“The New Normal” is a phrase that has been used to describe the aftermath of a paradigm-changing event. As recently as 2014, Calgary’s economy/job market/opportunity outlook was very robust, then the floor fell out of the oil market. Since then, over 40,000 knowledge worker jobs were lost and the city is sitting at 8.6% unemployment, 1.7% higher than the Canadian average of 6.9%. Economists are predicting a continued contraction, but at a slowing rate, as Calgary find its new equilibrium.
Over the next 12 months, economic conditions will continue to improve, but few believe that the economic spin-off from the Oil industry can or will reach the pre-oil-crash highs. Some companies are gone completely — whole industries have been shipped off to be served by the global labour force. These are unlikely to come back. Hence, talk of “the new normal”.
As the Calgary economy does begin turning around, it is anticipated that independent contractors (contingent labour) will be leveraged prior to direct, permanent job openings seeing a recovery. New expectations with respect to lower contract rates and salaries will need to be adopted by the labour market, which is happening already. The premiums that Calgary workers have enjoyed for close to a decade will be brought in line, nearer to those of the rest of Canada. Companies will do their best to stick to the cost-cutting plans that they’ve put in place, resulting in limited opportunity to raise rates and build larger teams; and we may see stronger interest in “generalists” vs. “specialists” as the need to wear multiple hats will likely exist.
In the vacuum created by Calgary’s imploded Oil and Gas industry, we are seeing this city’s entrepreneurial spirit sparking to life. Calgary has one of the youngest and best educated labour markets in North America. Prairie values of strong work ethic and the ability to tighten belts are resulting in people making the needed adaptations to take transferable skills to other new and existing industries. Organizations such asCalgary Economic Developmentare actively pursuing companies/industries remote to the city, encouraging them to re-locate or open new offices to take advantage of the surplus of knowledge workers, including many IT professionals, now available. Some nay-sayers are beginning to draw parallels between Calgary and Detroit; however, the skills, education and entrepreneurial spirit truly set Calgarians apart. A good article discussingCalgary’s favourable outlook can be found in this Globe and Mail article.
So, what is the “new normal” for the labour market in Calgary? Well for the short to medium term, it is certainly going to mean continued pressure on independent contractor rates and employee salaries; and many Oil and Gas positions have left, never to return again. However, in the medium-long term, Calgary’s prospects are still very bright — there will be a period of transition, re-building and re-tooling but the raw energy, enthusiasm and talent that exists in Calgary’s working population will help the City to re-invent itself. The hurdles will be great, but our collective determination will be greater. Calgary’s potential remains unmatched and it will, again, be the pearl of Canada’s labour market; Calgary’s economy will re-emerge, more diversified and, in this way, stronger than before.