Project INSIGHTS Report

Did the pandemic and current labour shortages change the quality of jobs?

Quality of Work

The Issue

The post-pandemic labour market has been characterized by tightness, with widespread labour shortages across sectors and industries. 

In response to these shortages, employers could both raise compensation and offer better non-wage benefits to attract applicants to open positions. Benefits attached to jobs can come in a variety of forms. Some are traditional, financial benefits such as health insurance and retirement plans. Other benefits can relate to flexible- and remote-work arrangements, training, and the ability to acquire skills on the job. 

During labour shortages, employers might also be expected to become less selective and lower the requirements for employment in order to attract new workers more readily.

What We’re Investigating

This project explored how the increasingly tight labour market affected the terms of employment offered to job seekers focusing specifically on skill, education, and experience requirements as well as job benefits. The project sought to understand changes in the proportion of job ads featuring different types of skills, education, experience and benefits from 2017 to 2022. The project also sought to identify what types of occupations and industries were most affected by these trends.

The project used approximately 6.5 million online English-language job postings from Canada spanning from January 2017 to December 2022. The data-set includes around 2.5 million observations from pre-pandemic periods and approximately 4 million observations from periods during and after the lockdowns. The online job postings were collected and compiled by Lightcast (formerly known as Burning Glass Technologies), an employment analytics and labour-market information firm. Lightcast collected online job postings from online job boards and company websites, aggregated and parsed the postings, removed duplicates and, lastly, compiled the data for analysis. 

The project also used data from the Labour Force Survey (LFS) to rank occupations and industries by their average wages and study to what extent the Covid-19 pandemic differentially altered the job skill requirements and job benefits across the wage distribution.

What We’re Learning

No increase in wages, but wages more likely to be posted

From 2017 to 2022, the proportion of jobs with explicit wage offers increased, from 28% in 2017/2019, 37% in 2020, 41% in 2021, and 43% in 2022. However, while more job postings listed information related to wages, average wages offered did not rise, even in 2022 when labour markets were generally tightest.

Increasing proportion of job ads include skill requirements, especially soft skills

From 2017 to 2022, job postings were increasingly likely to post skill requirements. The more pronounced increases from 2017 to 2022 were for soft skills and technical support, with soft skills including things like communication, teamwork, collaboration, negotiation, time management, and being detail-oriented. The share of jobs requiring cognitive skills increased by 1.1 percentage points from 31.9% to 33% of postings. At the same time, the number of job postings with a social skill requirement increased by 4 percentage points, character skills by 4.2 percentage points, and the share requiring creativity by 0.7 percentage points—a sizable increase from a small base of 6.7 percent in 2017/2019. In addition to skills requirements, employers were more likely to include skill-building benefits as part of job postings, including things like education assistance, on-the-job training and professional development opportunities. 20.5% of jobs offered such productivity-enhancing opportunities in 2017-2019. By 2022, the share of job postings advertising such opportunities rose to 28.3%. 

More job postings include education and experience requirements, but requirements are generally less demanding 

The share of jobs listing an education requirement increased from 2021 to 2022 from 31.6 to 36%, however the educational requirements became less demanding over this time period. In 2022, the fraction of job postings that required higher levels of education declined markedly. For instance, the share requiring a bachelor degree or more fluctuated between 60.2 and 62.5% until 2021 and then declined by 12 percentage points in 2022. At the same time, the fraction of jobs requiring at least a high school degree increased by approximately 13 percentage points in 2022. Compared to the pre-pandemic period, the fraction of jobs requiring any education increased; however, the increase has been slightly greater at the bottom percentiles of the earnings distribution, so increases in the demand for education are largely driven by the rises in demand for lower-than-bachelor’s degrees.

On average, 39% of jobs listed any experience requirement during the three years prior to the pandemic (2017-2019). This share stayed roughly stable during the first two years of the pandemic, but in 2022 the share of postings with an experience requirement rose to 46.1%. The fraction of jobs requiring experience rose around 8.5 percentage points at the bottom of the wage distribution, indicating an approximate 35% increase, while it increased about 5 percentage points at the top, corresponding to roughly a 10% increase. While the likelihood of listing experience requirements increased, the actual length of experience required decreased. These findings are difficult to interpret: the increase in the share of jobs listing experience or education requirements suggests that employers became more demanding but average education or experience requirements became less demanding. 

Increasing proportion of job postings include non-wage benefits

Between 2017 and 2022, an increasing number of jobs advertised non-wage benefits. Compared to before the pandemic, employers have become twice as likely to promote job flexibility as an attribute of employment when posting jobs. The share of job postings requiring working from home rose from less than 1% to ~5.4% by 2021 and has stabilized in the data since. The fraction of jobs providing flexible working hours and work-life balance almost doubled. There was a similar rise in the fraction of jobs offering paid time off, sick leave, and maternity/paternity leave. The fraction of jobs offering at least one type of medical insurance coverage (health, dental and/or vision) rose from 9.8% in 2017-2019 to 14.6% in 2020, 18.1% in 2021, and 24.3% in 2022. Likewise, the proportion of jobs offering life and/or disability insurance more than doubled during the study period.

Employers also offered a range of non-wage benefits such as retirement benefits and contributions, stock options, equity, bonuses and profit sharing, as well as employee discounts, gym/fitness center access, post-secondary scholarships, relocation assistance, commuter benefits and free lunches. The fraction of job postings offering any of these benefits increased substantially. Specifically, the proportion of jobs offering retirement benefits increased from 6.8% in 2017-2019 to 15.7% in 2022. The fraction of jobs offering ownership & rewards benefits increased from 12% to 19.1%. The share of jobs offering other fringe benefits more than doubled to 28.3% in 2022. The proportion of jobs listing equity, diversity and inclusion initiatives increased from 36.4% in 2017-2019 to 50.8% by 2022.

Differential impacts along the wage distribution 

Demand has increased more for less well-paid jobs, and for these, compensation-linked benefits have become more common. However, these jobs are also becoming more likely to list education and experience requirements as well as some skill requirements. Benefits associated with job flexibility and time off—benefits that might be associated with work-life balance—are becoming more common in highly compensated jobs.