Canada’s employment services industry recorded its first annual revenue decline in more than a decade, dropping 1.7% to $24.3 billion in 2024. The decrease marks a turning point for staffing and recruitment firms after years of steady growth.
The decline represents the only annual drop since comparable data became available in 2013, excluding the downturn following the start of the COVID-19 pandemic in 2020. The industry group includes employment placement agencies, executive search services, temporary help services and professional employer organizations.
A softening labour market drove the revenue decrease, according to Statistics Canada data released today. Job vacancies declined throughout 2024, reducing demand for staffing and recruitment services that depend on successful worker placements.
Profit margins narrow
Operating expenses fell 0.8% to $23.2 billion in 2024, declining more slowly than revenues. The gap caused profit margins to shrink to 4.3% from higher levels in previous years.
Labour costs dominated spending, with salaries, wages, commissions and benefits accounting for 53.7% of expenses. Subcontracts made up another 33.7%.
Ontario leads regional revenues
Ontario generated 54.4% of industry revenues in 2024, maintaining its position as the largest market. Quebec followed with 17.4%, Alberta with 14.0% and British Columbia with 10.5%. The provincial order remained unchanged from 2023.
Business clients represented 79.6% of total sales in 2024, up from 79.3% the previous year. The increase reversed a five-year downward trend in the business share. Public sector sales fell to 14.2% from 15.1% in 2023 after four consecutive annual increases.
Temporary staffing still dominates
Temporary staffing services made up 48.2% of total sales in 2024, though the share declined slightly from 2023. Permanent placements and contract staffing accounted for 42.7% of sales, while other services represented 9.1%.
Challenges ahead in 2025
The industry may face additional pressure in 2025, according to the data. Job vacancy rates continued falling through the first half of 2025, while population growth slowed and economic uncertainty persisted.
Slower GDP growth and cautious business investment could further reduce demand for employment services. However, ongoing skills mismatches and workforce shortages may help support the industry, particularly as baby boomers retire in large numbers.
Statistics Canada will release detailed 2025 financial data for the employment services industry in 2026 following survey collection.
