Discussions with Leadership: A Look into Canada’s Hiring Market

Aixal Consulting recently had the opportunity to discuss the current hiring challenges and opportunities in the Canadian hiring market with business leaders.

These discussions yielded many valuable insights, and we want to thank everyone who participated. This article highlights the common themes and ideas resulting from the conversations to help leaders tailor their hiring strategies and goals for the rest of the year.

Reflecting on The Hiring Market in 2023

In addition to getting insight into the hiring challenges of 2024, we asked hiring leadership about their experiences in 2023 to compare. One notable theme was that hiring was limited. Despite varying degrees of success, a significant number of companies chose to maintain their workforce numbers, closely mirroring figures from the start of the year.

We found the observations varied considerably for 2023 depending on the industry and market segment.

• Hiring was significantly down across the Technology, Software and IT industries as well as Residential/High Rise Construction, somewhat suprisingly.
• Civil Infrastructure, especially transportation and land development were extremely busy with many companies identifying a shortage of experienced candidates as a main barrier to continued growth.
• Industrial Automation, Robotics and plant Automation continued to grow along with companies working in AI and Machine Learning.
• Pharmaceutical/Biotechnology and Medical Devices were mixed, with some restructuring but the majority keeping headcount fairly consistent.

Broad conclusions about the Canadian Hiring Market in 2023 are hard to make as hiring seemed to be sporadic across differing industries and varied across companies, even within the same industry sector. Overall, it has been estimated that 24-30% of companies had layoffs in 2023.

What drove this behaviour?

This cautious approach was largely driven by uncertainties surrounding market directions and concerns over financing costs. Hiring activities were restrained, with only critical roles being filled, highlighting a year marked by caution and recalibration.

The Hiring Market in 2024

As we move through 2024, we noted a sense of optimism cautiously emerging among Canadian business leaders.

The consensus leans towards an expectation of renewed hiring activities and possible expansions by the end of Q2 or the beginning of Q3. This forecast suggests a break from the hiring freezes or limited hiring phases that spanned the last 18 to 24 months, signalling a potential shift toward growth and development.

It is also worth noting that the job market in Canada is experiencing a significant surge in demand for skilled workers across multiple sectors, resulting in substantial job growth in 2024. Canada's economy saw a GDP growth rate of 3.5%, supported by favourable monetary measures and government policies.

This, combined with the optimistic attitude of the hiring leaders we talked with, suggests that the second half of 2024 will be a strong period for hiring.

What Are The Main Hiring Challenges This Year?

2024 doesn't come without its problems, as many are already facing. The main ongoing challenge remains the scarcity of talent, particularly at the professional level, where there's a noticeable gap between the skills available in the job market and those required by employers.

Additionally, recurring issues included:

• The rise in candidates seeking remote work poses a significant challenge for businesses accustomed to traditional office settings. There's higher competition for talent and new pressure to ensure employers find the right talent among a much wider pool of candidates.
• High compensation expectations. This is mainly due to the increase in the cost of living, and candidates are seeking more than numerical compensation. Flexible work arrangements, professional development opportunities, unlimited paid time off, and paid volunteer days are just some of the benefits expected to attract and retain talent.
• The daunting task of filtering through an overwhelming number of unsuitable applications further complicates the hiring process. Not only does this create a heavy and time-consuming administrative workload, but it also increases the difficulty of finding the ideal candidate.

Workplace Preferences: Remote, Hybrid, or In-office?

One of the most significant topics of discussion is the models we'll adopt in the workplace. While many businesses are pushing for employees to return to the office, either in a hybrid capacity or full-time, employees are resisting this move, preferring the flexibility of hybrid or completely remote roles.

From the candidate's perspective, Canadian workers prefer a hybrid work model that combines remote work and in-office work. Studies show that many employees favour this model, which offers flexibility and balance.

Although it's worth noting that not all jobs can be made hybrid, it'll be interesting to see if leaders who do offer this will come out on top in the competition for high-performance talent.

The Role of Immigration

Despite a record surge in Canada's immigration numbers in recent years, employers have reported that it has not significantly addressed talent shortages for professional positions. There are several potential reasons for this:

• Mismatch in immigrants' skills and labour market needs: Immigrants' skill sets may not align with Canada's labour market demands, especially for professional positions.
• Focus on short-term labour market demands: Canada's current immigration system may be too focused on addressing short-term labour shortages in low-skilled sectors, resulting in a rise in non-permanent residents. This has put pressure on housing, social services, and public support for immigration.
• Infrastructure capacity challenges: Canada needs to strategically update its immigration policies to focus on immigrant outcomes and long-term needs while considering the capacity of infrastructure to accommodate newcomers. This is crucial for maintaining economic prosperity and Canada's high quality of life.
• Credential recognition and employment barriers: Immigrants encounter difficulties with credential recognition and finding suitable employment due to employers' struggle to assess credentials and the costly and lengthy certification process.
• Two-step immigration process: Canada's two-step immigration process may not address broader labour market issues despite initially boosting employment numbers.

This snapshot highlights the complexity of the hiring challenge, suggesting that the solution may require more nuanced strategies than just increasing the labour pool.

The Emergence of AI and Automation

Based on our discussions with hiring leaders, it appears that Canadian companies are only starting to explore the potential of AI and automation. While manufacturing entities have incorporated robotics and automation into their operations, many companies have yet to fully embrace AI. However, most companies are at least exploring the idea to determine if it would be beneficial to their business.

In recruitment, AI tools have yet to make a convincing impact, with both employers and candidates expressing reservations about their effectiveness and personal touch. Talent Acquisition and Hiring Managers have a deep desire for AI tools that could effectively handle the heavy administrative aspects of recruiting, however, the accuracy and algorithmic bias is a significant concern. Being an industry that's based on people, this is a considerable challenge to overcome.

Final Thoughts

I hope this article proved a useful read and provided insights into the thoughts and sentiments behind real Canadian businesses and leadership. If you'd like help navigating the challenges listed here either as a candidate or a client, please do message me directly here on LinkedIn or visit our site.