After an incredible year of job creation growth and crushing historical unemployment records, the first month of 2023 showed no signs that the Canadian labour market is ready to slow down.
In the January labour report, Statistics Canada shared that another 150,000 jobs were added to the Canadian economy last month. There hasn’t been a single negative slip in job creation growth since September with cumulative gains now totalling 326,000.
These numbers came as a huge surprise as economists were expecting a moderate increase of 15,000 jobs and 0.1% increase to the unemployment rate. Meanwhile, massive technology layoffs throughout North America have had many speculating a shift in recruitment power dynamics in favour of employers.
The impact of technology layoffs
The growing number of technology layoffs reported since the beginning of the year have been jarring for many. Over 50,000 Canadian tech jobs have been cut in the last month, which at face value is incredibly alarming. However, many within the industry say the cause for concern may be overplayed.
In an email to The Globe and Mail, Jessy Bains, a LinkedIn news editor, said jobs related to technology still remain highly in demand. “When we hear about layoffs, we often see other tech companies swoop in and hire laid-off employees.”
Alex Zukin, managing director at Wolfe Research, suggests the layoffs were merely companies “right-sizing” their staff. Indeed, many of the big-name tech companies rapidly expanded during the pandemic due to the immediate need for hundreds of thousands of workers globally requiring transition from office to work from home settings.
In fact many large tech companies expanded their workforce by double or triple during the pandemic, and are now eliminating 5-10% of their overall workforce, which in many cases still leads to an overall net increase in the number of employees working for them.
Those with the tech skill set who have been laid off have also found new jobs with relative ease, albeit not necessarily at a similar tech behemoth. Aaron Terrazas, chief economist with GlassDoor told CBC “The tech skill set… is incredibly valuable, and so to some degree we are seeing tech become a little less techie and traditional companies become a little bit more techie.” So, while the MAMAA companies are cutting back, the smaller companies desperate for tech talent now have access to talent pools that were previously unobtainable.
What’s going on with the recession?
The short answer — nobody really knows. Economists are stumped, previous economic theories are being thrown out the window, and at this point many Canadians just feel confused.
Mark Carney, the former Bank of Canada governor, told the Financial Post, “One of the things you need in a crisis [is] to be straight with people about the scale of the issue.” He warned that although the numbers may not clearly indicate a recession, that is indeed where the economy is headed.
David Olive, a business columnist for Toronto Star, says that while decades-high interest rates have slightly suppressed consumer spending and business investment, it has yet to have any sort of meaningful impact. “Experts have been waiting for a significant drop in employment levels for some time, due mostly to those higher interest rates,” Olive writes. “But like Godot, it might never arrive.”
Meanwhile, Marwa Abdou with the Canadian Chamber of Commerce told CBC, “the strong job gains show that fears that Canada’s economy may be on the verge of a recession are overdone.”
How to navigate the continuously tight labour market
Prior to the start of the pandemic the typical number of job vacancies hovered around the half million mark. But now, since Q3 2021 that number of job vacancies has remained at nearly double, quarter after quarter with nearly one million job vacancies across Canada at any given time.
For employers that means that despite an increase to the population, and an increase to the number of people working in Canada, they still need to remain highly competitive to attract top talent.
Research from PwC released last year cited upskilling, personal flexibility and inclusion as key drivers for job seekers. In fact, the research reported “job seekers are willing to trade an average of 11.7% of their salary for training and flexibility” and “more than a third (37%) of candidates said they’d be willing to take a pay cut for a chance to learn new skills.”
Additionally, they found, “62% of job seekers said they’re more likely to apply for a job where a company is openly committed to improving diversity and inclusion in their workforce. That number jumps to 68% among knowledge workers and 72% among the C-suite.” Understanding what job seekers value and what they feel are negotiable are critical for employers dependent on employee acquisition for future growth.
The backbone of every successful organization lies in the strength of its employees. If you’re ready to transform your hiring and retention strategy reach out to us today. Our team is ready to provide you with in-depth knowledge on the world of work including employment trends, diversity and inclusion hiring practices, Canadian-focused salary guides, competitor analysis, and more. Bottom line – we minimize the uncertainty of recruiting in a tight candidate market.