From the Great Resignation to record low unemployment rates, we saw an incredibly tight labour market throughout 2022. But as the new year begins, we’re already seeing hiring intentions slightly dip and salaries begin to stabilize as a potential economic downturn approaches. So what’s in store for 2023? While we can’t predict the future, we are seeing some hiring trends continuing into the new year, as well as new trends developing.
That said, in a time of uncertainty and rapid market changes, the best course of action your business can take is ensuring your workforce is as strong as possible to address current and future obstacles. Create plans internally to ensure that you are surrounded by the best talent possible to find unique solutions and weather the economic storm. The businesses that do so are the ones that will come out of this year stronger than ever.
As such, this article will further dissect Ottawa’s job market in 2023 according to our industry experts to help you set your business up for success in the year to come despite the market uncertainty.
Uptick In Returns to Office
When it comes to a hybrid work model, we’re now seeing many companies put heavier weight behind being in office versus working from home. Following the federal government’s announcement last month requiring its employees to return to working in office 2-3 days a week, more companies are embracing an in-person work model again. This is especially true in Ottawa as has one of the highest percentages of office workers for a Canadian city due to its robust tech and government sectors. With 61% of Canadian employers using hybrid work models, many workers say they would look for new employment should hybrid work no longer be an option. As such, while we are seeing more emphasis on in-person office work, we suspect a hybrid approach will continue well past 2023. Read our blog post on how you can successfully develop a hybrid work environment here.
Demand for Talent Persisting
With Ottawa’s unemployment rate sitting at 4.9% and Canada’s at 5%, finding the right talent continues to be a persistent thorn in the side of many businesses who feel hindered by the inability to hire people with the right skills for their workforce. Addressing the skills shortage will still be imperative getting through an economic downturn in 2023. In certain industries the demand for talent will persist, looking at the current investments in housing and infrastructure, areas like the construction sector are still struggling to fulfill the demand for talent regardless of the market. However, even with an economic downturn, we may see workers pivot industries by reskilling. Reskilling and upskilling is one of the most effective ways to combat the worker shortage or the need to hire additional team members during uncertain times. By enhancing existing abilities in existing or new employees through continuous learning and training, companies will have the ability to pivot and adapt to external pressures and changes. Read our blog post on how you can upskill and reskill your team here.
Workers Prioritizing Job Security
As aforementioned, it is still a candidate-short market despite an overall dip in hiring due to workers prioritizing job security due to recession concerns. Due to the economic climate, many workers are facing layoff anxiety, which is why security and stability are extremely important motivators for employees right now. From this, we see two scenarios arising, the first being employees who will stay at their company for current job security due to recession concerns. The second scenario being those who will jump ship from their employer due to feeling that the industry or company could be prone to recession layoffs. In order to retain and attract talent, it’s crucial to foster confidence in your company through clear communication and expectations.
Reactive Hiring Versus Proactive
Despite looming concerns about a recession, we have seen many companies continue to hire as planned, although some have halted their plans to add on new talent until it’s revealed how hard the economy may be hit. That being said, the hiring we are seeing tends to be more reactive rather than proactive due to hesitation on expanding on teams during a possible recession. Reactive recruitment is about solving your company’s immediate hiring needs rather than anticipating future needs. For example, a company would react to the loss of an employee by initiating their own candidate search once the position has been vacated. However, this can take weeks or months of reading resumes and conducting interviews before finding the right employees, and during this time staff is having to take on additional responsibilities to compensate one less team member which ultimately puts a lot of pressure on human resources to find someone quickly. This is one of the many reasons using a recruitment agency can be imperative to quickly sourcing the right employee especially during a period when a company can’t afford to fall behind.
Tech Skills Remain Prevalent
Stabilization of Salaries
While we still see companies being flexible on salary bands in order to attract and retain the right talent long-term, we are seeing the market value for roles stabilize after a year of hikes in 2022. That said, while salary increases are cooling off, we don’t suspect salaries to return as low as pre-pandemic norms. With rising inflation and changing employee expectations, salaries should remain consistent. It’ll be important for businesses to do the research into average compensation for the position they offer to ensure they’re still on par with market value. For the most up-to-date salary data available, we encourage you to download our Salary Guides here.
As the job market changes continuously and competitive pressures in finding quality candidates increase, having the right staffing partner can make all the difference in finding the right fit for your role. If you’re a business searching for quality employees in a contract or permanent capacity, LRO Staffing can provide access to the best talent in the markets we serve. Click here to get in touch with one of our experienced recruiters today.