Job seekers in Toronto worried about rising layoffs aren't going to get much of a break early next year.
A new report by Manpower Canada predicts a "conservative hiring climate for the upcoming quarter" in the finance, insurance and real estate sectors. The staffing firm's survey of more than 1,800 Canadian employers found 16 percent expect to increase hiring, 9 percent plan to cut staff and 72 percent plan no change in staffing. Three percent of respondents weren't sure of their plans.
While Canadian banks aren't laying off large numbers of staff like their counterparts in the U.S., Susan Christoffersen, an assistant professor of finance at McGill University in Montreal notes banks are still being hurt by the overall slowing economy in the U.S., the purchaser of 60 percent of Canada's exports.
"In general, we are probably see more layoffs in the new year," she says. "Come January we are going to see what's going to happen to the real economy. I certainly think bonuses are going to be affected."
Trimming Staff, Cutting Costs
Canadian Imperial Bank of Commerce, BMO Capital Markets, CIBC World Markets and the Ontario Teachers Pension Plan has each reportedly been trimming staff. Others are likely to follow as business slows.
Still, recruiters expect the banks to hold their own amidst the economic turmoil. "The Big Four Canadian Banks - CIBC, RBC, TD Canada Trust and Scotiabank - are still on solid financial ground," sys Barrie Carlyle of David Aplin Recruiting in Toronto. "Profits are down slightly year over year, but are still healthy."
Hiring has slowed in Toronto's financial district, and there have been some layoffs in the "ancillary financial services sector in areas such as trading, commodities and investment houses," according to Carlyle. "We have seen an influx of unsolicited phone calls from candidates in the business community, particularly senior-level professionals with management responsibilities, inquiring about new work opportunities," he says. "This includes folks who are still currently working, which would indicate they have concerns over future employment in their present companies."
The reason for their unease is understandable. Layoff rumors are rampant and bonus payments are expected to plunge between 25 percent and 30 percent this year, according to the Globe & Mail. "Chatter on trading desks has RBC Dominion Securities at the healthier end of the scale, TD Securities in the middle of the pack, and BMO Nesbitt Burns and CIBC World Markets experiencing a little more shrinkage," the newspaper reports.
Another McGill professor, Jennifer Hunt, argues Canada is lucky that its economy isn't worse. "Canada might be having a regular recession but other countries might be having a depression," she says. "That's the positive spin on it....They are not in the (same) catastrophic situation as the U.S. I am guessing Canada will have a recession. I don't see Canada avoiding a recession."
That means banks are going to keep a watchful eye on their costs - including hiring.
"Job one for them is repairing balance sheets," says Finn Poschmann, director of research at the Toronto-based think tank the C.D. Howe Institute. "What that means is paring back a little bit on lending and being cautious about taking on new ventures. There is a short term negative on the employment."
Even if the economy does rebound next year, Poschmann expects the financial services sector would lag the recovery.