January 22, 2024

Weekly EconMinute—Employment by business size in Alberta

In this week’s EconMinute, we’re talking about employment by business size in Alberta.

Often times, when we want to know what’s driving jobs gains in the province, we look to which industries have added the most jobs. However, another consideration is how businesses of different sizes are contributing to employment growth. In other words, is it small or large businesses that have driven employment most over the last few years?

To answer this question, we split businesses into three groups based on the number of people they employ: small businesses are those with fewer than 20 employees, medium-sized businesses are those with more than 20 but fewer than 100, and big businesses are those with 100 or more.

One caveat to note is that jobs growth could be driven by one of two things (or both): one is that existing businesses add staffing, and another is that more businesses enter the market or add enough staffing to “tip” them into a different business size (or the opposite).

Based on our analysis, here’s what we found:

  • Overall, larger businesses have added the most jobs while small businesses have added the least. In fact, small businesses have just barely maintained their staffing levels of three years prior.
  • Of the 255k jobs created since 2020, 159k (62%) were in large businesses, 82k (32%) were in medium-sized businesses, and just 14k (6%) were in small businesses.
  • As a result, large businesses now account for 34% of the province’s total employment, up from 30% as of January 2020.  
  • Likewise, big businesses have driven disproportionate growth nationally. Canada-wide, businesses that employ 100 people or more account for 38% of all employment (up from 35%).
  • One difference within Alberta, however, is that medium-sized businesses have seen strong growth over the last couple of years, too, though not at the pace of big businesses. As such, its share of employment remains the same at 35%. 
  • Meanwhile, small businesses—which used to be a bigger employer in Alberta than elsewhere in Canada—account for a smaller, albeit still sizable, share of employment at 31% (down from 35%).

What will happen as the labour market cools is a little unclear. Splitting these groups further shows that the largest businesses (500+ employees) have begun to cut staffing. However, more mid-sized businesses (100 to 500) continue to moderately grow. Meanwhile, smaller businesses seem set to employ a smaller share of the workforce with growth remaining subdued.   

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