Canada’s workforce is undergoing major changes, leading to new challenges and opportunities for employers?across the country. More recent data suggest an inconsistent unemployment rate and even a significant jump to 6.8% in November 2024, the highest since January 2017 (setting pandemic?years aside). That was in the face of an?increase of 50,500 jobs and an expansion of the labour force by 137,800, so overall job growth failed to keep pace.
By December 2024, the economy?had recovered, with new jobs surging by 90,900, nearly four times the predicted number, and the unemployment rate had dipped to 6.7%. That November job market continuation brought an additional 76,000 jobs in January 2025, and the unemployment rate stayed at 6.6%.
However, these gains have done little to relieve recruitment and retention challenges among Canadian employers. A survey of businesses carried out by Leger for the Chartered Professionals in Human Resources (CPHR) and the Human Resources Professionals Association (HRPA) found that close to 90% are hitting recruitment roadblocks, and about 72% reported retention problems.
Andrew Rasheed, Manning Elliott’s Director of Human Resources and Operations, says it’s crucial to be flexible when tackling these issues.
“Because employees have adapted these work-life arrangements from pandemic to present day time, they are no longer seen?as a benefit, but a requirement, for employees,” Rasheed states. “With talent expectations changing, organizations need to change with the times to attract and retain top talent.”
The survey found hesitation to apply as the?number-one obstacle to recruitment, followed by abdication of job offers, not having the requisite hard skills, and a lack of experience. Overall, employers have been re-evaluating?compensation packages, improving wellness programs, and implementing flexible work options to increase retention. About 79% of the employers observed a slight increase in employee engagement?on making changes to their rewards and recognition programs.
“Manning Elliott has been lucky enough to?build a cultural environment that supports work-life balance and individual needs. That methodology has proved effective at keeping our leading?talent in the industry,” says Rasheed.
Workload management continues to be a?concern, as 91% of HR professionals have noted increased workloads in the past year, while only 37% have received more support. This imbalance can result in employee burnout and lower labor?productivity, worsening retention problems.
However, diversity, equity, and inclusion (DEI) efforts have emerged as dominant focus areas in?organizational plans. According to the survey, formal DEI strategies are in place at 55% of HR professionals surveyed, and 76% have launched or are?preparing to launch DEI initiatives in the near term. On the other hand, 35-40% report?noticeable improvements across multiple DEI metrics, and a similar number are unsure of the impact of their efforts.
“Investing in diversity and inclusivity?not only enhances our corporate culture but also fuels innovation and mirrors the diverse community we serve,” Rasheed explains.
The Canadian mining sector reflects similar frustrations in?the broader labour market. Mining companies are predicted to face a crisis of skills shortages amid an uptick in the demand for minerals vital in modern technologies, with an estimated 10,000 job vacancies. Promoting the sector’s sustainability credentials and implementing innovative digital?technologies have also been part of efforts to attract a younger and diverse talent pipeline.
Statistics Canada predicts that by 2041, between 38.2% and 43.0% of the?total Canadian population will belong to a visible minority group in Canada, compared with 26.5% in 2021. The working-age population (15 to 64 years) is projected to make up between?42.1% and 47.3% by 2041. This demographic shift highlights?the need for DEI initiatives and culturally responsive workplace policies.
With that in mind, Canada’s labor market is in flux, and employers should engage and resolve recruitment and retention challenges by creating flexible, inclusive, and supportive work environments. This allows?them to choose the right path in the mess of today’s world and set themselves up for success in the long term.
