Vancouver's economy and labour market has gone through much the same challenges and cycles as that of other Canadian provinces over the past year. With trade barriers thrown up by the US last year, government spending impacted by reduced revenues and emergency spending/measures, housing prices falling dramatically, and BC's large travel industry being hammered by COVID accommodations, it is no wonder that last year was a difficult one. However, BC also benefits from a burgeoning high-tech industry -- a sector of the economy that actually benefitted from the health issues of 2020. This sector helped to lessen the blow overall and helps to set up the province and its largest city for a nice recovery.
Due to changing conditions across the board, BC is set to enjoy a Canada-leading rebound in 2021. According to the Business Intelligence for BC website, the unemployment rate is expected shrink to 6.5% this coming year (from 7.5% in 2020), to become one of the lowest of all provinces in Canada. And GDP is to expand 5.6% vs last year, again, more than what is forecast for any other province. Demand for housing, a strong underlying economic indicator, is forecasted to be strong, according to the Real Estate Board of Greater Vancouver. In fact, the Canadian Real Estate Association predicts that home prices are set to rebound strongly, growing by 9% this coming year. As well, TD Bank Economists expect that government stimulus will make a big impact this coming year. In addition to the Federal Gov'ts pledge to provide $70 - $100 billion in fiscal spending (across Canada), the BC Gov't is expected to invest $2 billion in new spending and contingencies in 2021. All this, along with more favorable trading terms expected with the United States and some return to normal travel helping both the tourism and hospitality industries, BC and Vancouver are set up for a very strong economic rebound this year.
Most of the economic benefits are expected to be seen over the final 6 to 8 months of the year as COVID accommodations are relaxed in lock step with the availability of the new vaccines. That said, businesses and industries are planning for these coming benefits now and this is beginning to drive additional demand for information technology knowledge workers. BC has already replaced over 90% of the jobs lost during the worst of the downturn last year (source: TD Bank Economists) and, as such, it is expected that knowledge workers of every stripe will be in shorter supply; perhaps no industry impacted as much as the IT industry that had already been somewhat insulated from the worst of 2020 economic impacts.
Demand for Eagle's staffing services were relatively strong throughout December of 2020. December is typically a slower month given year-end, vacations and holidays, but January is expected to be red-hot and, even during these first few days of January, requirements have been strong. Vancouver has always been rather steadfast as far as swings in contractor rates go. Never being the highest in Canada, but seldom being the lowest, 2021 may challenge this trend. Human resources (IT workers) that are experts in specialty roles in such areas as Cloud, Security, eCommerce, and Machine Learning/AI /Data Science will be harder to find and the expectations are that rates will increase over the coming year. Whereas roles in areas such as infrastructure, server, raised floor, networking, and application management are likely to have rates remain mostly unchanged. Experts who can build business /customer understanding, better insight, and drive scalable and secure efficiency will be in highest demand and earn the highest rates increases.
On a micro-level, the following are some of the hiring trends that Eagle is witnessing:
The level of experience demanded from our clients is higher, typically senior resources with solid project and/or domain knowledge.
We are being asked for more specialists than generalists. This is different from the "bottom" of the economic cycle, where our clients were seeking people who were generalists and could wear multiple hats and "keep the lights on". Today, our customers tend to ask for people who have expertise in a certain area and can go deep, delivering value to new projects.
There appears to be a balance between technical and functional roles. Demand is rising for both.
The "type" of technology being implemented is leading-edge vs. mainstream, with many cloud and AI projects and supporting business transformation initiatives. (although most organizations had to move their business transformation initiatives up earlier than they might have wanted to support work from home, etc. in 2020)
Contract hiring activity was slow-paced last year, but is now picking up its speed-to-hire. This will become critical as the market heats up this year. Companies who are slow to make hiring decisions will lose top candidates to others who are motivated to hire quickly.
As mentioned above, last year saw some downward pressure on contractors' rates. This year we expect this to rebound. How far and how fast depends on the speed with which the economy rebounds. All indications are that the economy is in for a strong improvement; rates will tend to follow.
Hiring organizations are more open to remote workers. This is a direct impact of the COVID accommodations that the entire world had to manage. Companies have learned how to operate effectively using people working remotely from one another. Organizations are able to cast a wider net for talent by adopting a work-from-anywhere approach.
Finally, we are seeing a change whereby job seekers are more active. People have been hunkered down, happy to have a stable position (if they were working through 2020). These people were not looking to make a move, afraid of jumping from the frying pan into the fire! This is rapidly changing as opportunities begin again to expand. People are open again to considering new opportunities that will allow them to learn new skills and/or advance their careers.
All in all, 2021 appears to be highly promising for BC, Vancouver, and the IT industry as a whole as we bounce back from the impact of the slowdowns of this past year.