What should Canadian employers expect next year? We interviewed Brendon Bernard, Senior Hiring Lab Economist for Canada, about Indeed’s latest 2024 Jobs & Hiring Trends Report to discuss emerging insights into the current job market and the future of work in Canada.
Market outlook: Economic uncertainties might subdue the job market
The Canadian job market has held up well during the economic slowdown, but recent signs indicate performance may be weakening. While Canada has avoided a significant economic downturn, households are concerned they have yet to feel the full impact of the interest rate hike cycle. The current outlook for the coming year is slightly pessimistic, driven by macro uncertainties.
The Canada’s flatlining economy has caused a slight pullback in employer hiring heading toward the end of 2023. Unemployment has risen from 5% at the start of the year to 5.7% in October, though this rate remains similar compared to pre-pandemic levels. Similarly, job posting volumes have declined steadily from the highs observed in 2022 but remain relatively elevated compared to prior years.
The labour market could soften further in 2024 if economic growth remains slow, but that doesn’t necessarily mean a swift downturn. The key indicator in the coming months will likely be layoffs. Layoff activity has been low the past two years, even as the economic outlook has softened, making any increase in job losses indicative of a tip toward a sharper economic decline.
Watch for these 2024 trends
What does the current economic landscape mean for Canadian employers? Below, we highlight five of the key themes from our 2024 Jobs & Hiring Trends Report that will shape Canada’s labour market in the coming year:
Trend 1: Wage growth likely to cool despite cost of living struggles
Canadian wages have yet to claw back losses from cost of living increases from the earlier jump in inflation during the pandemic recovery. That said, they’ve still been growing at a solid pace, with the Indeed Wage Tracker showing posted wages in Canada up a solid 4.3% year-over-year pace as of October.
However it’s unclear if the trend will persist. The two key factors that have kept wage growth high: employers’ desire to attract and retain employees in a competitive market and efforts to mitigate the impact of inflation in 2021 and 2022, are showing signs of shifting back. As a result, it wouldn’t be surprising to see slower wage growth in 2024. But beware: If wage growth stagnates within an organization, you may have increased turnover as employees turn to competitors for better incentives.
Trend 2: Canada remains attractive to foreign job seekers—for now
International migration to Canada soared in 2023, driven by newcomers with temporary work and study visas. This trend will likely continue to be a significant, though unpredictable growth driver in the Canadian job market, by supporting labour force growth. The government is also working to attract more foreign healthcare workers and skilled tradespeople to support planned infrastructure and housing initiatives.
These trends have been evident in increased foreign interest in working in Canada, as reflected in the growth of job seekers searching for roles on Indeed Canada within the past few years. In Q3 2019, approximately 6% of clicks on Canadian job postings came from job seekers outside of Canada, but by October 2023, that number rose to 11%. Canada remains an attractive place to work despite current macro uncertainties, though an economic downturn could cause foreign job seekers’ to turn elsewhere.
“Though the economic cycle has shifted, attracting job seekers and being competitive in the labour market always matters."
Brendon Bernard, Senior Economist, Indeed Hiring Lab
Trend 3: Employers must work to remain competitive in an uncertain market
While employers may have an easier time filling roles in 2024, staying attractive to job seekers remains essential. Companies that build and maintain a strong employer brand now will be better able to retain business-critical talent and may have a competitive advantage in future talent markets.
Our research shows that today’s job seekers seek competitive pay, benefits, and opportunities to grow their careers. Flexibility, a good work/life balance, and a positive workplace environment are critical factors that can help make an employer more desirable in the current landscape. In the coming year, job seekers will also increasingly differentiate employers using salary transparency data driven by new and forthcoming provincial legislation.
“Though the economic cycle has shifted, attracting job seekers and being competitive in the labour market always matters," says Brendon Bernard, Indeed Hiring Lab Senior Economist for Canada and the report’s author.
Trend 4: Remote and hybrid roles still draw more candidates
Post-pandemic, while fewer organizations are offering fully remote job postings, hybrid job postings are still on the rise. Job seekers value increased flexibility: Hybrid and remote positions generate higher job seeker interest and typically fill faster than similar jobs without flexible or remote work options. For employers in competitive markets or seeking to fill niche roles, offering remote or hybrid positions can deliver an essential competitive advantage while widening candidate pools.
Trend 5: AI’s impact is on the horizon
Generative AI has the potential to revolutionize business operations in the coming years. While overall Canadian technological job postings have decreased after previous record volumes, the small AI sector is rapidly growing. The past year has seen a remarkable increase in generative AI-related keywords in job postings and technology and AI-related jobs with titles like “Machine Learning Engineer.”
Despite early hype, many businesses are still working to understand how AI tools can best integrate into their processes. Generative AI’s capabilities overlap with skills seen in white-collar and technology jobs, indicating broad applicability and the corresponding potential for impacts on businesses’ competitive advantage, new job opportunities and displacements, and the wider economy.
Navigating the road ahead
With a subdued labour market and the potential for an economic downturn throughout 2024, this is an excellent time for Canadian employers to focus on fundamentals. Employers can build a strong brand, review full compensation and employee development plans to strengthen retention, and investigate new tools to help connect with candidates to support future growth.
For more insights, visit the Hiring Lab to read the full report.
