Last Friday, Stats Canada released it’s Labour Force Survey for November 2024 and noted some growth in both employment and unemployment rate. This is a mix of good and bad news for businesses and Canadians, reflecting the complexities of our current economic climate and heralding an economy in transition as we plan for 2025.
Opportunities for Hiring and Growth
1. Employment Growth: The addition of 51,000 jobs (+0.2%) in November shows that some sectors, such as wholesale and retail trade, construction, and professional services, are growing. This creates opportunities for businesses to expand and capitalize on available talent.
2. Increased Labour Force Participation: With over 137,800 more individuals entering the labour force, employers now have a larger pool of candidates to fill roles. This can be a boon for industries struggling to address talent shortages, if you’re looking for candidates in an industry with a surplus of workers. Canada is still experiencing a tight labour pool in highly skilled workforces.
3. Moderated Wage Growth: The slowdown in wage growth (3.9%, the lowest since June 2023) may ease pressure on businesses facing rising costs, making hiring and retention more manageable, but at the same time increased costs are outpacing wages posing affordability issues for many Canadian workers.
Rising Unemployment and Economic Pressures
1. Unemployment Rate Increase: The unemployment rate rose to 6.8%, its highest in nearly eight years (excluding pandemic spikes). This signals that while jobs are being added, they are not keeping pace with population growth and labour force expansion through immigration and layoffs, which could indicate underlying challenges in job creation.
2. Sectoral Declines: Weaknesses in manufacturing and information/culture/recreation sectors highlight uneven growth. For Canadians working in these industries, job losses can strain households and communities.
3. Economic Uncertainty: The mixed signals in the labour market might influence the Bank of Canada's decisions on interest rates, potentially further impacting businesses and consumer confidence.
4. Cities’ Growing Unemployed: The biggest cities in Canada are facing the sharpest increase in unemployment. Windsor recorded the highest jobless rate at 8.7 per cent. Toronto (8.1 per cent), Edmonton (8.3 per cent) and Calgary (7.9 per cent) also posted high unemployment, reported by the National Post.
Key Findings:
Employment Growth: Employment increased by 51,000 positions (+0.2%) in November, maintaining the employment rate at 60.6%. A deeper dive reveals 45,000 of the new jobs coming in the public sector and not from businesses. However, James Orlando, senior economist at Toronto-Dominion Bank, thinks the fact that the economy is still adding jobs reinforces the view that the “labour market is on solid foundations.”
Unemployment Rate: The unemployment rate rose unexpectedly to 6.8%, up 0.3 percentage points from October, marking the highest level in nearly eight years, excluding the pandemic period.
Labour Force Participation: The labour force expanded by 137,800 individuals, indicating a significant rise in the number of people seeking employment.
Sectoral Employment Changes:
Wage growth: Average hourly wage growth for permanent employees slowed to an annual rate of 3.9%, down from 4.9% in October, marking the slowest growth since June 2023.
A Transitional Economy
The survey suggests Canada is in a period of transition:
For businesses, this means navigating new workforce dynamics, including balancing hiring opportunities with retention challenges as the economy adjusts to geopolitical and domestic influences on interest rates and shifting consumer behavior.
For workers, it reflects the complexity of finding roles that match skills and expectations while dealing with inflation and wage stagnation, which means prepare for longer job searches as job seekers compete for limited roles in some sectors. The National Post reports, there are now 1.5 million unemployed, up by 276,000 compared to November 2023.
Overall Impact:
The November survey isn't strictly good or bad—it's a nuanced snapshot of a changing labour market. Businesses should see this as a chance to refine their strategies for hiring, retention, and navigating economic uncertainties, while Canadians may need to adapt to evolving opportunities and challenges with expectations of a longer job search and/or upskilling to remain competitive or transition to other labour sectors.
"As businesses navigate this transitional labour market, it's crucial to recognize the dual challenges of rising unemployment and sectoral shifts," notes Craig Brown, CEO of Agilus Work Solutions. "Employers who strategically invest in upskilling and align their workforce planning with these dynamics will be better positioned to thrive in 2025 and beyond."
This transitional period presents opportunities for businesses to access a growing pool of talent, but also emphasizes the importance of adapting workforce strategies to meet emerging economic realities. For workers, the evolving job landscape calls for greater flexibility, skill development, and resilience to stay competitive in shifting sectors.
Recommendations for Employer Recruitment Strategies: With the labour force growing and more individuals seeking employment, it's an opportune time to attract qualified candidates. Employers should:
Identify your gaps: As companies look to build skill-based workforces, work with your team leaders to identify skills gaps and capacity overflow. Consider, internal mobility options, upskilling and reskilling to minimize turnover (see below) and then look to available talent pools:
Invest in Employee Retention: The rise in unemployment coupled with moderated wage growth suggests potential shifts in employee expectations. To retain valuable staff:
Monitor Economic Indicators: The current labour market dynamics may influence the Bank of Canada's monetary policies, potentially affecting business operations. Employers should:
By proactively addressing these areas, employers can navigate the evolving labour market effectively and maintain a resilient workforce ready to face the new year.
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