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Published August 4, 2022

With a Recession Looming, Is Now the Right Time to Change Jobs?

Job vacancies are high and wages are growing in Canada, but hiring is slowing in certain industries. Here's how to decide if now's the right time for a change.

Inflation and rising interest rates are rapidly sapping the Canadian economy of the heat generated by consumer spending earlier this year. In a recent forecast, RBC economists Nathan Janzen and Claire Fan predicted that the country’s economy will be pushed into “a moderate contraction” — economist-speak for “short-term recession” — in 2023.

If the groundwork has indeed been laid for a recession, Canadians may be second-guessing whether now is the right time to make the jump to a new employer.

“It feels like there’s a lot of heaviness now,” says Stefanie Ince, a certified career coach and founder of Toronto-based March Management. “There is an instinct for people to lock down and to feel like, ‘I’m safe here. I’m lucky to have a job. Let’s see this through.’”

The economy may be hitting a rough patch, but recent data suggests it could still be an opportune time to make a career move. Let’s take a look at Canada’s changing job market and ways to decide if now is the right time for you.

High vacancies and rising wages — for some

Two trends currently playing out in the labour market may give job seekers reason for optimism: a high number of job vacancies and rising wages.

Job vacancies

Canada is experiencing an acute labour shortage, which resulted in a record number of job vacancies — more than 957,000 — in the first quarter of 2022, according to Statistics Canada.

The vacancies were distributed across a number of industries, with the biggest gaps existing in:

  • Accommodation/food services: 133,800 vacancies.
  • Healthcare/social assistance: 136,800 vacancies.
  • Retail: 114,600 vacancies.
  • Construction: 81,500 vacancies.
  • Manufacturing: 87,400 vacancies.
  • Professional/scientific/technical services: 68,800 vacancies.

According to its most recent Business Outlook Survey, the Bank of Canada found that 42% of firms experienced labour shortages that restricted their ability to meet demand in the second quarter of 2022 — almost double the previous year’s figure.

Seventy-eight percent of the businesses surveyed said they would have at least some difficulty in meeting an unexpected increase in demand, so expect the hiring of qualified talent to remain a priority at companies with a long-term game plan.

Wages

The same Bank of Canada survey also found that 73% of businesses expect their labour costs to be higher over the next 12 months than they were the previous year, which could bode well for workers hoping to earn more if they move on.

Modest wage increases are already making their way into the market. The average hourly wage hit $31.24 in June, a year-over-year increase of 5.2%, according to Statistics Canada. That’s up from 3.3% in April and 3.9% in May.

Even though wages are rising generally, employers aren’t necessarily willing to pay significantly more for workers of all skill levels, says Alan Kearns, founder and managing partner atCareerJoy, a national HR services firm.

“We have too many people that are generalists and not enough specialists, so it’s creating opportunities in certain skill sets,” Kearns says. “It’s still a high-skill, high-wage economy and a low-skill, low-wage economy. Mid-skill is the hardest place to be.”

Lots of people are on the move. Will they get hired?

In June 2022 alone, 139,000 people left their jobs due to dissatisfaction, according to Statistics Canada. Hundreds of thousands more left for other reasons. That kind of churn could be an advantage for those looking to make a change.

Widespread movement among workers means businesses currently face a seller’s market. To attract and retain top talent, companies may feel compelled to provide better compensation in the form of rising wages and attention-grabbing benefits packages.

But improved compensation only comes into play if people are getting hired, and hiring slowed considerably in the second quarter of 2022, says Jennifer H. Lee, senior economist and managing director at BMO Capital Markets.

Rather than looking at month-to-month changes in jobs data, which she says “are generally pretty choppy,” Lee analyzed recent employment data from Statistics Canada in three-month increments. From February to April, Canada added a monthly average of 141,000 new jobs. From March to May, that figure dropped to less than 43,000. From April to June, an average of less than 4,000 new positions were filled.

What’s driving the decline? Financial realities for sure, but also the emotions of business owners. Both Ince and Kearns say their business clients are dealing with a level of unease that was nowhere to be found in the first few months of 2022.

“We’re seeing more and more clients that are pausing hiring, doing restructuring or looking at some leadership development things to make sure that their organizations are running in a much more efficient way than they have been,” Kearns says.

But Ince says companies are still bringing on new people.

“It’s happening. It’s just not happening in the way that it was a few months before,” she says.

Making the decision to jump

Headlines about inflation and recession are a lot to absorb, so it’s only natural to wonder whether now is a smart time to quit a job. Here are some tips to help shape your decision.

Think about what you really want

If the fear of recession is overwhelming your urge to quit, Ince says to view the next few months as an opportunity to think carefully about what isn’t working in your current position and plot your next move.

“If you’re unhappy, and you’re deep-diving into why you’re unhappy, often there’s a lot there,” she says. “It takes time to figure out what that is, and it’s better to start sooner than later.”

Upon reflection, you could discover that a few small changes — skill-building opportunities or the chance to take on a passion project — might make your current job more rewarding. Now’s the time to bring those desires up to your manager.

Or you might decide that satisfaction lies in another industry altogether. If you’ll need education or certification to prepare for such a leap, now might be the time to enroll in that online class.

Leverage inflation to find the right fit

Businesses know that inflation is doing a number on Canadians’  finances. You can use that information to your advantage when negotiating your compensation package.

Finding a company that’s willing to pay fairly in a time of economic uncertainty could result in another benefit: identifying a business that feels confident about its future.

“You’ve got to make sure that you’re [moving on to] an organization that’s healthy, that’s in a growing part of the economy, or that’s thriving with this economy, because those kinds of organizations will be able to reward their employees better than those that are struggling,” Kearns says.

Don’t get derailed by macroeconomics

Even if forecasts and headlines grow increasingly negative, remember that your next job application isn’t being submitted directly to the Canadian economy.

Recession or not, the dynamics of finding a new position remain the same: A talented individual markets their unique and growing skill set to a company that needs help. Hiring managers will be considering your resume, not the latest GDP stats.

A sluggish economy can’t change who you are or what you bring to a job. If you’re ready to make a move, approach the growing uncertainty as an opportunity to be more thoughtful about what you want. But don’t let it prevent you from trying to improve your life.

“It’s not an ideal time to do a lot of things,” Ince says. “But that doesn’t mean we shouldn’t do anything.”

About the Author

Clay Jarvis

Clay is a NerdWallet authority on mortgages. He has covered Canadian real estate since 2015, with bylines in Mortgage Broker News and Canadian Mortgage Professional, among others.

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