Rethinking what it means to be “in demand” for 2026

The Canadian labour market has undergone quite a transformation in just a few short years. After a long stretch of tight competition for talent, employers are now navigating a different challenge: slowing growth, rising unemployment, and an evolving definition of what makes a job “hot.”

In 2026, the conversation around hot jobs and in-demand jobs in Canada will be less about filling seats quickly and more about building the right workforce. Establishing one that’s skilled, adaptable, and ready for the future is essential.

The current state of the labour market in Canada shows that economic signals are mixed. On one hand, inflation has cooled, offering some relief. GDP is on track for slow but positive growth in the third quarter, and unemployment has climbed to 7.1%. Youth unemployment now sits at 14.5%, and even core-age Canadians (25–54 years) feel the impact of unemployment at 6.1%. These figures reflect a cooling labour market that looks and feels very different from the post-pandemic hiring boom.

Even though inflation has moderated, the cost of living remains stubbornly high. Shelter and food prices continue to rise yearly, putting pressure on household budgets. These affordability concerns ripple into the workforce, influencing job choices, retention, and employee expectations.

At the same time, the Bank of Canada’s shift toward an easing cycle signals cautious optimism. As interest rates decline, organizations can take a breath, regroup, and plan more strategically for the next wave of workforce needs.

This more balanced environment offers a chance to approach hot jobs differently, with less urgency and more intention.

So, how can employers attract, reward, and retain talent in this new reality? It starts with redefining what “hot” really means.

What made a job “hot” in 2025?

In 2024, “hot jobs” were primarily defined by how in demand they were. That was still true to some extent in 2025, but with a new dimension: strategic importance.

In a slower economy, employers aren’t just competing for talent. They’re competing for the right talent. Roles that directly drive efficiency, innovation, and customer experience are leading the pack.

Review of the data found in the Canada Mercer Benchmark Database and Total Remuneration Survey for 2024 and 2025 highlights several jobs that have been hot and have an above average increase in base salary, including:

• Claims handling (insurance) - 6.2%
• Metal part machining operations - 5.8%
• Environmental science (construction, energy, and mining) - 5.6%
• Civil/construction/structural engineering - 5.4%
• Electrical engineering - 5.3%

These in-demand jobs in Canada reflect a mix of old and new priorities. Employers still need dependable front-line workers but also digital fluency, problem-solving, and data-savvy thinking across every business level.

Interestingly, wage movement among the same incumbents has slowed dramatically. Mercer’s data shows a 48% decrease in the number of jobs receiving more than a 5% year-over-year pay increase. That’s a clear signal that pay alone no longer defines a “hot job.” Instead, employers are focusing on how roles contribute to business resilience and how skills translate across functions.

In other words, hot jobs in 2025 are the ones that keep the business running and moving forward, even in uncertain times.

What makes a job “hot” today?

Mercer’s 2025 Canada Compensation Planning Survey shows that total salary increase budgets are holding steady at about 3%–3.5%, with the highest increases in the high-tech and insurance sectors. However, fewer organizations are projecting budgets above 4%, and many have already approved modest increases focused on pay structure alignment rather than aggressive raises.

Instead of chasing top-dollar talent, many organizations are prioritizing:

• Skill and talent development (29% of employers say this is their top priority)
• Market competitiveness (26%)
• Compensation changes (24%)

Meanwhile, hiring and promotions have been deprioritized. That tells us that Canadian employers are taking a long-term view, one that’s focused on sustainability.

It also means that employers must focus clearly on attracting and keeping talent when it comes to in-demand jobs.

Skill-based hiring is on the rise

Another major shift in how organizations approach in-demand jobs in Canada is the move toward skills-based hiring. Employers evaluate candidates based on demonstrated capabilities rather than solely on degrees or years of experience. This includes things like problem-solving, communication, adaptability, and digital literacy.

This approach expands the talent pool when many industries struggle to fill key roles. It also helps create more equitable hiring practices by reducing bias and giving non-traditional candidates a fair shot. It’s a way for organizations to align hiring decisions with the fundamental skills that drive performance and innovation.

By combining skills-based hiring with data insights from surveys and AI tools, employers can identify the competencies that predict success in hot jobs and build stronger teams.

The new forces shaping Canada’s hot jobs

The labour market of 2025 isn’t being shaped by just economics. It’s being reshaped by technology, legislation, and shifting employee values. Below are three things you need to know.

AI and automation are rewriting job definitions Nearly all NYSE-listed CEOs (96%) view AI as an opportunity, yet only 7% of rewards leaders report that it’s significantly changed how they work. That gap represents untapped potential. HR and rewards teams are leveraging AI to streamline job descriptions, automate job matching, and improve grading accuracy. These tools save time and help identify skill gaps and future-ready roles, a key advantage when filling hot jobs quickly and accurately. As AI adoption matures, expect a new wave of in-demand jobs to emerge, ranging from data analysts and prompt engineers to HR technologists and AI ethics specialists.

AI and automation are rewriting job definitions

Nearly all NYSE-listed CEOs (96%) view AI as an opportunity, yet only 7% of rewards leaders report that it’s significantly changed how they work. That gap represents untapped potential.

HR and rewards teams are leveraging AI to streamline job descriptions, automate job matching, and improve grading accuracy. These tools save time and help identify skill gaps and future-ready roles, a key advantage when filling hot jobs quickly and accurately.

