While 2022 may have been a year of unprecedented employment growth across the country, 2023 has proven to be a year set in stasis. Statistics Canada’s November Labour Report showcases both resilient growth and concerning trends – it reveals that the shifts in employment rates, industry highs and lows, regional variations, challenges faced by newcomers, and emerging trends have resulted in a labour market caught in suspension. Delving into the statistics unveiled in this report sheds light on the multifaceted dynamics currently influencing Canada’s job market – where smalls wins have failed to make an impact on the overall economic sluggishness.

Unpacking the numbers

Last month, the employment rate increased by 0.1%. Overall, the employment rate has decreased and generally trended downward since January 2023, when it was at its highest point of the year at 62.5%, now sitting at 61.8%.

The modest increase of 25,000 jobs last month was essentially nullified by population growth, leading to a slight uptick in the unemployment rate to 5.8%. It’s worth noting, this number is still historically low compared to the previous decade’s average of 6.9%. Although with the increase in retirees at the end of the decade, the 2019 unemployment average dropped to 5.7% – this suggests that the current unemployment trend is now on par with pre-pandemic trends.

However, as the Canadian population continues to boom, it is likely we will continue to see an increase in the unemployment rate over the next year. While job creation persists, the pace isn’t keeping up with the expanding labour force. Additionally, the jobs that are being filled are low-skilled and lower paid and not the highly skilled, high earner roles that Canadians are desperately in need of. Furthermore, people who were out of work last month had lost their jobs as opposed to leaving them voluntarily – such as retirement. Comparing the numbers to the previous year, this increase in layoffs tells us about the tougher times many have faced in the job market this year.

Overall, the labour report presents a mixed bag of details. While full-time positions drove the overall job growth, there was also a decline in total hours worked – not exactly a promising sign for the economy’s growth. Wages follow a similar pattern, although with a slightly more positive outlook. Average hourly earnings surged by 4.8% year-over-year, which outpaces inflation. But with the broader economy slowing down and employers scaling back on hiring, it’s uncertain whether this trend can sustain itself into the new year.

Industry stats highlight disparity

With federal and provincial governments investing heavily into manufacturing and construction it’s no surprise that manufacturing employment numbers remain positive and surged by 28,000 positions – a 1.6% increase that balanced out October’s 1% decline. Year-over-year, this sector observed a 2.4% boost, in line with the overall annual employment growth across all sectors – pegged at 2.5% with an addition of 499,000 jobs.

Similarly, construction added 16,000 jobs (1%) in November, building upon October’s 1.5% increase of 23,000 positions. Despite a downward trend through early 2023, the gains in October and November nearly bridge employment levels. Recent data on building construction revealed a fluctuating pattern in investment throughout the year, notably in residential building construction, which saw a downturn for most of 2023 before showing signs of recovery in the back half of the year. This may indicate some relief for Canada’s housing crisis, albeit a very slow start on the 1.5 million homes that are needed over the next ten years.

On the flipside, employment in wholesale and retail trade faced a downturn, witnessing a decline of 27,000 positions (0.9%) in November, which compounded the previous month’s loss of 22,000 jobs (0.7%). These industries typically see a large uptick in employment in the back half of the year with seasonal hiring and new immigrants often rely on these bridge jobs to gain Canadian experience and make ends meet. As of November, employment in this sector stooped to its lowest level since December 2022.

In the domain of finance, insurance, real estate, rental, and leasing, the scenario wasn’t any brighter, with an 18,000 job decrease (1.3%) in November. Over the course of the last few months, this industry witnessed a steep decline of 63,000 jobs (4.4%) since July, marking the sharpest decrease across all industries during this period.

Immigrants facing challenges integrating with Canada’s labour market

In recent years, Canada has welcomed a significant influx of immigrants, reaching a record-high proportion of 23% of the total population in 2021. From July 2022 to July 2023, immigrants and non-permanent residents have accounted for nearly 98% of the country's population growth.

