If your paycheque hasn’t seen a meaningful boost in some time, now may be the time to look around for a new gig.
Canada, which shed 3 million jobs at the onset of the COVID-19 pandemic, is now a workers’ labour market, a number of recruiting professionals told Global News. And the prize for job switchers is often double-digit pay increases.
“It’s a market unlike anything I’ve ever seen before,” says Toronto-based Travis O’Rourke, president of Hays Recruitment Canada, who’s been in the business for 15 years.
In a typical jobs market, a company would often have three top candidates to choose from to fill a position. Right now, though, the tables have turned. It’s been common for a single qualified candidate to receive offers from three different employers eager to fill vacancies, according to O’Rourke.
“If you are an in-demand, skilled candidate the world is almost your oyster at the moment,” says Mark Fenwick, vice-president of Corporate Services Division at Impact Recruitment in Vancouver.
Some job seekers are managing to up their pay by 20 per cent in some cases, he says.
The economy added another 90,000 jobs in August, bringing overall employment within 156,000 jobs, or 0.8 per cent, of the level recorded in February 2020 before the start of COVID-19 health emergency, according to data from Statistics Canada.The unemployment rate fell to 7.1 per cent for the month, the lowest level since the beginning of the pandemic.
In Winnipeg, Matt Erhard, managing partner at Summit Search Group, has similar figures to Fenwick, saying some successful candidates are job-hopping their way to overall compensation that’s between 20 and 25 per cent higher.
“We’re definitely seeing a lot of more flexibility on salary,” he says, with employers often willing to consider candidates asking for pay that’s far above the range initially set for a certain job posting.
The evidence suggesting large wage gains for changing jobs isn’t just anecdotal. Data from Statistics Canada shows that the average hourly wage offered for new job openings in the period between October 2020 and March 2021 was up by seven per cent compared to the average for all of 2019, according to an analysis of the latest available numbers by Pedro Antunes, chief economist of the Conference Board of Canada.
“For comparison, the industrial composite average weekly wage in Canada grew by 2.4 per cent annually over the past decade to 2019,” Antunes said via email.
The seven per cent increase for the wages offered by employers trying to fill new vacancies “does stand out,” he told Global News.
And Statistics Canada has yet to publish data reflecting what companies were willing to pay new hires in the spring and summer when labour shortages across Canada worsened across much of the country.
Cross-country hiring spree creating 'mayhem'
In June, Canada had more than 800,000 job vacancies, up a mind-boggling 22 per cent from May.
From O’Rourke’s vantage point, the economic bounce-back from the recession caused by the pandemic has been nothing like what followed the financial crisis of 2007-2008.
Back then, he remembers, the labour market recovery had been gradual. Different companies and different industries started ramping up hiring at different times, he says.
Now, though, as vaccine rollouts lead to eased restrictions across many of the world’s largest economies, “you’re seeing every company come back online at the same time,” he says.
“It’s mayhem out there,” he adds.
The shortages are widespread across regions and economic sectors. Geographically, Quebec and British Columbia are experiencing the most severe job crunch, a recent analysis by RBC shows. In terms of industries, most of the unfilled positions are in food services, health care and the retail industry, according to the report.
And tech workers, who were already in short supply before the pandemic, are in even greater demand now, according to research by KPMG. In a recent survey of more than 500 small and medium-sized businesses, the consultancy found that more than two-thirds (68 per cent) of respondents were struggling to hire candidates with the right skills, with the shortage particularly acute when it comes to finding new employees with IT skills.
Countless companies across industries were forced to move more of their business online amid the pandemic, but employers are scrambling to find the manpower to fuel that digital growth, Armughan Ahmad, managing partner and president of KPMG Digital in Canada, previously told Global News.
At Impact Recruitment, Fenwick says he’s also seeing soaring demand for lawyers, workers in the construction industry and auditors (the latter due to, at least in part, an increased volume of mergers and acquisitions).
O’Rourke, whose company helps employers fill jobs in sectors ranging from banking and insurance through the agriculture sector and mining, says he’s seeing shortages across the board.
That includes entry-level positions, he adds. The pandemic prompted a number of older workers to pull the trigger on retirement, he says. Now, companies are filling some of those vacancies with junior hires, for whom they’re often prepared to pay more than they would have only a couple of years ago, according to O’Rourke.
“Even paying an entry-level employee 10 per cent more than you would have two years ago could still be saving a company money based on what they were paying a senior person to do the same function,” he notes.
Retiring baby boomers have exacerbated shortages in the health care sector, Antunes previously told Global News. And older pilots exiting the workforce have become a headache for the airline industry, Global News previously reported.
Could big paycheques for new hires push up wages for everyone?
So far, employers don’t seem inclined to grant their existing employees the same big pay bumps they’re prepared to offer to new hires. The projected salary increase for employers surveyed by the Conference Board of Canada is just 1.9 per cent for 2021.
But Fenwick and O’Rourke say they’re seeing some companies come up with aggressive counteroffers for employees who’ve been offered a higher-paying job elsewhere.
“I’ve seen counteroffers result in an extra $50,000 for an employee,” O’Rourke says.
He sees evidence that a rising tide is helping to lift all boats.
When some employees received generous counteroffers, colleagues take notice, he says.
“The person who is sitting next to them starts to think ‘hey hang on a second if that’s what my value is on the open market, I want to ask for a raise or I’m going to look for another opportunity as well’,” he says.
“The phrase ‘wage inflation’ is floating around like crazy right now,” he says.