositions and workplace policies. Our recruitment experts know what jobseekers are looking for and how you can attract an engaged and qualified talent pool, and can help you get started on refining yours.
Despite the dip in happiness levels, the Canadian HR Reporter offered insights into positive employee outlooks for 2024. Workers surveyed displayed optimism regarding manageable workloads and the possibility of taking time off. This presents an opportunity for employers to focus on facilitating a balanced workload and offering flexible arrangements, catering to employee well-being.
The evolving dynamics, especially regarding employees feeling optimistic about their workload in the new year, suggest a shift in employer-employee relationships. Employers can recognize this opportunity by emphasizing flexible work arrangements and demonstrating empathy towards employees' financial stress.
Moving forward and bridging the talent-opportunity gap
As we delve deeper into the Canadian labour market of 2024, it’s evident that navigating this landscape requires adaptability and a proactive approach. Employer and job seekers both seek meaningful connections and opportunities that align with their aspirations and organizational needs.
In this dynamic environment, collaboration is key. Employers and recruitment firms alike must collaborate to foster a more connected and forward-thinking work community. This involves strategizing to bridge the gap between talent and opportunity, prioritizing skills development and cultivating work cultures that value employee well-being.
In 2024, the importance of meaningful connections between talent and opportunities in the Canadian job market will become increasingly apparent. At Agilus, we foster these connections, embrace diversity, and promote inclusive work cultures. With over 47 years of recruitment experience, our national team of experts are primed to navigate the changing landscape, empowering employers to discover exceptional talent and guiding jobseekers towards their ideal opportunities. Take the pivotal first step toward success—reach out to us today, and together we can create a prosperous Canadian economy and inclusive workforce.