Why Axis

COVID-19 reversed four months of job gains for developers and engineers. Economy-wide, it wiped out 14 years of growth

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The COVID-19 pandemic has led to record job losses across the Canadian economy, but employment in the innovation economy workforce has proven relatively resilient, according to The Logic’s analysis.

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According to Statistics Canada’s Labour Force Survey (LFS), Canada’s total employment—the number of people working in paid jobs or business—dropped to just over 16 million in April, a level it last fell below in February 2006. The pandemic has, in effect, wiped out 14 years of job gains economy-wide. 

Talking Point

Canada suffered record job losses in February and March due to the economic effects of the COVID-19 pandemic and physical-distancing measures to contain the outbreak. But The Logic’s analysis shows that after a growth run of more than a decade and a half, employment among innovation economy professionals has proved relatively resilient.

Over that same period, employment in professional occupations in natural and applied sciences has increased by more than half. The LFS found 975,500 people employed in the field in April, down from an all-time high of 1.008 million two months prior, before the pandemic’s economic effects hit Canada. But the losses are modest compared to those in other occupations, reversing just four months of job gains. 

Growth in the number of software developers, engineers, life-science professionals and similar fields has far outpaced most other occupations over the last decade and a half, the LFS shows. Economists and tech-sector advocates say those workers are better placed to ride out the virus-produced downturn in their current roles or find new ones.

Their top employers are in professional scientific and technical services, public administration and finance and insurance, which “have not been hit as hard as many areas of the economy,” according to Brendon Bernard, an economist with job-posting site Indeed Canada. Their basic tasks are also easier to accomplish amid physical-distancing measures than some other fields. “Most of these workers likely [have] a greater ability to work from home and aren’t dependent on face-to-face interaction,” he said.

Low-wage, temporary workers with low seniority and those paid hourly have been most likely to lose their jobs over the last two months, according to recent reports by economists Tammy Schirle, Kevin Milligan and Mikal Skuterud for the C.D. Howe Institute think tank. By contrast, innovation economy professionals tend to be at the top end of the labour market, holding university degrees and salaried, permanent positions, Skuterud, a University of Waterloo professor, told The Logic. “They may have been asked to go work from home for a little while, but they haven’t lost their jobs.”

The share of people employed in professional occupations in the natural and applied sciences—to which Skuterud and Bernard both point as a better measure of expansion than the absolute numbers—rose from 3.46 per cent in May 2000 to 5.33 per cent in February 2020, just behind administrative work among all major occupational groups. “The nature of the Canadian economy [is] changing,” said Skuterud. “We’re moving away from manufacturing to more high-tech stuff.” 

Bernard said the growth also reflects increased interest from new workers in these fields—Canadian university graduates click on Indeed postings for engineering and other tech roles at more than twice the rate of other job seekers. “It’s a sign of people leaving school realizing that these are pretty lucrative professions that will offer some opportunities that might no longer be available in other areas of the economy,” he said. Job seekers from outside Canada also show more interest in tough-to-fill specialized fields like data science than domestic peers; immigration accounts for the vast majority of the country’s labour force growth.   

Developers, engineers and chemists aren’t the only kinds of professionals that innovation economy firms employ, of course. Tech workers—those with primary skills like coding, design, data science or quality assurance testing—make up 53 per cent of talent demand for Canadian startups, according to a recent report from Prospect.

In March, the hiring platform helped set up a database of workers laid off due to the pandemic. “Marketing and communications professionals are the largest affected group,” said Prospect CEO Marianne Bulger; 30 per cent of those who enrolled in the Help List cited it as among their top three areas of functional expertise. Operations and sales and business development each accounted for about a fifth of the pool, while customer service and administrative staff made up just over a tenth each. 

Tech workers weren’t entirely spared—software engineering placed second, with 22 per cent of respondents listing it among their core skills. “If a company is having to lay off all of their employees, naturally that group of professionals is going to be heavily represented,” Bulger noted. 

Those roles are also most in demand, so out-of-work engineers and developers are likely to have an easier time finding new jobs than their colleagues in other fields. Postings have declined compared to last year across every sector, Bernard said. “But the strong demand that’s helped drive tech job growth over recent years [has] carried over in this current period to the extent that things haven’t fallen as much as [in other fields],” he said.

In British Columbia, professional occupations in the natural and applied sciences make up 5.3 per cent of total employment, up from 3.2 per cent two decades ago. About half of the companies in the local innovation economy are still adding staff, said Raghwa Gopal, CEO of Innovate BC, a provincial funding agency. He cited e-learning platform Thinkific, biotech firm AbCellera and fintech firms Bench Accounting and Beanworks.

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The total job-loss figures do not reflect population growth. Economy-wide, Canada has seen “an unbelievable drop” in employment over two months, said Skuterud. An “unprecedented increase” is likely to follow, although “it will not get us right back to where we were anytime soon.” But innovation economy professionals have much less ground to make up than most fields—four months versus 14 years. “We are going to need even more digitally skilled workers after this pandemic,” said Bulger.  

Methodology

The Logic analyzed seasonally unadjusted data on employment by occupation for the period May 2000 to April 2020, sourced from Statistics Canada’s Labour Force Survey. The analysis focuses on total employment gains and losses, and does not account for population growth.