Top Canadian Talent Trends for 2025

Understanding talent trends is essential for organizations that are navigating the complexities of the modern workplace. According to the ADP Canada 2024 Workforce Trends Survey of 178 ADP Workforce Now Comprehensive Services clients, there are three primary categories shaping the Canadian workforce in 2025: engagement, learning and compensation. Each of these areas plays an important role in overall organizational success and employee satisfaction.

Engagement

Employee engagement is no longer just an HR buzzword. It’s become a critical component of operational strategy, with 88% of HR leaders indicating that enhancing employee engagement would be a top priority for their organizations in the coming years. This focus demonstrates the understanding that engaged employees are more productive and more inclined to remain with the company, which is essential in today’s competitive job market.

Why is engagement important?

Employee engagement is an integral driver of organizational growth. Engaged employees exhibit higher productivity levels, increased retention rates and greater overall satisfaction. They develop a strong connection to their roles, which enhances motivation and a commitment to the company’s success, leading to higher profitability and a positive workplace culture.

Key areas for engagement

The survey identified three primary areas that organizations should focus on to enhance employee engagement:

1. Employee recognition programs: Recognition initiatives are fundamental in acknowledging employees’ contributions. Employee recognition tools can help create a culture of appreciation that encourages teamwork and collaboration. Recognizing achievements—whether significant milestones or daily accomplishments—reinforces positive behaviour and motivates employees to excel.
2. Learning and development opportunities: It’s essential to provide employees with pathways for growth through training and development activities. Upskilling and succession planning empower employees to enhance their skills and create a sense of belonging and purpose. Organizations that invest in their workforce through continuous learning can improve engagement and prepare their teams for future challenges.
3. Employee feedback tools: Employee feedback is important for understanding the sentiments and needs of the workforce. Tools designed for collecting employee feedback, such as ADP’s Voice of the Employee (VOE), allow organizations to gauge employee satisfaction and address areas of concern effectively. A good survey will have high participation and engagement, which will provide valuable insights from the employee's perspective on what is important and what is lacking. This allows organizations to focus their efforts on closing gaps and improving the culture.

According to Denise Mahoney, HR Executive Consultant at ADP Canada, a good starting point for implementing meaningful programs involves understanding your employees, ensuring program alignment with business objectives, and regularly assessing their effectiveness. These guidelines help with the creation of impactful initiatives that foster a supportive workplace culture.

Best practices for driving engagement

Organizations can adopt the following best practices to translate engagement strategies into tangible outcomes:

• Consistently celebrating achievements: Celebrating employee accomplishments regularly creates a positive atmosphere and strengthens team dynamics. Developing a recognition culture where achievements are acknowledged frequently enhances employee motivation and reinforces desired behaviours.
• Integrating recognition into daily operations: When recognition becomes a habitual practice, it amplifies its impact. Encouraging managers and peers to recognize each other’s contributions frequently helps cultivate a sense of community and belonging.
• Creating clear career pathways: Employees are increasingly looking for career development opportunities. Organizations should provide customized training programs that align with individual career goals so employees can visualize their growth potential within the company.

Learning

Learning and skill development becomes essential as organizations evolve. 82% of CHRO respondents are focusing on addressing skills gaps within their workforce ¹.

What is a skills-based organization?

A skills-based organization focuses on using employee skills over traditional job titles to enhance flexibility and responsiveness in the workplace. It moves away from reliance on conventional job titles and prioritizes the identification, development and deployment of skills.

What does a journey towards skills-based look like?

1. Talent in fixed roles: This refers to traditional employees who are permanently assigned to specific job positions within an organization.
2. Talent in flexible roles: These are employees who have defined responsibilities but can adapt and change roles as needed to meet organizational demands.
3. Fluid talent: This concept involves employees taking on short-term projects based on their skill sets. It enables a more agile response to changing workplace needs.
4. Workflows to talent: This approach prioritizes a collaborative structure that assigns tasks according to an individual's skills rather than sticking to a rigid hierarchy.

According to Zubia Leghari, Learning & Development Consultant at ADP Canada, companies will shift towards being more skill-based in the future, though many currently operate between the first two phases, maintaining formal roles while allowing flexibility in skill deployment for specific challenges. However, as organizations strive to meet future workforce demands, a trend towards more fluid talent usage is expected, where companies will move away from permanent roles to a model where work aligns directly with skills.

Key benefits of a skills-based approach:

• Greater agility: Organizations can quickly adapt to changing market demands through dynamic skill-building and a responsive workforce.
• Fewer silos: The lack of rigid hierarchies promotes cross-functional communication and prevents essential knowledge from being confined within specific teams.
• Higher productivity: Organizations can maximize their workforce's potential across various projects by reallocating talent based on skills rather than job constraints.
• Better Succession Planning: Keeping skills visible is essential for effective succession planning. It enables an on-going refinement of talent pools and pipelines for future success.

Compensation

Organizations are increasingly re-evaluating their compensation strategies. Currently, 50% of organizations plan to update their salary budgets for 2025, yet less than 20% recognize compensation as a top priority² . As salary budget increases in Canada begin to return to pre-pandemic levels, companies are preparing for a potential easing of inflationary pressures. This reflects a belief that employees will have greater purchasing power.

The move away from prioritizing compensation highlights a broader perspective on the employee value proposition. Organizations recognize that what employees value goes beyond just salary; it encompasses various factors, including non-monetary rewards such as training, development and community involvement.

Key considerations for managing compensation

According to Michelle Laville, Compensation Consultant at ADP Canada, the following factors should be considered when managing compensation in the evolving landscape:

1. Reviewing compensation philosophy: By aligning your philosophy with the overall business goals, organizations can adapt to current market realities and promote transparency with employees.
2. Defining pay decision processes: Establishing clear processes for salary increases and rewards can help ensure transparency and equity and foster trust among employees.
3. Conducting a review of current employees: Organizations are encouraged to proactively complete an analysis of their current employees to identify and address any anomalies which may suggest inequity.
4. Effective communication: Open communication about compensation policies and decisions is essential to promote engagement and perceptions of equity. Employees who have a good understanding of how pay decisions are made have a more positive impression of the organization.

Implementing a robust compensation framework that comprises a clear philosophy and well-structured programs will enable organizations to adapt to fluctuations in the labour market and economic uncertainties. Companies could benefit from focusing on balancing monetary rewards with holistic employee benefits.

Additionally, creating tailored employee engagement initiatives and remaining responsive to the shifting dynamics within the workplace is also important. With the talent marketplace constantly evolving, prioritizing learning for leaders at all levels can help maintain a competitive edge. Together, these strategies can cultivate a resilient and engaged workforce which is essential for organizational success.

Succeeding in a new age of workforce strategy

The landscape of human capital management is set to transform significantly in 2025. By harnessing AI technology and focusing on personalized employee experiences, leaders can effectively navigate these changes and create a work environment that promotes both organizational efficiency and employee satisfaction. This proactive approach will position businesses to tackle future challenges and seize emerging opportunities.

Learn more about these trends and others. Download the 2025 HR trends guide.

This guide is intended to be used as a starting point in analyzing Top Canadian Talent Trends for 2025 and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

¹ADP Canada 2024 Workforce Trends Survey of 178 ADP Workforce Now Comprehensive Services Clients

²ADP Canada 2024 Workforce Trends Survey of 178 ADP Workforce Now Comprehensive Services Clients