As AI adoption matures, expect a new wave of in-demand jobs to emerge, ranging from data analysts and prompt engineers to HR technologists and AI ethics specialists.

Pay transparency is here to stay

The Ontario Pay Transparency Act has accelerated a nationwide shift toward open pay communication. About 59% of organizations are compliance-driven, while 37% take a strategic approach by sharing ranges internally and externally.

For employers, pay transparency is no longer optional but a competitive advantage. Candidates increasingly expect to see pay information up front, and organizations that embrace openness early are more likely to attract and retain employees.

Employee expectations are evolving

Flexibility, career growth, and financial well-being continue to top employee wish lists. Despite market changes, burnout and health concerns remain prevalent, and affordability pressures prompt workers to seek employers who “get it.”

In short, candidates want employers who balance competitive pay with real-life understanding.

Five future-ready strategies for attracting and keeping talent

If the past few years have taught us anything, recruiting for hot jobs in Canada requires adaptability and creativity. Below are five ways employees can approach in-demand jobs more effectively in 2025 and beyond.

1. Build from within

Your existing workforce is your most significant opportunity. Internal mobility is becoming a defining feature of successful organizations, with nearly one-third of employers ranking skill and talent development as their top priority.

Rather than competing in a crowded labour market, focus on upskilling and reskilling current employees. Mentorships, internal apprenticeships, and rotational programs can help you develop the capabilities you need for tomorrow’s hot jobs while boosting retention and engagement today.

When roles are filled internally, institutional knowledge and culture are preserved, which cannot be replicated through external hiring alone.

2. Use AI to unlock talent insights

AI can be more than a buzzword. It can be your next recruiting partner. Emerging HR technologies can scan internal databases to identify hidden talent, predict attrition risks, and recommend learning paths for employees ready to advance.

For example, Mercer’s new AI-powered tools can automatically generate job descriptions, match roles to the Mercer Job Library, and grade positions based on proprietary models. These advancements save hours of administrative time and allow HR to focus on strategic talent conversations.

By using AI thoughtfully, organizations can make faster, fairer hiring decisions and stay ahead in the competition for in-demand jobs.

3. Refresh your employee value proposition (EVP)

Your EVP is more than a checklist of benefits. It’s your story. And in today’s labour market, that story needs to reflect what people care about most: financial stability, flexibility, well-being, and growth.

Mercer’s research shows that Canadian employees continue to worry about covering monthly expenses, saving for retirement, and managing personal debt. Burnout and workload balance are also ongoing concerns.

By updating your EVP to address those realities and communicate them clearly, you demonstrate that your organization is listening and that you care about the team you’re building.

One simple yet often overlooked step is to tailor your communication methods. Office employees might engage via email or intranet updates, while front-line teams may prefer in-person briefings or mobile alerts. Make sure your message actually reaches the people it’s meant to serve.

4. Be transparent and mean it

Pay transparency is one of the defining shifts in how hot jobs are approached across Canada. Treat it as an opportunity, not a compliance exercise.

Start by ensuring that pay ranges are clearly communicated, equitable, and based on reliable market data. Then go a step further. Educate managers on how to discuss compensation confidently and fairly. Transparency builds trust, and trust keeps talent.

The companies leading the transparency movement aren’t just following laws; they’re setting the tone for a more open, credible workplace culture where people feel welcome.

5. Reward the future, not just the past

Finally, rethink how you define “reward.” Instead of only rewarding tenure or static performance metrics, align incentives with the future skills and behaviours your organization needs most, such as innovation, collaboration, and adaptability.

Consider flexible incentive programs that recognize both individual and team achievements. Offer short-term bonuses tied to skill acquisition or project milestones. Engagement follows naturally when employees see a clear link between learning and earning.

This forward-focused mindset attracts candidates for hot jobs and prepares your workforce for what’s next.

Are you future-ready?

To stay competitive in Canada’s evolving labour market, employers should ask themselves:

• Do we have precise data on which in-demand jobs are most critical to our business goals?
• Have we mapped the skills our current workforce already has, and where the gaps are?
• Is our pay strategy transparent and equitable across regions and roles?
• Are our managers trained to talk about compensation and career growth with confidence?
• Do our technology investments make hiring and rewarding people easier?

The employers that can answer “yes” to most of those questions will be best positioned to compete for not only today's hot jobs but also those in demand tomorrow.

Looking ahead: a smarter, steadier path forward

The labour market may be cooling, but Canada’s need for skilled, motivated workers remains red-hot. The difference is in how employers approach those needs.

Gone are the days of reactive hiring and inflated wage wars. The organizations that will win in 2025 are those that plan intentionally, invest in their people, and use data (not guesswork) to drive decisions.

The definition of jobs in demand in Canada will continue evolving as technology, transparency, and employee expectations reshape work. But one thing won’t change: employers who stay curious, agile, and human-focused will always come out ahead.

Mercer’s latest surveys, insights, and data tools, from workforce analytics to compensation benchmarking, can help your organization stay competitive.

If you’re ready to approach hot jobs differently this year, Mercer’s experts are here to help you understand your data, design your strategy, and plan for what’s next.

What jobs are you struggling to fill or keep filled in your organization? It could be an issue of pay but it could be a variety of other things. Let us help you determine your next move. Contact us at 855-286-5302 or surveys@mercer.com and we’ll match you with a consultant with expertise in your industry.

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