K-shaped recovery solidifies in Canada with a month of part time losses diverging from a steady recovery for highly skilled work.
In the Labour Force Survey for the month of January 2021, Statistics Canada has reported a net loss in employment of 1.2%, or over 212,000 jobs, for a total employment of 18,272k.1 In kind, the unemployment rate rose by 0.6% to a total of 9.4%—its highest point since August—with the most change in Ontario and Quebec.1 These losses are largely owed to renewed COVID-19 restrictions across the country.
With this month’s data release, economists can begin making predictions for the first quarter of 2021. So far, though hope is on the horizon, the darkest days may yet lie ahead for the Canadian economy and job market.
This month, part time work bore the brunt of the losses, and plummeted by -12.2%, or 435k, when compared with the pre-pandemic baseline of February 2020.1 Comparatively, full time work was down only -2.7% over the same period.1 This change reflects the ongoing K-Shaped recovery of Canada’s economy in which high skilled jobs and the top end of the economy is recovering more quickly than part time, entry level, or “unskilled” work at the bottom.
K-Shaped Economic Recovery to Continue
“The nature of a K-Shaped economic recovery is such that those workers in what are often called ‘unskilled’ positions are in a much more vulnerable place,” says Henry Goldbeck, CEO of Goldbeck Recruiting. “For managerial and executive positions, or those candidates qualified for high skill or specialized roles, continues to recover steadily.”2
Following months of slowing employment growth, economists estimated that Canada would lose 32,500 jobs in December of 2020—instead, the market lost 62,600 jobs, almost double the original forecast.3 The same underestimation of the losses seems to have occurred in January. These losses are made more concerning given that the groups impacted most are young people aged 15 to 24 and workers over age 55; this trend overwhelmingly continued in January, with a substantial portion of jobs lost belonging to teenagers.1 For both of these groups, securing lasting work—especially after being laid off—will continue to be very challenging.
“We can hope to see an uptick in these sorts of roles—including service and hospitality—once Canada’s vaccine rollout begins to reach a critical mass,” says Goldbeck. “But in the meantime, I do believe those searching for employment in those sectors and those age groups might continue to struggle, which is very unfortunate.”2
However, on the upper arm of the K—the skilled workforce—things are looking up, and business is continuing to recover steadily.
“Storm Guard is a good example, we are actively hiring for technical, administrative, and leadership roles—and the competition to secure those quality candidates is fierce.”4
Lance Neale, Chairman of the Board at Storm Guard Water Treatment Inc.
This competition is only bolstered by continued fear about market stability; candidates’ concern about job security continues to impact their willingness to move. It also impacts contract negotiations. “The themes we’re seeing include higher compensation, and more flexibility,” says Neale. “People are wanting to work from home more; they’re wanting access to time off.”4 With competition in this market set to continue, it will likely remain difficult to lock in top quality candidates without anything short of a perfect contract. “But moving into 2021, I’m hopeful,” says Neale.4
The Dark Before the Dawn
This month the Bank of Canada (BoC) refrained from adding stimulus to the Canadian economy despite signs of a brief downturn in the first quarter of 2021.5 This move conveys certainty in the recovery of the Canadian economy in the mid to long term, though the country’s growing number of COVID-19 cases remains cause for great concern. While the BoC’s vote of confidence in the national economy bodes well for Canada’s bullish loonie, it seems unlikely that the job landscape will see any drastic change in shape as the most vulnerable positions—low wage, part time, unskilled—have not yet recovered from the first salvo of losses in the early months of the pandemic.
“People remain unsure about moving into new positions because there is so much uncertainty in the market”6
Bev Hampson of Bulletproof Media
But the mood seems to be changing. “At this point, the companies that have made it this far are comfortable,” says Goldbeck. “They’ve worked out how to thrive in these uncertain circumstances and they’ll continue to do so. But for those that have continued to struggle through these critical months of the pandemic, it seems things will get worse before they get better.”2
Work From Home (WFH) Continues As Companies Consider Permanent Telecommuting
Last month, work from home numbers climbed sharply in January by over 700,000 to a total of 5.4M, setting up 2021 to finally resolve the question facing many employers: when the pandemic ends, will employees continue to work from home?1 “Our current situation has changed how we work for the better,” says Hampson. “Our team is working exclusively from home, and has adapted very well; the team has also become more creative because working from home has necessitated new, more efficient systems.”6
The pandemic gave pause to the C-Suites across the country that felt permanent WFH solutions were impossible; now, more companies than ever are contending with the possibility of a permanently remote workforce.
But, even a year in, the system still has kinks. “A lot of companies might see the value in allowing their workforce to remain remote,” says Judy Slutsky, HR Consultant at Goldbeck Recruiting.
“But the fact is, many companies are not tooled correctly to adequately lead and facilitate the performance of their teams in the long term.”7
Judy Slutsky, Goldbeck HR Consultant
Moving into the first quarter of 2021, the direction of this trend—be it continued WFH or returning to the office—will be an influential factor in employment in Canada. “Many candidates are reluctant to relocate for work,” says Goldbeck. “Permanent work from home means we’re able to place candidates in excellent positions without requiring them to uproot. This is a real opportunity to lock in high quality national talent and our clients are taking notice.”2
