By Linda Chammartin, VP, Professional & Management Recruitment

When we sat down with the People First HR recruitment team to talk about what trends employers will face in 2026, one theme stood out: the majority are experiencing similar recruitment and retention hurdles when recruiting new team members for their organizations. Regardless of the industry, job level, or location, organizations are telling us much of the same story when it comes to finding the right people.  

Candidates are negotiating more than ever, and many ultimately decide to stay with their current organization, often for reasons that go well beyond salary. Just as prominent in our conversations was how quickly recruitment trends are shifting, reshaping how organizations approach hiring as we move into 2026. With clients asking what’s happening in the market, why hiring feels harder, and how to plan for the year ahead, we’re focusing on the four most significant recruitment trends we’re seeing based on national data and the everyday experience of the organizations we support. Our goal is to offer clarity and confidence as you map out your people strategy for 2026.

1. The skills shortage remains the top barrier for Canadian employers

Source: 2025 ManpowerGroup Talent Shortage Survey (Canada)

The skills shortage is expected to continue well into 2026. With 77% of Canadian employers reporting difficulty finding the talent they need, and 46% cite a lack of qualified candidates as their biggest barrier, both hard and soft skill gaps are creating obstacles for organizations.

As we head into 2026, organizations can no longer rely on traditional recruitment methods to secure talent with the capabilities they need. HR teams should consider adopting skills-based job descriptions, incorporating upskilling and reskilling programs, expanding their recruitment pools in creative ways, and enhancing their hiring process with skills assessments structured interviewing.

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2. Small and mid-sized employers will continue to feel the greatest pressure

Source: Canadian Federation of Independent Business (CFIB), 2025

Top challenges heading into 2026:

• 53% say labour shortages limit growth

• 44% say insufficient skilled workers restrict production

• 69% note a lack of qualified applicants

• 57% say salary expectations exceed what they can offer

So how can small and mid-sized employers offset these challenges? By leaning into their strengths and focusing on what they can control. This may include speeding up the hiring process, offering flexible schedules or hybrid work where possible, cultivating a positive and growth minded culture, strengthening community connection through employee-led initiatives supported by leadership, and ensuring a personalized candidate experience to support retention.

Many of our clients are finding success when they highlight their collaborative culture, stability, and career growth opportunities. They’re putting more emphasis on communicating what a long-term career within their organization looks like and how candidates will benefit by joining them.

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3. Skills-first hiring will become the standard

Skills-first hiring continues to accelerate and is becoming essential for many organizations. We’re seeing employers prioritize technical and digital capability, transferable skills, and real-world experience. Hiring agile and skilled learners increases alignment between work and individual strengths and ultimately supports retention.  

When employees are given opportunities to apply their range of skills, not only in their daily roles but also through ‘stretch’ projects, they tend to thrive. We encourage clients to look for skills that support both the role and the broader goals of the organization to drive growth and engagement.

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4. Flexibility, AI, and candidate experience will shape hiring

Flexibility remains a top factor in job seekers’ decisions, even in roles where remote work isn’t an option. The vast majority of candidates we connect with continue to note this as a key motivator in their career decision-making.

AI will continue expanding into screening, interview scheduling, and candidate selection, requiring HR teams to balance efficiency with fairness and transparency. Candidate expectations are rising, and organizations that streamline their hiring processes while maintaining a human-centered approach will be better positioned to attract top talent.

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Recruitment priorities for HR leaders

• Map out future skills needs with a 1-3-year workforce plan, shifting from role-based to skill-based planning

• Build local talent pipelines through partnerships with educational institutions, Indigenous organizations, newcomer services, and youth programs

• Modernize job descriptions by shifting from credential-focused to skills-focused criteria to widen your talent pool

• Prioritize and commit to a strategic, consistent recruitment process to strengthen hiring outcomes and long-term retention

Recruitment heading into 2026 will come with challenges, but with the right strategies, it also presents opportunity. Employers that embrace innovation, build strong local partnerships, and modernize their hiring practices will be best positioned to thrive in a tightening labour market. Those who stay flexible, proactive, data-informed, and people-focused will lead the way.  

We’re here to support your recruitment needs. Learn more or connect with us here.

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