By all accounts, Edmonton has had some challenges over the past few years, but I am happy to report that our team has seen a noticeable, positive shift since early fall. Back in September, I reported cautious optimism in the Edmonton market, as we were starting to see some signs of recovery. In spite of being under restrictive public health measures since mid-December, we continue to see an increase in demand for IT professionals for both contract and permanent roles.
Since September, Eagle’s job order volume and hiring in Edmonton have returned to pre-pandemic levels. Our clients have settled into remote work and are starting to see past “the grind” of the pandemic. While we are anticipating (and planning for) a recovery that has some bumps along the way, we are increasingly optimistic that the worst is behind us.
Current Labour Market Trends
Remote Work: With the world’s largest (and unplanned!) experiment in remote work well under way, one of the most common misconceptions about the workforce has been shattered… we CAN trust employees to do their jobs even if we can’t see them! Businesses were forced to rapidly transform as companies embraced remote work practices to adhere to public health measures. For the most part, organizations throughout our country have been pleasantly surprised at how successful remote work has been through the pandemic. Whether remote work continues post-pandemic remains to be seen, but we do believe there will be some form of hybrid work arrangements longer term. In the near term, this has resulted in access to a larger pool of talent as long as resources are willing to work in the time zone of the client for contract roles.
Wider use of contingent workers:As we expect uncertainty to continue through 2021, clients are increasingly leaning to contingent workers for project-based work to allow them to scale up or down should the need arise. While that may feel uncertain for people considering a contract role, rest assured that our clients make well thought out decisions prior to onboarding any contingent worker and funding is secured before contracts are written up. When hiring employees, most clients like to see a road map of 2+ years of work and growth before making an employment offer. With contract roles, that vision only needs to go the end of an approved project or milestone.
Pent-Up Demand: With the rapid shift to adapt technology, processes, structure and teams in a physically dispersed workforce, many of the projects that were deemed high priority on January 1st, 2020 became much less important a few short months later. Nearly a year into the pandemic, many companies have revisited that priority list and a number of new initiatives are kicking off.
Rates have equalized across Canada: Pre-COVID, there were geographical pockets in Canada where rates were high due to IT worker scarcity. Now that all of Canada has been opened as a potential candidate pool for remote work, rates in markets like Calgary, which were traditionally 10+% higher than other regions, have dropped to be in line with Toronto and Vancouver markets which were typically lower. A key point to mention is IT consultant rates have not eroded drastically with the advent of remote work. As an example, we do not have requirements for Senior Program Managers at $50/Hour. There remains a healthy up-take of resources in the market and base-line rates have remained quite stable.
Unemployment Rates: The unfortunate reality of the pandemic layered on top of an Alberta recession is that high unemployment rates will likely persist for some time. The good news is that IT unemployment tends to run several percentage points lower than the normal posted rate. In May, Edmonton had the highest unemployment rate in the country at 13.6%, while the unemployment rate in the IT subset of the labour force in the same time period in Edmonton was 7.6%. Things have been slowly improving, but all indicators point to the unemployment rate remaining high for the foreseeable future.
Skills Mismatch: While the unemployment rate is high, the market is tightening up in a few key areas. We are predicting labour market shortages in Edmonton for the following categories in the first and second quarter:
Data Analytics / Business Intelligence
Organizational Change Consulting
With the initial surprise and disruption of the pandemic behind us and some light at the end of the tunnel, we are optimistic for the year ahead. Our clients continue to focus on implementing and leveraging technologies that lower costs, improve efficiency and retain talent as some form of remote work is expected to persist for much of 2021. We are also seeing some organizations shift from a focus on systems and supports required to sustain operations (reactive) to tools and capabilities that allow their organizations to be more innovative and productive in this new world (proactive).
While we like to think that the worst is behind us, we know nothing is perfect. If we have learned nothing else over the past 11 months, it is that we need to be prepared to deal with the challenge and change as it comes. Every prediction and forecast that anyone makes these days comes with crossed fingers, a prayer and an asterisk. They are all based on vaccine availability, effective vaccines, herd immunity and the end of the pandemic. We are also putting a lot of faith in compliance with public health restrictions until we get there, which gets harder as the pandemic drags on. Needless to say, we need a lot of things to go right!
What does this mean for the Edmonton IT sector? The good news is that things are trending in the right direction. While the economic impact of the pandemic was significant, the IT sector is expected to be one of the sectors to recover relatively quickly. Our clients continue to seek talent for key projects and they continue to ask Eagle to provide them with that talent to move those initiatives forward.