The Canadian and U.S. labour markets have experienced major shifts over the past year. While there are notable similarities between the two countries’ employment trends, there are many distinctions.
Crossing borders: The pandemic spillover effect
In both countries, the pandemic and measures put in place to mitigate its spread have caused severe work-related burnout. Experts link this burnout and employees’ coping mechanisms to several factors outside of the workplace including strained relationships, adverse health issues, and fatigue.
But there’s a broader, deeper pandemic spillover effect. Across country borders, types of roles, industries and rates of pay, both job seekers and current employees are looking for more from their work and their workplace. More than higher pay, promotions, or perks, many workers are seeking employment that fulfills more subjective needs like self-worth, purpose and quality of life.
“More broadly, we’re seeing people examine, ‘What am I willing to do for work and what do I need to get paid?’” says Jessica Jensen, chief marketing officer at Indeed.
“Women and men – especially those who are newer to the workforce – are asking the question, ‘Am I paid enough to work this much or this hard?’ And perhaps more importantly, ‘Is this job making a positive difference in the world?’ People are talking about ‘The Great Resignation,’ but I think it is more of a ‘Great Re-Evaluation.’”
Canadian labour market outlook: Canada Is recovering faster – or Is it?
According to the most recent Canadian labour market findings by the Indeed Hiring Lab, as of November 2021, Canada’s labour market has recovered faster than the U.S.
At the end of 2021, Canadian employment rates were closer to pre-pandemic levels compared to those in the U.S The Canadian recovery was led by stronger rebounds across a range of mid- and high-paying industries.
For instance, workers in professional and technical services, health care and social assistance, and construction have led the way for Canada’s relative rebound. However, Canada’s predominantly high-paying industry growth may translate to a disproportionate recovery that leaves lower-paying industries – and the people who work in them – at a disadvantage.
Interestingly, employment rates have increased among parents of young children more strongly in Canada as compared to the U.S. The share of working of Canadian mothers and fathers was up 1.8 percentage points in November from pre-pandemic levels, while the employment rate of American fathers remained down 0.8 percentage points and American mothers were down by 2.2 percentage points.
One trend that has likely aided the Canadian recovery is that workers of different demographics have been able to shift towards growing sectors. At the same time, much like the U.S, employment in Canadian hospitality and restaurant industries remain stalled and jobs in these industries typically are filled by women. The “she-cession,” a term originated by Armine Yalnizyan, an economist with the Atkinson Foundation in Toronto, has staying power across both labour markets.
However, there are two gains in the U.S. labour market that haven’t yet surfaced in Canada. First, U.S. workers are changing jobs more frequently, while Canadian job switching was relatively subdued throughout the year. As a result, wages grew by 4.6 percent year-over-year in the U.S. in the third quarter, 2 percentage points higher than in Canada. Secondly, there’s one reversed trend: Canadian self-employment is dropping as the job market has recovered, while self-employment in the U.S. in 2022 is above pre-pandemic levels.
And finally, it appears as if Canada has not yet experienced ‘The Great Re-Evaluation’ as significantly as the U.S. While pressure is on for employers in both labour markets, U.S. companies have felt it earlier in the pandemic. Canadian employers can seize this narrow window of opportunity to proactively address the related challenges already in full swing in the U.S. labour market.
Beyond these labour market trends, HR leaders are grappling with the pandemic spillover effect” affecting the health and well-being of workers who are dealing with the many and ongoing challenges presented or intensified by COVID-19.
In the U.S., many see ‘The Great Re-Evaluation’ as a spillover effect of the pandemic and challenges of shifting to remote work. That’s why there’s an increased focus on wellbeing, especially given the demands of juggling work, childcare, schooling and health monitoring, which falls disproportionately on women in the workforce. There’s little reason in current trends and data to expect that the pandemic spillover effect in Canada will be any less widespread.
Given that ‘The Great Re-Evaluation’ has hit the U.S. earlier than Canada, employers will be well-served by looking at how U.S. employers are addressing increased and sustained rates of job switches and exits. Canadian companies may continue to lead the way in employment rates by leveraging learnings and focusing on work happiness.
1. “Blog: Our Aging Population-a Serious Problem for Canada.” Fraser Institute, 5 Jan. 2022, https://www.fraserinstitute.org/blogs/our-aging-population-a-serious-problem-for-canada
2. Bernard, Brendon. “Canadian Labour Market 2021 Review and Outlook.” Indeed Hiring Lab Canada, 7 Jan. 2022, https://www.hiringlab.org/en-ca/2022/01/05/canadian-labour-market-2021-review-and-outlook/
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5. Skrzypinski, Catherine. “Working Women in Canada Left behind during COVID-19 Pandemic.” SHRM, SHRM, 2 Aug. 2021, https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/canada-women-covid-19.aspx
6. StatCan, https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1410028703
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8. “Women in the Workplace 2021.” McKinsey & Company, McKinsey & Company, 2 Nov. 2021, https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace
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