Less than half of companies in Canada plan to increase headcount in the first half of 2026, a recent poll reveals, amid an overall sentiment of “cautious optimism.”
That’s down from 2025, when more than half of Canadian firms had hiring plans during the first half of the year, according to data from an Express Employment Professionals-Harris Poll survey.
About 10% of companies intend to trim headcount.
Two-thirds of companies are “using positive terms to describe their hiring outlook” for 2026, according to the survey, although this metric is also down year-over-year.
Some companies are financially squeezed, the data suggests, with cost-cutting being by far the biggest factor influencing downsizing.
Another factor is artificial intelligence. Automation technologies are contributing to staff reductions, with a quarter of downsizing firms saying that AI is permanently replacing some of their human workforces.
Among those hiring, companies are increasingly leaning toward hiring temporary and contract workers.
But they can only be so picky, with nearly one-third of firms reporting trouble filling open positions with sufficiently experienced and skilled workers.
Indeed, finding qualified candidates was named the top challenge by hiring managers.
Hence why the Express Employment Professionals-Harris Poll survey suggests that “skill gaps, not incentives, are the critical hurdle to hiring.”
“As we move into 2026, companies that thrive will be those that invest in people and adaptability,” offers Bob Funk Jr., chief executive officer of staffing agency Express Employment.
“Technology will continue to transform how we work, but human expertise and creativity remain irreplaceable,” Funk Jr. believes.
“Closing skill gaps isn’t just a hiring challenge,” he says. “It’s a strategic opportunity for long-term growth.”
