A 2024 trend difficult to predict on the employment front

2023-11-25 09:00:47

This text is part of the special section Unionism

On the job market, the start of 2023 was especially marked by the labor shortage in several sectors. The latter, however, is ending with a few waves of layoffs from large companies making headlines recently. What should we expect in 2024?

According to Benoit Dostie, full professor in the Department of Applied Economics at HEC Montréal, the situation in Quebec remains uncertain for the moment. “You might think that the job market will remain tight, with the labor shortages that we talk about a lot these days, but on the other hand, we seem to be plunging into the unknown,” notes the one who is also academic director of the Quebec Interuniversity Center for Social Statistics.

Since the effects of interest rate increases remain little known, job market trends are therefore difficult to predict for 2024, explains Mr. Dostie. Remember that for a year and a half, the key rate has continued to rise, reaching 5.0% today. “Often, the full effect of the interest rate increase takes time to become apparent. It’s a little uncertain at the moment to know how the job market will react to this increase,” he continues.

Focus on digital

Even if the evolution of the economic situation in the province remains uncertain for the moment, certain challenges are likely to follow us until next year, predicts the professor. Regarding the labor shortage, “I hesitate to use that term. Often, the shortage we see is rather an employer who cannot find the employees he wants to find at the salary he offers. These are imbalances between supply and demand,” he believes. The latter thinks that these “imbalances” should be resolved in the short or medium term, provided that “the labor market functions properly”.

“But in a context where employers are short of employees, we often think of the solution that we need more individuals in the job market. On the other hand, employers should rather improve their productivity,” he believes. This suggests in particular making changes to the organizational mode of work as well as investing in technology to achieve this.

Vivian Li, senior economist at Dais, an institute affiliated with Toronto Metropolitan University, shares the same opinion: digital skills will undoubtedly be highly sought-after skills in the Canadian job market in 2024. “Our research concludes that many workers do not have the digital skills that employers need,” she observes, citing The Skills Algorithm. Digital Skills Demand Across Canada’s Labour Market, a study published by Dais in November. Data entry, mastery of office and administrative software and even videoconferencing and online messaging tools allowing working from home are some of these popular skills.

“When it comes to more advanced digital skills, we can think of skills in coding, machine learning and artificial intelligence, which are in high demand due to the excitement around products and services of generative AI,” explains the researcher.

Future of employment

From the point of view of employment prospects in the country, Vivian Li believes in a “reversal of the tightening of the market” in the next year. “In mid-2021 to mid-2022, there were a lot of job offers and vacancies. In the service sector, supply had become so abundant that it exceeded the available workforce. Workers had greater bargaining power, particularly in terms of wages. And it was easier for them to change jobs,” she illustrates. M^me Li is thinking, for example, of industries such as retail, catering and even accommodation.

However, things have changed, she notes, notably due to the rise in interest rates. Job opportunities are declining, which also risks making it more difficult for new graduates to enter the market, warns Vivian Li. “It’s more and more expensive for a company to borrow. We are seeing a lot of layoffs, especially in the banking and technology sectors. It costs more for an employer to hire, which means there are fewer offers. If the interest rate continues to be this high, we can expect next year to be in the same vein,” she concludes.

This content was produced by the Special Publications team at Duty, relating to marketing. The writing of the Duty did not take part.