If you’re a regular reader of this monthly topic you may be interested to know that the overall labour force statistics are pretty unremarkable this month. A slight increase to employment and workforce numbers with no adjustment to the unemployment rate is easily explained by seasonal employment ramping up at this time of year. While seasonal hiring is returning to pre-pandemic levels, the labour force continues to remain contracted. This means employers looking to hire on temporary staff this season are facing challenges not previously seen in recent years. For more insight on how to attract job seekers check out our Talent Squeeze report.
Looking for more in-depth stats on the labour force? Check out this interactive widget:
Over the last several months, Statistics Canada has regularly reported increases to the average hourly wage across Canada; although, they have failed to keep pace with the inflation rate. However, this month Statistics Canada October Labour Report took a deeper look at the financial difficulties many Canadians are facing, which sectors are keeping up with wage increases, and how employees are making up the difference.
Wealth gap between highest and lowest earners grows
At first glance, it appears many Canadians have received a salary bump in the last year. In October, among employees who had been with their employer for at least 12 months, 6 in 10 had received a raise in the previous year. This should be good news, but as we drill down, we see greater income disparity among the lowest and highest earners in Canada.
Nearly two-thirds of employees earning $40 or more per hour (the top 25% of employees in terms of wages) had received a raise last year. On the other hand, only 50% of those with wages of $20 or less per hour (representing the bottom 25% of wage distribution) received raises in that same time.
Over one-third of Canadians over the age of 15 are living in a household where they are finding it difficult or very difficult to meet their financial needs, which Statistics Canada defines as transportation, housing, food, clothing, and other necessary expenses. This is 15% more households than when the same question was asked in October 2020, during the first year of the pandemic.
Statistics Canada suggests the risk of financial difficulties may be higher among workers in certain industries due to differences in wages or the prevalence of certain job characteristics, such as part-time hours. As previously mentioned, workers in accommodation and food services (and retail trade) have hourly wages below the national average. This group was the most likely to be working part-time in October, and nearly half stated they were facing financial difficulty last month.
Which sectors are earning more?
Despite unionized employees earning higher wages on average than their non-unionized counterparts, they were 4% less likely to have received a wage increase in the last year. However, Statistics Canada notes, “wage gains among unionized employees can be delayed until collective agreements expire, and a new round of collective bargaining begins.”
Just over half of health care and educational services employees received a raise in the last year. Understanding the need to secure top talent, Newfoundland and Labrador have gotten ahead of other provinces and are implementing bonuses for areas within their healthcare system that are struggling the most with recruitment and retention.
The least likely to receive a raise are those who are working in the lowest paid industries. Agriculture, and accommodation and food services – both with average hourly wages below the national average – saw less than half of their employees receive a raise in the last year.
On the other hand, two-thirds of employees working in professional, scientific and technical services; finance, insurance, real estate, rental and leasing; and manufacturing received a raise some time in the last 12 months.
Employees and job seekers prioritize wages and benefits
With the labour market still squeezed, employees are reaping the benefits of a candidate-driven market. Last month nearly 60% of employees who changed jobs secured a position with a higher hourly wage. This is up substantially from the average of 50% in October from 2017 to 2019.
Changing jobs isn’t the only way Canadians are earning extra income. Some workers may work extra paid hours including voluntary paid overtime, to help adjust to rising prices. According to Statistics Canada, in October workers in utilities, natural resources, manufacturing,
transportation and warehousing, construction, and health care and social assistance were among the most likely to have voluntarily worked paid overtime in the previous month. Many Canadians are also looking at a second job or side-hustle to increase their take-home pay. In October 2022, RBC’s Small Business Survey revealed that 74% of Canadian small business owners and aspiring entrepreneurs are motivated to start a side hustle or another company due to the increased cost of living. And this percentage increases for Millennials and GenZ.
BenefitsCanada cited 48% of employees globally were considering switching jobs, citing wages
and growth as the key motivating factors. In addition, Stat Can’s August Labour Report reported the “proportion of permanent employees who were planning to leave their job within the next 12 months (11.9%) was almost double the level recorded in January 2022 (6.4%), when the question was last asked.” When Stats Can investigated the why employees would consider a move, salary and benefits was cited by 85.4% followed by workplace health and safety (82.2%) and the job security (82.2).
It is likely employers will see more voluntary turnover because of the tight labour market and job seekers following more money and opportunity. We have yet to see any slow down in job movement despite the foreshadowing of a recession in Canada and the potential of job losses. Employee engagement and retention should remain a top priority for employers as well as promoting your employer brand for talent attraction.
Agilus is here to help
Are you an employer looking for qualified candidates in the tight labour market? Contact us to set up a consultation with one of our specialty account managers. Or if you’re a job seeker looking to take advantage of a career move, Agilus Work Solutions partners with some of Canada’s top employers and are constantly seeking new candidates with all different skillsets and backgrounds. Check out our job board to apply now!