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  • Writer's pictureTyler Swabey

Canadian Labour Market Snapshot - March 2023

Updated: Apr 3, 2023

Introducing our newest monthly series - the Talent Market Snapshot! Our aim is to offer you a speedy overview of the Canadian labour market over the past 30 days. Each month, we'll be highlighting workforce trends, tech investment updates, and sharing the biggest stories that have had a major impact on the job market and tech industry. Don't forget to check out our monthly Artemis Update series for an even closer look at what's happening in the Canadian tech scene on the ground level.

Canadian Labour Market Snapshot

💼 5.0% unemployment rate, just shy of the record low of 4.9%

🤖+2.1% (+84,000) employment in the tech industry, highest among all industries

🌱 22K net-new jobs across all industries

💰 5.6% YoY wage growth, reaching $33.16 in Feb

👩🏻‍💻 60.8% employment rate for women aged 55-64, a record high

💻 18.6% of all job openings are remote roles

👇 The story behind the numbers

The Canadian labour market has been making headlines lately, and the February 2023 Labour Force Survey report shows why. Despite a slowdown in the overall economy, employment remains surprisingly strong, with the unemployment rate holding steady at a historically low 5%. While the Bank of Canada has been raising interest rates in an attempt to curb inflation, employment and wage growth have not been crushed as policymakers may have expected.

Interestingly, the tech industry has been a standout performer, with employment in professional, scientific and technical services holding steady in January and February. This industry has seen strong year-over-year growth, with employment up 4.7% and hourly wages up 9.6% over the same period. Hourly wage growth across all industries is also above 5%, although it is highly uneven.

Women have been making strides in the labour market, with women aged 55-64 seeing a record-high employment rate of 60.8%. However, there is still work to be done in closing the gender wage gap, which actually increased in 2022 for the first time since 2016.

The Conference Board of Canada has warned that persistent wage growth could contribute to inflation, and it is clear that there is a mismatch between employment and output growth. With little or no productivity growth, wage growth can fuel consumer demand while increasing supply-side pressure, raising unit labour costs and contributing to inflation.

Looking ahead, the path of growth for the Canadian economy is expected to slow to a near stall in the early to mid-part of 2023, with inflation continuing to ease throughout the year. This could hit businesses harder, as a weaker inventory build eases demand through the supply chain for merchandise, affecting trade, transportation, and manufacturing. However, conditions are expected to improve by the end of the year, with growth ticking up slightly in 2024 as the economy regains some of its lost momentum and borrowing costs begin to ease.

Overall, while the Canadian labour market is showing resilience despite a slowdown in the economy, there are still challenges to be addressed, including the gender wage gap and the potential inflationary effects of persistent wage growth. The tech industry, however, is one bright spot in an otherwise uncertain economic landscape.

Read more of our analysis on the current state of the tech labour market here!

👇 Click images to enlarge


Tech Investment Trends in Canada

2022 Q4 vs 2023 Q1 (Jan 1 - March 31)

📉 -64.2% decrease in total tech investment

📉 -8.9% decrease in Series A+ deal volume

📉 -28.4% decrease in Series A deal size

📉 -42.1% decrease in Seed deal volume

📈 53.7% increase in Seed deal size

👇 Click images to enlarge

Analysis and impact on the tech labour market

The decline in tech stocks and the Nasdaq's second-worst quarter since the 2008 financial crisis have prompted venture capital firms like Sequoia Capital and Y Combinator to advise startups to prepare for worsening conditions. The poor public market performance of tech companies is starting to significantly impact VC investing, in contrast to the bullish market of 2021. Startups are now focusing on extending their cash runway to last at least two years, anticipating less favourable future financings. This situation is causing significant changes in the tech labour market, with companies slowing down hiring processes, and layoffs occurring in both public and private tech firms to reduce costs and extend their cash runway.

As a result, fewer job openings and increased competition for available positions are expected, along with potential wage stagnation or decline due to reduced demand for tech talent. A shift in skill demand may also occur as companies prioritize cutting costs and improving efficiency. However, opportunities might still arise for top talent to join companies that seize the chance to hire skilled professionals made available by hiring freezes and layoffs at other organizations.

Adding to these challenges, the recent closure of Silicon Valley Bank (SVB) in Canada has impacted the Canadian tech ecosystem, causing concerns about access to funding for Canadian startups. This closure may further exacerbate the struggles faced by startups and the tech labor market in the short term.

Despite these challenges, the tech industry has historically been resilient, and new opportunities are likely to emerge as the market adapts to these changes. Venture firms emphasize that great companies can emerge from difficult times, and opportunities still exist to build and invest in influential technology companies.

Top Stories in Canadian Tech

♻️ Green is the colour of the 2023 federal budget, with the Liberal government offering huge clean-energy and manufacturing incentives in an effort to keep up with billions of dollars the U.S. is doling out.

Key takeaways:

🤖 Canadian AI governance leaders among an influential group of signatories backing an open letter to pause the training of AI systems more powerful than GPT-4 for at least six months, to develop shared safety protocols for advanced AI design and development that are overseen by independent outside experts.

Key takeaways:

🍁 At the C100 Summit, Canada’s tech leaders are optimistic despite the chill.

Key takeaways:

🏦 The collapse of Silicon Valley Bank (SVB) could have a cooling effect on Canada's start-up industry.

Key takeaways:

Special Feature:

Dear Artemis Lightning Round

Dear Artemis,

I’m interviewing with a PE-backed company. I’ve always worked in VC-backed companies. What are some key differences I should be aware of?

Great question! PE-backed companies tend to be different in these ways:

  • Larger, more mature organizations

  • The tech company has proven product-market fit and reliable revenue

  • Often more security and stability in the org’s growth, and access to capital

  • Bigger focus on sustainable growth vs “growth at all costs”

  • Bigger focus on maintaining healthy levels of spend

  • More experienced leadership teams (and often non-founding executives)

  • M&A is more likely, as PE firms typically are looking to increase valuation and eventually sell

  • The PE firm typically has 100% ownership of the company

VC & PE backed orgs have similarities, too. Including:

  • Both VC and PE investors often provide operational support

  • Access to their talent network

  • An evolutionary view of talent, ie wanting to keep great talent within portfolio companies

Artemis Canada is a boutique executive search firm specializing in placing top talent in the tech sector across Canada, the United States, and Europe. Our team of experienced recruiters has a proven track record of finding exceptional candidates for a variety of roles, from C-suite positions to high-demand individual contributors.


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