Despite their growing presence in the labour market, many immigrants encounter obstacles when integrating into Canada's workforce. This is especially true for those with foreign-acquired post-secondary credentials or work experience. To shed light on these challenges, supplementary questions were introduced in Statistics Canada’s November Labour Force Survey.

The survey revealed that among recent immigrants (arriving within the last five years) with foreign work experience or credentials, almost 6 in 10 (58.2%) encountered difficulties in securing work related to their international experience within the past two years. Comparatively, this difficulty was faced by fewer individuals (47.6%) who had arrived in Canada five to ten years earlier.

Common obstacles reported by recent immigrants included a lack of Canadian work experience (22.7%), absence of connections within the job market (20.3%), and insufficient references from Canadian sources (18.5%). These challenges signify the hurdles faced by newcomers seeking alignment between their expertise and opportunities within Canada's job landscape.

Working with our clients, we have found that most employers are open to hiring immigrants and recognize potential biases. Employing best practices to ensure immigrant candidates are assessed on a level playing field, and with provinces starting to ban the need for specific Canadian work experience, future employment trends are looking brighter for those who have newly arrived.

Hybrid work arrangements trend positive

The prevalence of remote work, once significantly heightened during the COVID-19 pandemic, has gradually diminished over recent months. From its peak at 24.3% in January 2022, the number of workers exclusively working from home decreased to 12.6% by November 2023.

In contrast, the proportion of individuals working solely at locations other than their homes in November 2023 was slightly above three-quarters (75.7%), remaining relatively steady since August 2023 (76.1%) but showing an increase from January 2022 (72.1%).

A noticeable trend in the return to in-person work has emerged through hybrid work arrangements—where individuals split their work hours between home and other locations. Since January 2022, the number of individuals engaged in hybrid work has remarkably grown, climbing from 3.6% to 11.7% by November 2023.

The preference for specific work setups often depends on various factors, including industry, job types, and individual circumstances of both employees and employers. However, remote and hybrid work arrangements particularly appeal to parents, offering them time saved from commuting and the flexibility of work hours. In November 2023, about 3 in 10 parents (30.1%) with at least one child aged five or younger either exclusively worked from home or followed a hybrid work model. This figure includes 33.2% of mothers and 27.4% of fathers with young children. In comparison, 23.5% of workers without young children followed a similar work-from-home or hybrid arrangement.

Our own policy on hybrid work has resulted in positive benefits for #teamagilus, with increases in both revenue and employee satisfaction. Hybrid and remote work are often promoted to our clients, when feasible, as candidates are very attracted to hybrid options as a way to work flexibly, maintain a Work+Life balance and nurture mental health. Furthermore, employers who have hybrid or remote work options increase their available talent pool substantially from focusing on local candidates only, to expanding to provincial, national or even global job seekers.

Paving the way forward

This last month’s labour report presents a landscape where employment growth faces challenges amid sectoral shifts and demographic transitions. “November’s report demonstrates the complexity of our Canadian labour market. There is no one size fits all solution. As a full-service recruitment firm, we work tirelessly with our clients to navigate through these uncertainties and find the best candidates for their permanent, contract and temporary roles.” says Agilus CEO, Craig Brown. “By embracing adaptability, recognizing opportunities in growing sectors, and welcoming diversity we foster successful matches between talent and prospective employers.”

For employers, comprehending these labour market intricacies becomes essential in planning for future workforce needs. Adapting recruitment strategies to align with flourishing sectors while addressing possible skill gaps stands out as a strategic move.

For job seekers, flexibility, continuous learning, and a focus on industries displaying resilience in employment growth could steer career paths toward success in a competitive job market.

As the labour market continues to evolve, our mission stands strong, to lead a connected forward-thinking work community. For over 46 years, Agilus has diligently served both job seekers and employers, bridging the gap between exceptional talent and meaningful opportunities. With a nationwide team of recruitment and human resource experts, we're poised to navigate today's economic uncertainties, craft compelling Employee Value Propositions, and swiftly connect you with the perfect fit for your team. Take that crucial first step toward success—reach out to us today, and let’s get to work.