Canadian employers are bracing for higher employee turnover in 2026, with the average cost of replacing a worker climbing to $30,680, according to a new survey from Express Employment Professionals and Harris Poll.
Nearly one in three hiring managers (28 per cent) expect turnover to increase this year, up from last year’s figures. The rising replacement costs signal mounting pressures on companies navigating a competitive labour market.
Larger organizations are expressing the most concern. Thirty-seven per cent of companies with 100 or more employees expect turnover to rise, compared with 22 per cent of small businesses with 10 or fewer employees.
Workplace demands and competition drive turnover expectations
Among employers anticipating higher turnover in 2026, 29 per cent point to increased workplace demands leading to more vacancies. An equal proportion cite a competitive job market, up from 23 per cent last year.
Twenty-six per cent attribute expected turnover to employees retiring, while 24 per cent anticipate departures due to better pay and benefits offered elsewhere.
Wage increases expected, but views diverge
Most hiring managers (67 per cent) report that wages are poised to increase in 2026, while 27 per cent expect no change.
Job seekers hold a more reserved view. Only 39 per cent expect wages to increase, while 51 per cent expect them to stay the same this year.
Mercer’s Canada Compensation Planning Survey found that while total wage growth has remained relatively flat, the average total projected salary increase in 2026 is estimated around three per cent.
“These findings reinforce something leaders have known intuitively for years — strong company culture isn’t just good for people. It’s good for business,” said Bob Funk Jr., CEO of Express Employment International. “When employees feel supported and connected to a healthy work environment, turnover naturally declines.”
Survey details
The Job Insights survey was conducted online within Canada by Harris Poll on behalf of Express Employment Professionals from Nov. 3 to 19, 2025, among 504 Canadian hiring decision-makers.
The Job Seeker Report was conducted online within Canada by Harris Poll on behalf of Express Employment Professionals from Nov. 7 to 21, 2025, among 502 adults ages 18 and older.
