After years of unprecedented shifts in the labour market – from “the Great Resignation,” to “quiet quitting” to “quiet firing” and finally “quiet hiring” – the career landscape is just plain quiet, at least for now.
Recent studies suggest that persistent inflation, high interest rates, an uncertain economic future and some lessons learned during recent labour market trends have both employers and employees moving cautiously into the new year. While employees are hoping for a raise to help them overcome the rising cost of living, organizations are being cautious with their spending. Meanwhile, neither side wants to make any major changes without greater economic clarity, leading to a job transition stalemate.
“Due to the difficulty of reading the economic tea leaves of what 2024 will bring us, those on the company side are just trying to make sure they get it right on head count investment and infrastructure expansion – they’re being a little cautious,” says David King, a senior managing director at Robert Half Canada. “On the other side of the equation we see employees who are saying, ‘I’m more than ready to leave and find a new opportunity, but I’m a little cautious, given where the economy is.’”
According to Robert Half Canada’s 2024 Salary Guide, 92 per cent of managers are struggling to find talent and 35 per cent report an increase in candidates seeking to negotiate for greater compensation. At the same time nearly 40 per cent of job seekers say compensation packages aren’t meeting their expectations, and the same proportion is frustrated by lengthy and complicated interview processes.
In lieu of higher salaries, employers are increasingly looking to non-monetary perks to help attract and retain staff, while leaning more heavily on temporary workers. According to Robert Half’s Salary Guide, 40 per cent are enhancing their remote and hybrid work policies, while 65 per cent plan to increase their use of contract workers.
During the late pandemic economic boom of early 2022 – as the unemployment rate hit near record lows and resignations rates hit near record highs – many employers went on hiring sprees, only to find themselves making cuts when the economy cooled months later. Now they’re looking for a more sustainable equilibrium to start 2024 by focusing their limited resources internally rather than on hiring, according to Marvin Reyes, the compensation consulting leader at EY Canada.
“A lot of organizations had to be competitive in the market to attract and retain the right talent, but the issue was not revisiting [the salaries of] the employees that already existed and [organizations] are now rightsizing pay to ensure there is some form of internal equity amongst the current population,” he says.
Ensuring internal pay equity is especially important for employers in places like British Columbia, Newfoundland, Prince Edward Island and soon Ontario, where pay transparency is required in job postings. “It’s really pushing employers to be more pro-active, to take action and get ahead of the legislation,” Mr. Reyes says. As a result, he believes the staff who will see the biggest pay increases in the New Year are those who are currently underpaid compared to their more recently hired colleagues.
External hiring will continue to take a back seat, at least until organizations have more confidence in the direction of the economy. For the meantime, the country’s limited job market activity is expected to remain focused on more strategic and senior hires, as well as more short-term contract positions, according to Ian Kinsella, the Toronto-based managing director of recruiting firm Morgan McKinley’s North American practice.
“Our contract business is busier on the back of this,” he says. Mr. Kinsella explains that many organizations are using temporary hires to circumvent hiring freezes and budget restrictions while they wait for a more stable economic landscape. “The view with a lot of folks is in six, nine, 12 months maybe they’ll convert that [temporary contractor] to permanent, so it’s a little loophole.”
What minimal hiring that is currently under way is also taking a lot longer. According to a Robert Half Canada survey, employers now take an average of 14 weeks to hire, compared to just eight weeks in 2021.
Mr. Kinsella says the delay is largely because many human resources and talent acquisition professionals were let go or moved elsewhere when the economy took a turn for the worse around the middle of 2022, causing employers to freeze hiring.
“Now talent acquisition teams can’t get through all the applicants,” he says. “If you need to get a job, you need to hustle, you need to use referrals, you need to be networking – you can’t rely on an application, because it’s not going to get seen. That’s the reality of the market we’re in.”
This relatively quiet labour market, however, may be jolted back to life early in the New Year, according to Mr. Kinsella, at least temporarily.
He explains that some of Morgan McKinley’s clients are forecasting “a nice hiring spree in January, because some folks have had hiring freezes going since 2022 until now, so the reigns might loosen a little bit,” he says. “There could be a little bubble – I’m hoping that there is – but after that, it’s extremely unpredictable.”