Wondering what the Canadian job market will look like in 2024? Explore Recruiter’s Perspective, Labour Trends’ & factors shaping the employment landscape.
Recruiters are often seen as the early indicators of economic trends, much like canaries in a coal mine. We recognize shifts in the job market before they become widely acknowledged, especially within Canada.
For instance, we foresaw the recent economic slowdown well in advance of its official announcement. Now, we’re starting to observe signs of recovery on the horizon. While we don’t expect a return to the booming days of 2021, the current activity indicates a brighter outlook for the Canadian job market in 2024.
Now that we’re in the third month of 2024, I would like to highlight some key insights about the current state of the job market. But before diving into that, let’s provide our perspective as recruiters on the ongoing developments.
The Canadian Job Market in 2024: What You Should Know
A Recruiter’s Perspective On The 2024 Canadian Job Market
Well before economists officially declare a recession, recruitment firms notice a decline in client hiring. This isn’t prompted by any explicit signal but rather by a gut feeling or an intuitive sense of market uncertainty. Each firm independently begins to scale back, reduce, or pause its hiring initiatives. While individual companies may not notice these changes, a clear trend emerges when viewed collectively across 50-100 clients, which indicates an impending economic slowdown.
Likewise, the signs of economic recovery appear months before the media reports positive news that recruitment activities show a slight uptick, clients inquire about market conditions, and previously halted searches are revived. While this isn’t a foolproof indicator, years of experience as an executive search professional suggest it’s reliable – these early indicators anticipate an economic rebound in 2024.
The challenging labor market of 2023, marked by prolonged inflation, layoffs, and economic uncertainties, is now giving way to brighter prospects. However, It’s important to temper expectations that the upcoming years won’t mirror the robust growth of recent times. The economy will continue to progress cautiously, but it will significantly improve from recent conditions.
Anticipated interest rate cuts and the gradual resurgence in hiring among companies that streamlined their operations over the past year signal positive changes. Of course, there are still obstacles to navigate, such as conflicts in Ukraine and the Middle East, along with the unpredictable nature of the American election. Despite these challenges, there’s an overall sense of optimism for 2024.
What Are The Main Labour Trends We Can Expect In 2024?
In 2024, we can anticipate three key labor trends:
- Wage growth and salary raises will decelerate.
- Hiring activities will slow down, although companies intend to continue hiring.
- Significant layoffs are not anticipated.
It’s important to note that the dynamics of the labor market will vary between the US and Canada. The US market is more resilient, and Canada’s recovery will be slower. However, both countries are progressing positively. Let’s examine each of these trends in more detail now.
The Money Question – Wages Trends
In 2024, expect a slowdown in wage increases and raises. During the pandemic and the period of the Great Resignation, employers offered significant pay raises and bonuses to retain their employees. However, now that the Great Resignation is coming to an end, the balance of bargaining power has shifted back in favor of employers. Therefore, workers should expect a different level of pay raises seen during the pandemic.
Quit rates are decreasing, leading employers to scale back their efforts to compete for workers already in the labor force. This reduced competition is also contributing to a decrease in wage growth rates. Additionally, the pace of merit increases may also decline. Employers are now focused on limiting increases outside of regular pay reviews during the pandemic to control budgets.
Will We See Significant Layoffs In 2024?
One of the main factors indicating that significant layoffs are unlikely this year is the persistent challenge for employers to find skilled talent. There’s a strong preference among employers to retain their current workforce, with many companies being cautious about making further cuts due to recent labor shortages. As we look forward to the upcoming year, it seems that many companies are leaning towards “labour hoarding,” which reflects a careful approach to staffing in preparation for potential uncertainties.
Conclusion:
The condition of the labor market is closely linked to the Canadian economy, and the positive news is that the economy seems stable in 2024. This stability indicates that the labor market is also likely to stabilize.
So, what does this mean for recruiters? It means that top talent tends to make their moves at the beginning of an economic recovery. As the economy rebounds, companies aiming to attract and retain the best talent should consider initiating discussions with their recruitment partners sooner rather than later. Now is an opportune moment to connect with The Human Recruitment Agency in Toronto Canada and optimize your recruitment strategy for the year ahead.