CANADA, June 2023 - A recent wave of layoffs has caused Canada’s unemployment rate to rise for the first time in nine months. In order to understand the key layoff trends of the past year, Capterra surveyed over 1,000 Canadian employees of SMEs on the reasons for layoffs, offboarding strategies, and upskilling tactics.
Almost one third (31%) of Canadian SME employees have witnessed layoffs in their companies within the past 12 months. 41% of these respondents note that the rate of layoffs within the last 12 months has been higher compared to the previous 12 months. Of those respondents who have noticed a higher rate of layoffs in the past year, over half (51%) report that their company has increased layoffs by 10-20%.
On a regional level, Quebec has seen the highest number of reported layoffs, with 36% of employees working in Quebec witnessing layoffs, followed by:
- British Columbia (32%)
- Ontario (30%)
- Atlantic Canada (27%)
- The Prairies (24%)
Cost-cutting is the main driver for layoffs
Almost half (46%) of employees who have witnessed layoffs report that they have been due to cost-cutting. This is followed by 35% of respondents who attribute layoffs to a decrease in operations, and 21% who say they are due to a decrease in company funds. Outsourcing and mergers were also reasons cited for layoffs. However, 37% of employees report that layoffs in their companies - and the reasons behind them - are not typically communicated to the wider staff.
Of the respondents who say that their employers tend to be transparent about layoffs - constituting 45% of survey-takers - most (55%) are informed directly in personal reports by managers, followed by mass emails (23%) and, least commonly, through company-wide announcements (16%).
Are companies providing support to laid-off employees?
Nearly one third (30%) of employees in Canada report that their company does not provide any support to laid off employees, and another 33% are unsure if their company provides support, demonstrating a need for greater communication between employers and their staff.
However, of the 37% of survey-takers who report that their company does provide support to laid-off employees, the top ways in which they offer support include:
- A reference letter (62%)
- Help finding a new job (41%)
- A redundancy package (37%)
- Subscriptions for professional development courses (11%)
Prior to employees officially leaving a company, some employers deploy an offboarding strategy that may include preparing paperwork and arrangements for the transfer of knowledge from the departing employee. In Canada, just over one quarter (26%) of employees report that their company has an offboarding strategy, 65% of whom say that this includes an exit interview. However, 45% of employees report that their company has no strategy to handle employee departures.
Ensuring that knowledge is appropriately transferred between departing and remaining employees is a vital step in ensuring a smooth transition during times of layoffs. It is not just during the offboarding process and employee departures that knowledge should be transferred. Additionally, ensure that responsibilities, tasks, and procedures are appropriately documented and centralized within teams throughout an employee’s tenure. This should facilitate handovers and ensure that no vital information is missing during knowledge transfers,
reports Tessa Anaya, analyst for this study.
In order to encourage the retention of employees and close talent gaps, employers are investing in upskilling. 41% of employees report to have been upskilling in the past six months, 44% of whom are using online courses. The reasons for upskilling include:
- Being better prepared for their job (reported by 44% of employees)
- To work on specific projects (23%)
- To be better prepared when looking for new jobs (19%)
- Because their company has asked them to (9%)
Surprisingly, and in spite of the rise in the number of layoffs across the country, just 2% of respondents report to have upskilled out of a fear of being laid off by their company.
About Capterra
Capterra helps organizations around the world find the right software for their needs. Founded in 1999, Capterra's global product footprint, verified user reviews backbone, independent research, and tailored comparison tools, provide more than five million in-market buyers with a confidence-building discovery experience. For more information, visit www.capterra.ca.
Methodology
To collect the data for this study, Caperra conducted a survey from May to June 2023. To do this, a sample of 1,002 people were selected. The sample of participants is representative of the population of Canada regarding aspects of gender, and the criteria for selecting participants are as follows:
- Between 18 and 65 years old
- Employed part- of full-time in a junior, intermediate, manager or executive position
- Work in a small to midsize enterprise (SME) with anywhere between 2-250 employees
- Have been working in the same company for at least one year
Media Contact
Eleanor Pitcher, eleanor.pitcher@gartner.com