Amid an uncertain economic future, experts see a labour market stalemate heading into 2024
Amid an uncertain economic future, experts see a labour market ... The Globe and Mail
Quiet Job Market Reflects Caution Amid Economic Uncertainty
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.
Caution Amid Economic Uncertainty
Recent studies suggest that persistent inflation, high interest rates, an uncertain economic future, and 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.’”
Impact on Talent Acquisition and Compensation
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.
Focus on Internal Equity and Limited External Hiring
During the late pandemic economic boom of early 2022 – as the unemployment rate hit near record lows and resignation 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.
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 proactive, to take action and get ahead of the legislation,” says Marvin Reyes, the compensation consulting leader at EY Canada.
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.
Lengthy Hiring Processes and Increased Competition
What minimal hiring that is currently underway 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.
This delay is largely due to the reduction in human resources and talent acquisition professionals, causing employers to freeze hiring. As a result, job seekers are advised to utilize referrals and networking to increase their chances of being noticed in the competitive market.
Expectations for the Future
This relatively quiet labour market may experience a temporary surge in hiring early in the New Year as some organizations lift their hiring freezes. However, the future remains unpredictable.
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