Canadian job seekers are heading into a much different economic landscape this fall as the previously red-hot labour market cools and candidates face increased competition amid record immigration levels.
Friday’s jobs report shows overall employment was still rising heading into the fall, but Statistics Canada said gains were concentrated in the volatile education sector and part-time work.
The unemployment rate held steady at 5.5 per cent for the third consecutive month, the agency said.
That’s up from the near-record lows of 5.0 per cent seen at the start of 2023 amid an easing in the wider economy this year, says Pedro Antunes, chief economist at the Conference Board of Canada.
Canada’s jobs market is nowhere near as tight as it was coming into the year, Antunes tells Global News, when employer vacancies stood near the one-million mark.
The unemployment rate has risen this year while employers continue to add jobs, thanks in large part to a growing population and record immigration levels helping to boost the supply of labour in the country, Antunes says.
“Overall, I think the labour market is still very healthy,” he says.
But that doesn’t mean it’s easy for workers like Toronto’s Purna Iyer, who has been looking for a full-time job since May.
The 26-year-old has been studying at Humber College and working part-time at Tim Hortons and grocer, Farm Boy, for the past year after immigrating to Canada.
Freshly graduated, Iyer is looking for full-time work in the social media space, but she tells Global News the job hunt has been difficult.
She says it’s been challenging to parlay the non-Canadian work experience she has to employers, and fine-tuning resumes and cover letters for each position is pain-staking but necessary to stand out in a crowded field.
“It has been pretty stressful,” Iyer says. “There are job openings, but there aren’t enough job openings for the number of candidates that are now in this country.”
Canada’s ‘overheated’ labour market starting to cool
Job seekers and workers considering a career move this fall find themselves in a more balanced labour market that doesn’t necessarily favour either side of the hiring equation, says Mike Shekhtman, regional director at recruiting firm Robert Half Canada.
Canada’s labour market was “overheated” heading into 2023, Shekhtman says, with employers rapidly hiring and even “over-hiring” to snap up talent in the tight jobs market.
But the growth outlook in Canada has changed since then. Hiring intentions are shifting amid rumblings of a recession on the horizon as economic growth has stalled in recent months.
While he says companies are still hiring, Shekhtman notes there has been a “deceleration” from employers looking to expand their payrolls and candidates considering career moves.
“Employers and employees alike are now navigating through an economic climate … that’s more complex, complicated and even unpredictable in nature,” he says.
The Conference Board of Canada’s Hiring Index, which tracks online job openings, showed a slight uptick in new postings in August. But Antunes notes that single month of growth was an outlier from the trend that’s been showing “a very steep decline from peak levels in terms of hiring intentions.”
The silver lining to signs of easing in the labour market might be that employers haven’t been forced to shed positions en masse, Antunes says.
While he says there’s signs a “soft landing” might be in the cards for Canada — the economic scenario that sees inflation cool and economic growth slow but avoids a technical recession — risks of a steeper decline are still there.
Corporate profits have taken a hit in recent quarters from the substantial highs seen during the pandemic, he says, and higher interest rates have yet to fully sink in for households yet to renew their mortgages.
“All of these things suggest that there are pressures on businesses and that we may see, in fact, a harder landing down the road,” he says.
Whether Canada falls into a full-blown recession or not, the Conference Board is expecting employment levels to take a hit in the months to come, Antunes says.
Salaray increases have 'plateaued' overall
Shekhtman says that Robert Half has seen a slowdown in “investment hiring” — companies looking to expand their payrolls to pursue growth — but notes employers have been slow to let go of talent and are still hiring replacements, leaving opportunities for skilled, in-demand talent in the market.
While he says that overall salary increases have “plateaued” from highs he was seeing earlier in the year, Shekhtman argues skilled candidates are still able to flex their worth in negotiations with new or existing employers.
“Certainly for in-demand positions, people are getting the salaries that they’re looking for,” Shekhtman says.
Robert Half surveys of Canadian workers and hiring managers from May and August show salaries have been top of mind in the labour market.
Some 39 per cent of candidates surveyed said their greatest frustration in the job hunt was not being offered suitable compensation, with 35 per cent indicating they’d leave a company if not offered a pay raise.
Meanwhile, four in 10 employers indicated plans to raise salaries in 2024 to attract and keep top talent, according to the survey.
The September jobs report showed average annual wage gains hit 5.0 per cent, accelerating slightly from August. But some economists reacting to the figures said they expect the pace of pay hikes to slow in the months to come.
Not every company will be in a position to offer higher wages as the cooling economy bites, Shekhtman says, adding workers might have to get “creative” with their negotiation tactics.
With employers looking to retain existing talent, allowances for hybrid work and better “control” of your working schedule are areas that workers can leverage, Shekhtman says. More paid time off, subsidized parking and help with other commuting costs are also on the table for offices that are shifting back to primarily in-person work, he adds.
In the most dire circumstances, Shekhtman says it is always wise to tap into your network and keep your LinkedIn profile updated so you’re ready to jump to a new opportunity if you’re hit with a layoff. In the meantime, reminding your manager and other stakeholders in the organization about the “value” you bring to the table is a good defensive tact workers can take to stave off job cuts.
“Show ways where they’re going to miss you if you’re not there.”
In Toronto, Iyer is continuing to pound the pavement with job applications. She tells Global News that she understands the changing economic climate, but it hasn’t discouraged her from finding a job that’s right for her.
“Right now is a difficult time for everybody. Like the economy itself is bad and there’s inflation in the market,” she says. “I am stressed, but I just have to keep at it till I get the job I need, until I hit the mark.”
— with files from Global News’ Nivrita Ganguly
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