Tuesday, April 6, 2004

SPOTLIGHT: Permanent layoffs

Harder to find new job

Despite some high-profile corporate downsizing, most Canadian workers were no more likely to lose their job permanently in the 1990s than their counterparts were in the 1980s.

However, if a worker was laid off, his chances of finding a new job got tougher because companies were hiring far fewer workers in the 1990s.

Between 1985 and 1989, 25% of jobs existing in a given year were filled by new hirings, that is, by people who were not in the company the year before. Between 1995 and 1999, this rate fell to 21%.

Hiring rates fell much more among small businesses, those with fewer than 20 employees, than in larger ones, those with more than 500. In small firms, hiring rates fell more than five times as fast between the mid-1980s and the mid-1990s as they did in large firms.

Both men and women aged 25 to 34 saw their average hiring rates fall between these two periods. However, hiring rates for men aged 45 to 54 actually increased.

Lower in most provinces

In most provinces, hiring rates were substantially lower in the second half of the 1990s than in the second half of the 1980s.

For example, in Ontario they were about 21% in 1999, down from 25% in 1987. Rates in British Columbia fell from almost 27% to 20%.

This suggests that while chances of being permanently laid off did not rise substantially between the 1980s and 1990s, chances of finding a new job in the event of a layoff were considerably lower.

The study found that in 1989, 5.9% of Canadian employees permanently lost their job. In 1999, a year comparable in terms of labour market conditions, the corresponding proportion was virtually unchanged at 5.7%. Both men and women experienced little change in layoff rates between the two periods.

You can read the research paper "Have permanent layoff rates increased in Canada?" online.

For further information, contact René Morissette (613-951-3608), Business and Labour Market Analysis Division.

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© 2004, Statistics Canada.