As one of the world’s top ten oil producing countries, Canada is one of many markets across the globe directly affected by the dramatic fluctuations in oil prices over the past few years. In 2014, an oversupply of oil led prices to fall from around $100 to about half that in just six months and ultimately plunge below $30 for the first time in over a decade. Since showing signs of life in early 2016, oil has stabilized around $50. This has left an entire industry—and in some cases entire national economies—scrambling to adjust to a new paradigm in which oil is not nearly as profitable as it once was.
Indeed data show clearly that the oil industry’s price collapse and tentative recovery have strongly affected the labour market. We can track the industry’s demand for labour with oil-related job postings and the supply of labour through oil-related job searches. Both have responded sharply to swings in oil prices over the past few years.
To focus on the oil industry’s labour market, we utilize keywords that allow us to zoom in on job postings and searches for job titles common to the industry, such as petroleum engineer, concrete pump operator and derrickhand. Overall, after showing promising growth in the second half of 2016, oil-related job postings have flatlined in 2017. Moreover, our data show that industry employers and job seekers have responded to oil price fluctuations to different degrees and that trends vary among key oil-producing regions.
Canadian oil labour market trends
This figure shows the relationship between oil prices and oil-related job postings as a share of all job postings on Indeed. At first glance, prices and postings seem to track each other relatively closely. But, on further inspection, some interesting differences emerge.
The Canadian oil industry’s reaction to falling oil prices lagged. Oil prices started declining in June 2014 and began tumbling outright in the fourth quarter of that year. However, oil job postings did not begin to dip until October 2014, several months later. Then, at the start of 2015, they fell off the cliff. Thus, by the time employers really started to pull back, much of the fall in oil prices had already occurred and prices had temporarily leveled off.
This delay seems counterintuitive. You might think employers would rein in hiring the moment prices dipped in order to cut costs. It’s possible though that employers were looking for some clear indicator or the crossing of a threshold to signal that the market turn was durable. Judging by the figure above, a $50 oil price could very well have been that threshold.
Furthermore, what makes this lagged employer reaction especially interesting is its contrast with the industry response in Canada’s closest neighbour. Previous Indeed Hiring Lab research found US oil-related job postings dropped nearly in lockstep with oil prices during the same time period.
In early 2016, oil prices bottomed out and began to show signs of life. Nonetheless, Canadian oil job postings fell several more months as employers continued to cut back. The share of oil-related job postings reached its low point in April 2016 and as of mid-April 2017 regained nearly 25% of its losses from the oil price collapse.
Turning to the other side of the labour market, the next figure compares oil-related job searches and postings, showing that job seekers responded quickly to the drop in oil postings. Almost as soon as available oil jobs plummeted, searches for oil jobs followed suit.
Oil-related job seekers were also quite responsive to positive changes in the number of postings available. Around April 2016, when oil postings began to rebound, searches for oil-related jobs also did so almost in lockstep. By mid-April 2017, oil-related job searches as a share of all searches had recovered nearly 22% of losses from the oil price collapse.
Alberta and Saskatchewan oil labour market trends
To see how oil price fluctuations affected different areas of the country, we can take a more granular look with job search and posting data in Alberta and Saskatchewan, which are responsible for 80% and 12.6% of Canadian crude oil production respectively. The figure below shows the fall in oil-related postings and searches in the two provinces as a share of all postings and searches from the 2014 peak in oil price to their low point. Job postings in Alberta took a bigger hit, declining by nearly 80% compared with 48% in Saskatchewan. The share of oil searches fell by about the same amount in each province.
Notably, in Alberta, searches fell by a smaller percentage than postings, while in Saskatchewan it was the opposite. At the national level, oil postings and searches exhibit some relationship since they declined dramatically at nearly the same time, with searches declining less than postings. So one might think searches would decline by a percentage less than the fall-off in postings in all locations. It appears though that people were less willing to give up looking for oil jobs in Alberta, possibly because options outside the industry were limited in the province. Alberta looms large in Canada’s oil industry. It is by far the biggest oil producing province and Indeed data show that Alberta oil-related job postings as a share of all job postings are nearly four times the national average.
The same trend is evident when we view how much oil postings and searches have bounced back. The next figure shows their recovery from their low point following the oil price collapse.
Job seekers have been eager to find work in Alberta’s oil fields, partly due to how much better the province’s oil labour market has fared compared to that of Saskatchewan. Since reaching its low point after the oil price collapse, the share of oil-related job postings in Alberta has regained nearly 35% of its losses, while the share of oil-related searches has recovered about 24%. The oil industry labour market of Saskatchewan has been noticeably less revitalized, recovering only 9% of its search losses. Moreover, in Alberta, the gap between the recovery in postings and searches is slightly less than in Saskatchewan.
Again, this likely reflects Alberta’s status as Canada’s dominant oil producer. When workers who left the industry for greener pastures think about returning, it makes sense they would look first where opportunities are most abundant.
Many of the underlying oil market fundamentals that contributed to the price collapse remain in place, so it doesn’t appear that immediate relief is in the cards. Canadian oil producers will likely have to keep making do in a low oil-price environment, which will surely influence their hiring decisions. As we’ve seen though, whatever direction oil prices head, people looking for jobs in the oil patch will respond and adjust their job search strategies as necessary.
The key source for all Indeed Hiring Lab research is the aggregated and anonymized data from job seeker and employer behavior on Indeed’s sites in over 60 countries across the globe. Indeed job posting data include millions of jobs from thousands of sources. It is important to note that Indeed job postings do not reflect the precise number of jobs available in the labour market, as an opening may be listed on more than one website and could remain online for a period of time after it has been filled. Moreover, employers sometimes use a single job posting for multiple job openings. However, the data do represent a broad measure of each job title’s share of job openings in the labour market.
This analysis focuses on nearly three and a half years of job search and posting data, from January 2014 to mid-April 2017. To focus on the oil industry’s labour market, we utilize keywords that allow us to zoom in on job postings and searches for job titles common to the industry, such as petroleum engineer, concrete pump operator and derrickhand.