Large numbers of unemployed Canadians have started looking for work again as provincial governments have gradually begun lifting COVID-19 restrictions. But the reality they face may be different from that of the pre-pandemic job market. To evolve in this new environment, it’s necessary to get familiar with what has changed.
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unemployment explosion
At the start of the year, the unemployment rate in Canada was at an almost record low—close to 5.5%. All through 2019, the rate remained below 6%. Over the past few years, prior to COVID-19, we had been navigating in a market built for job seekers. The talent shortage was so great that we predicted there would be a decade-long shortage of workers.
3 million jobs were lost in March and April. In May, the unemployment rate in Canada rose to 13.7%; the highest level in more than four decades of comparable data. That’s almost 2.5 times the rate from the beginning of the year.
service sectors have been affected more than consumer goods sectors
Repercussions of the crisis have varied from one sector to another. The service sector, particularly the travel, hospitality and leisure industries, were hit hard. Airlines laid off thousands of workers. In restaurants, temporary layoffs were widespread.
On the other hand, restaurant closures led to increased consumption of other goods. At the start of the pandemic, large retailers like Walmart Canada and Dollarama announced plans to ramp up hiring in an effort to meet high demand from consumers who were concerned about stocking up on food and essentials. Dollarama continues to hire across Canada as it expands its network of stores.
essential professions are particularly in demand
Certain trades that are often overlooked in normal circumstances saw a surge in demand due to the crisis. This is particularly true for healthcare professions, where nurses and other patient-care professionals were at the forefront of the pandemic. Accelerated training programs were developed to help meet the serious need for manpower in this field.
Customer service workers in shops, grocery stores, and pharmacies were also in high demand, as were cleaning and custodial staff who were essential for businesses looking to ramp up their sanitation and hygiene measures.
recovery is slow and uneven depending on the business sector
Despite numbers that suggest a strong economic recovery, a recent study published by Deloitte suggests that it will take six business quarters before the economy returns to its pre-crisis level. In terms of a timeline, this brings us to the end of 2021 or even the beginning of 2022. According to the study from Deloitte, due to the huge scale drop in economic activity, recovery will be very slow.
Some sectors, however, will rebound faster than others. Services directly related to the pandemic, such as healthcare and public administration, will likely rebound quickly and grow in demand as the pandemic progresses. On the other hand, sectors that will take the longest to recover include non-essential industries, such as entertainment and leisure as people spend more time at home, and the manufacturing of durable goods (like cars) as people put off making big purchases during the pandemic.
the impact of government programs
Government programs such as CERB and student aid have impacted certain industries. As a result of these programs, there’s a noticeable shortage of non-specialized labour in tourism, catering, and leisure sectors. Some workers prefer to rely on these aid programs, rather than return to the job market. This can create challenges for companies that rely on low-wage workers.
The situation is slightly different for more specialized positions. With the large number of people who have found themselves unemployed, businesses have access to a vast pool of available talent. However, the increased popularity of remote-work is a game-changer, as job seekers can now widen their search to include companies that are further away, as distance is no longer a constraint.
temporary labour and permanent positions
Businesses saw their revenues drop dramatically, with certain companies having to close for several weeks to several months.
An increase in the temporary workforce seems like a logical result of widespread budget cuts. However, this is only partially the case. The various government programs aimed at businesses (the CERB in particular) have a big impact on the recovery of the job market and on the type of job vacancies. As a result, there are a few different outcomes:
- SMEs that benefit from government-aid programs are opting to hire for permanent positions that are more attractive to job seekers, especially since the subsidies for these roles are much more beneficial for the company.
- In larger organizations, where the situation may be different, and the future remains uncertain, we continue to see temporary positions being offered to fulfill specific mandates, as well as seasonal or variable needs.
In a job market that defies the norm and presents new challenges, employers need to be able to reinvent themselves, highlight their employer brand, and master recruitment strategies to attract the best talent on the market.