Employment services, 2020

Released: 2021-10-14

The employment services industry in Canada was negatively affected by the COVID-19 pandemic. The operating revenue for the employment services industry group fell 7.5% to $15.8 billion in 2020. To curb the spread of the virus, several public health measures were implemented, such as mandating non-essential businesses to close. This had an impact on labour markets. Employers slowed hiring and furloughed staff, while employees were hesitant to change careers or fields. When public health restrictions loosened in late spring 2020, the labour market started to recover.

The employment services industry includes employment placement agencies and executive search services, temporary help services, and professional employer organizations. Operating expenses declined at a rate of 9.0%, bringing their 2020 total to $14.8 billion. Salaries, wages and benefits, which continue to be the main operating expense (58.3%), fell 9.7% to $8.6 billion. Respondents reported that the second-biggest effect of the pandemic, aside from working from home, was the reduction in labour costs in the industry. Because of the reduction in labour costs, the operating profit margin for the employment services industry was 6.5% in 2020.

Temporary staffing services generated 46.0% of the revenue from sales of goods and services in 2020, down from 47.3% in 2019. This subsector of employment services took the biggest hit during the pandemic, as a rapid loss of jobs was seen in less secure positions; this mainly includes temporary and non-unionized positions. Permanent placements and contract staffing generated 46.3% of sales, while other sales of goods and services contributed the remaining 7.7% of total sales.

Sales to businesses (86.4%) continued to be the primary source of revenue, but their share of sales declined from 87.7% a year earlier, as businesses were forced to shut down. The remaining sales were split between sales to the public sector (9.5%), sales outside Canada (2.2%) and sales to individuals (1.8%).

E-commerce sales were not customary among staffing agencies in Canada, as they represented 2.1% of sales in the industry in 2020, up from 1.9% in 2019. This increase corresponds with a rise in investment in e-commerce platforms, as reported by 7% of respondents.

Looking to 2021 

Labour market conditions are changing; the job vacancy rate has been rising across the country in many sectors, fuelling the strongest wage growth in two decades and competition among employers. The unemployment rate in September 2021 was at 6.9%, its lowest level since the pandemic began. Imbalances in labour markets will help support demand for employment services to alleviate those pressures and fill those specialized and vacant jobs.

Contact information

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