A tough year for Canadian workers is ending with even tougher sentiment. Employment Hero’s newest national poll—spanning more than 800 part-time and full-time employees—captures a workforce that’s stressed, stalled, and scanning the horizon for more bad news in 2026.
The report lands at a moment when Canada’s labour market remains a casualty of the ongoing trade war with the U.S., which has hampered industries from auto manufacturing in Ontario to oil and gas in Alberta. Hiring freezes, slowed growth, and cross-border volatility have shaped much of 2025, leaving employees questioning not just the stability of their jobs but the trajectory of their careers.
And while no generation is thrilled with the current landscape, one group stands out for how sharply the downturn has hit them: Gen Z.
Gen Z Ends 2025 Underemployed—and Ready to Jump Ship
If 2025 was a proving ground for early-career Canadians, many Gen Z workers feel like they’re being forced to prove the wrong things.
According to Employment Hero’s findings, 22% of all employed Canadians say their job falls below their education level—a familiar complaint in down markets. But for Gen Z, the mismatch is glaring: 32% say they’re overqualified for their current role, compared to 20% of Millennials and 16% of Gen X.
Worse still, nearly half of Gen Z (46%) aren’t even working in their desired career field, a significantly higher rate than Millennials (28%) or Gen X (25%). That’s the kind of misalignment that rarely corrects itself without either internal mobility—or external exits.
And it appears Gen Z has already chosen the latter.
Employment Hero reports 55% of Gen Z employees plan to look for a new job in 2026, far outpacing Millennials (39%), Gen X (30%), and Baby Boomers (6%). It’s not a subtle message.
The Expectations Gap
One of the most telling pieces of the study is the gap between what Gen Z believes they deserve and what they realistically expect to get.
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82% say they deserve a raise in 2026
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Only 53% expect to receive one
A similar split appears around promotions:
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62% believe they should be promoted next year
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Only 32% think it will actually happen
Whether that’s optimism meeting reality, or confidence colliding with macroeconomics, depends on who you ask. But the data suggests a generation that still values rapid progression—even if economic conditions don’t.
Kevin Kliman, President of Canadian Business at Employment Hero, frames it as a communication opportunity for employers:
“It starts with hearing them out—why do they feel a mismatch between their goals and their current role? From there, you can work together to identify opportunities for mentorship and exposure.”
That’s a reasonable prescription, though it may not outweigh the gravitational pull of a stronger job market if one emerges in 2026.
Layoff Anxiety Takes Center Stage
If 2025’s headline was stalled career momentum, the subheading was layoffs—and the fear they’ll continue into next year.
The poll shows:
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16% of workers feel at risk of a layoff in 2026
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25% feel anxious about the possibility
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26% plan to delay major financial decisions like home purchases or car upgrades
Layoffs were an uncomfortable reality throughout 2025, and not just in sectors typically vulnerable to downturns. The trade war amplified pressure on industries with deep North American supply-chain ties, and employees are still absorbing the shock.
Ontario and Alberta Feel It Most
Two provinces stand out for layoff concerns:
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20% in Ontario say they’re at risk
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20% in Alberta say the same
And their anxiety levels are even higher:
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29% of Ontarians are worried
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24% of Albertans feel the same
These numbers aren’t surprising given the industries hit hardest. Manufacturing output in Ontario has been throttled by fluctuating cross-border tariffs, while Alberta’s oil and gas sector continues to navigate price instability, export constraints, and political unpredictability.
Kliman notes that uncertainty acts as a culture-level disruptor:
“Anxiety around potential layoffs can ripple through a workplace. It affects morale, focus and how teams show up for each other. In times like these, people look to their leaders for stability and transparency.”
It’s a reminder that layoffs don’t just shrink headcount—they shrink trust.
A Workforce in a Holding Pattern
Zooming out, the survey paints a picture of a workforce caught between two forces: an economy slowing under geopolitical strain, and employees attempting to recalibrate amidst stalling mobility.
This isn’t just a Canadian story, either. Across the global HR tech landscape, 2025 has been a year defined by:
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the return of selective hiring (openings that take longer and require more proof of value)
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employers leaning into automation to plug efficiency gaps
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early-career workers facing higher barriers to entry
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rising expectations around transparency and internal mobility
Employment Hero’s findings echo what many HR teams have been tracking: a growing disconnect between employee ambition and structural capability.
The irony? Talent shortages still exist—especially in tech, engineering, compliance, and AI-adjacent roles. But the mismatch between skills, experience levels, and available positions remains a major friction point.
Looking Toward 2026: What Might Shift?
While Canada’s economic trajectory remains closely tied to the outcome of the U.S. trade negotiations expected early next year, several trends may shape the employee experience in 2026:
1. Internal mobility could become the new retention strategy
If hiring budgets remain tight, companies may shift focus to cross-training, skill-building, and lateral movement programs—an area Gen Z has been vocal about.
2. HR tech adoption will likely accelerate
Tools that help organizations measure skill gaps, support continuous performance management, or forecast workforce planning scenarios might get a boost as employers try to stabilize internal ecosystems.
3. Employee expectations won’t soften
Gen Z’s demands for pay equity, progression, and relevance aren’t trends—they’re generational norms. Employers that fail to adapt risk high turnover and low engagement.
4. Layoff transparency could become a differentiator
Organizations that handle restructuring with clarity and consistency often emerge with stronger reputations (and retention). Employees increasingly expect early communication—especially in volatile markets.
The Bottom Line
Employment Hero’s year-end poll isn’t just a temperature check—it’s a warning light. Gen Z is leaning toward the exits, mid-career workers are feeling stalled, and employees across the board are bracing for more layoffs.
But underneath the anxiety is a simple throughline: workers want clarity, mobility, and stability. And if employers can’t offer all three in a volatile market, offering one or two—paired with honest communication—might make the difference between keeping top performers and watching them leave for greener pastures.
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