Understanding the ever-changing dynamics of Canada’s labour force is critical for our organization, which is why every month we share findings from Statistics Canada’s monthly Labour Report. While last year we saw record-breaking lows for unemployment and record-breaking highs for inflation, the most recent report reveals a stable yet evolving employment landscape in Canada. The overall employment figures remained relatively unchanged, however, the report highlights shifts in employment across various demographics, a rise in unemployment and wage growth, and a potentially promising future for post-secondary students.
The available job pool shallows, while the talent pool grows deeper
Last month, Canada experienced a softening within the employment market with a loss of 6,000 jobs, causing the unemployment rate to rise to 5.5%. This moves the unemployment rate far closer to pre-pandemic rates, with an average unemployment rate of 5.9% representing the 2010s. Despite the softening labour market, the Canadian economy has shown resilience throughout the year, boasting an average monthly employment growth of 22,000.
Concurrently, Canada’s labour force participation continues to grow, bolstered in part by strong immigration. Unfortunately, newly landed immigrants are not experiencing as much success in job seeking as they were a year ago. In July, the employment rate of “core-aged” (25 to 54 years old) recent immigrants was 77.7% - down 2.3 percentage points from July 2022 (80%).
Meanwhile, among core-aged men, there was a decline in employment by 27,000 jobs (-0.4%). On the other hand, male youth (15 to 24 years old) experienced an increase of 13,000 jobs (+0.9%). Young women's employment held steady, similarly core-aged women experienced little change in employment.
With job vacancies declining, this presents a challenge for the economy to absorb the expanding workforce. For employers however, for the first time since the pandemic, this opens avenues to access a more diverse talent pool with varied skills and experiences.
Interest rates and wage growth on the radar
With the evolving labour market, Canadians can’t help but wonder what this means when it comes to the future of interest rates. While last month’s increase in the supply of jobs also led to another rate hike, indications suggest a pause in the rate hike campaign may be imminent. While higher interest rates aim to control inflation, it is essential to comprehend their potential impact on job creation and consumer spending.
Amidst these changes, the average hourly wage for permanent employees experienced a commendable 5% year-over-year increase. However, this pace of wage growth has tempered in recent months, signally a potential ebb in inflationary pressures. It’s important that employers continue to remain competitive with an attractive EVP and salary to continue attracting and retaining top talent during these transitional times.
Summer students chart their course for the future
For post-secondary students, summer jobs are all about picking up specialized skills and making professional connections that can help them transition into their careers. Last month, Statistics Canada collected data on what it’s like for these employed students. Among these workers, approximately 31% reported being engaged in employment closely aligned with their field of study. This figure notably rises among full-time postsecondary students who indicated that they do not intend to resume their studies in the fall or remain uncertain about their enrollment, reaching a proportion of 48.1%. This discernible trend suggests that non-returning students are actively pursuing job opportunities that correspond to their academic pursuits and are questioning the value post-secondary education can offer compared to work experience in their chosen field.
While not all post-secondary students were engaged in positions directly related to their course of studies, a substantial proportion of them still benefited from informal training opportunities. These informal learning experiences encompass onboarding programs and job shadowing. In June of this year, a whopping 82% of paid employees aged 18-24 who had pursued post-secondary education since January acknowledged having received informal training within the context of their employment. So even if the job wasn’t exactly spot-on with their studies, they were still picking up valuable skills.
Employers are smart to hire students, among those who had jobs that closely matched their field of study, 62.3% said they’d stick with the same employer after they finished their studies. This offers a clear opportunity for businesses to build employer brand preference early in a student’s career. Further the retention rates for students employed in roles somewhat related to their studies and those with jobs entirely unrelated to their academic pursuits stood at 32.1% and 11.1%, respectively.
Additionally, student employees who benefited from informal training demonstrated a heightened inclination (32.6%) to remain with their current employer compared to their counterparts who did not partake in such training (16.9%). These findings suggest that employers can strategically leverage student hires to identify, recruit, and retain talented individuals for future workforce needs.
Looking Forward
While the overall employment figures show stability, there are underlying shifts that demand attention. The softening labour market and rising unemployment rate present challenges for job seekers, while employers face the opportunity to tap into a diverse talent pool with the expanding workforce. However, certain industries and sectors will continue to find a tight talent market where baby boomers are reaching retirement and highly skilled jobs and where significant direct work experience is required.
As we move forward, understanding these evolving trends is crucial for businesses and job seekers alike, ensuring we navigate the changing employment landscape successfully.
It's crucial to have a good grasp of the Canadian labor market and assess the risks your business may face. With our extensive 46-year track record, we have a proven history of assisting employers in finding exceptional candidates and enhancing their hiring strategies. Our team of over 100 recruitment experts across the country is well-equipped to guide your business through the uncertainties of the current economic landscape, help you develop a compelling Employee Value Proposition, and most importantly – connect you with the right people right away. Take the first step and reach out to us today to get started on this journey.
