As we dive into the latest insights from Statistics Canada’s March labour report, it’s clear the Canadian workforce continues to face both familiar and evolving challenges. Previous months have seen modest fluctuations — from incremental gains to periods of stagnation. While recent reports have hinted at a semblance of stability, this month’s report reveals heightened complexities in the labour market.

Amidst these fluctuations, one undeniable reality stands out — the Canadian labour market is changing. This month we look at the rising unemployment rate, youth employment challenges, and the growing trend of pay transparency to better navigate the evolving dynamics of Canada’s labour market and how it impacts your available talent pools.

Canadian Unemployment on the Rise

Last month, Canada’s unemployment rate increased from 5.8% to 6.1% month-over-month. While an increase of 0.3% may seem modest at first glance, it’s a 1% increase year-over-year and marks the largest unemployment rate increase since summer 2022. For context, this is when pandemic safeguards and economic tools were pulled back and we saw a flood of workers competing for jobs in an economy that had figuratively been shut down for more than 18 months.

Employment on the other hand was virtually unchanged in March, with a minor loss of 2,200 jobs, following an increase of 41,000 in February and 37,000 in January. Overall, the employment rate (the proportion of the population aged 15 and older who are employed) declined by 0.1%. Again, a minor decrease, but the sixth consecutive monthly decrease, which might reveal an alarming trend for the overall health of the Canadian economy.

Statistics Canada reports the spike in the unemployment rate is tied to an additional 60,000 people looking for work or on temporary layoff in March. After all, Canada’s annual population growth recently experienced its quickest increase since 1957.

Job losses were observed in key employment sectors of accommodation and food services and wholesale and retail trade. Factors such as global economic uncertainty, fluctuations in commodity prices, and shifts in consumer behaviour have contributed to a more cautious outlook among these employers. As a result, some businesses are becoming more hesitant to expand their operations or hire new employees.

Unfortunately, this increase in unemployment may further create ripple effects across the economy, impacting consumer confidence, spending patterns, and overall economic growth. As Canadians face uncertainty about their employment prospects, they may scale back discretionary spending, leading to reduced demand for goods and services. This, in turn, may affect businesses’ revenue streams, potentially leading to further job losses and a continued cycle of economic contraction.

Youth Employment Faces Pressure

The decline in youth (workers aged 15 to 24) employment by 28,000 in March reflects the heightened competition and limited job prospects for this demographic. With the youth unemployment rate reaching 12.6% — over double the national average — there is an opportunity to tap into this demographic for contract and entry-level positions.

Limited work experience, coupled with high levels of education and training debt, can make it difficult for young Canadians to secure stable, well-paying jobs. These young people are also facing stiff competition from under employed immigrants and Baby Boomers delaying retirement. While these factors helped ease labour shortages caused by the pandemic, they’re now exacerbating existing challenges young workers are facing from that time.

Many young Canadians who are now entering the workforce experienced disruptions in their schooling, internships, or job placements — leading to gaps in their resumes and skills development. According to a recent report from RBC, the implications of this trend are far-reaching. The RBC report suggests that longer job searches for students and new graduates have been a larger factor behind the increased unemployment rate as opposed to layoffs or population increases.

In fact, RBC points out the record-breaking population growth may actually be masking the economic challenges faced by youth. While the labour force has expanded by 369,000 new workers since April 2023, employment has only grown by 182,000. This discrepancy leaves many young Canadians still searching for work.

Ultimately, offering employment opportunities for these young Canadians is crucial not only for their economic well-being, but also for the long-term prosperity of Canada.

Trend Alert: Pay Transparency in Job Postings

In sync with the evolving landscape of employment in Canada, the conversation around pay transparency in job postings has gained significant momentum as a critical aspect of workforce engagement and equity. An analysis by Indeed’s Hiring Lab highlights that nearly half of Canadian job postings now feature pay information. Notably, over three quarters of postings in B.C. now integrate pay transparency following the province’s pioneering pay transparency law, which came into effect in November.

Many jurisdictions are beginning to implement pay transparency laws, and employers are increasingly recognizing the strategic advantages of transparent wage disclosure. Beyond fostering candidate attraction and streamlining the recruitment process, pay transparency initiatives contribute to fostering an equitable workplace culture, aligning with evolving employee expectations and regulatory mandates.

Although the prevalence of pay transparency in job postings is a positive step towards enhanced workforce engagement, Indeed’s analysis reveals that while more postings now include pay information, the granularity of wage disclosures has diminished. Instead, there has been a notable rise in job postings featuring large salary ranges as opposed to precise figures. This transition towards wider salary bands attempts to strike a balance between transparency and flexibility — optimizing candidate engagement while maintaining strategic agility in compensation negotiations.

As pay transparency emerges as a cornerstone of modern recruitment practices, its implications extend far beyond candidate attraction — encompassing broader conversations around workforce equity, talent retention, and market competitiveness. This week we published our Un-Salary Guide, a comprehensive resource designed to navigate the complexities of modern compensation. Unlike traditional numbers-focused salary surveys, our guide offers insights into the holistic rewards of employment, encompassing factors beyond monetary compensation.

Looking Ahead

No matter the market conditions, there is almost always uncertainty as well as opportunities for adaptation and growth for the Canadian labour market. It’s essential for both employers and job seekers alike to remain agile and responsive to these constantly evolving dynamics. For employers, this means embracing innovative recruitment strategies, fostering workplace diversity and inclusion, and investing in employee development and retention initiatives. By prioritizing transparency and equity in hiring practices — your business can attract top talent and cultivate a thriving organizational culture.

“The only consistency we can rely on when it comes to the labour market is change,” says Agilus CEO, Craig Brown. “The most successful organizations embrace innovation and agility, regardless of current market conditions. We’re seeing firsthand that companies actively fostering transparency, equity, resilience, and belonging are seeing higher levels of success attracting and hiring candidates.”

At Agilus, we’re committed to partnering with both employers and job seekers to create meaningful opportunities and maximize better outcomes. With 48 years of experience under our belt, our national team of experts offer personalized solutions tailored to meet the unique needs of each client and candidate. If you’re seeking top talent to drive business growth or replacing retiring teammates — we’re here to help you succeed. Let’s get to work!