Canada’s technology labour market is settling into a more cautious and selective phase, according to a new industry report that finds salary growth holding steady, employee turnover continuing to fall, and employers becoming far more targeted about the skills they seek.
The 2026 TAP Network Tech Salary and Total Rewards Report, drawn from data covering more than 190 Canadian technology companies and 26,700 employees across 351 job categories, found median salary increases of 3.5% for 2026 — in line with the previous two years. Organizations surveyed are forecasting a similar 3.4% median increase for 2027, suggesting compensation growth is expected to remain steady rather than accelerate.
At the industry level, High Tech companies reported the strongest median increase at 3.6%, followed by Retail & Wholesale at 3.4%.
Turnover Keeps Falling
One of the report’s most notable findings is a sharp decline in employee turnover. Turnover across the sector now sits at approximately 7%, down from 13% three years ago.
Sachi Kittur, CEO of TAP Network, said the headline salary figure is less significant than the underlying trends. “Employees are moving less, AI capabilities are becoming harder to find, and organizations are being much more deliberate about where they invest in talent,” Kittur said, adding that the shift changes the conversation for People and Culture leaders from simply pricing a job today to understanding what capabilities will matter next.
While lower turnover can offer employers more workforce stability, the report notes it raises a harder question about whether staff are remaining because they are engaged or because there are simply fewer outside opportunities available in a more cautious labour market. That dynamic, the report suggests, is prompting employers to focus more on internal mobility and engagement to retain top performers who could leave once conditions shift.
AI Skills Increasingly Hard to Recruit
The report also points to a widening gap in artificial intelligence talent. Among the skills employers identify as hardest to recruit, AI capability rose from 17% to 25% year over year, making it the third-hardest skill set to hire for, behind sales at 38% and leadership at 44%.
Kittur said organizations are moving quickly from a narrow conversation about AI tools to a broader one about overall workforce capability, with employers needing to determine where human expertise remains most valuable and where work itself needs to be redesigned. Outside AI-specific positions, the report identifies Implementation Consultant, Hardware R&D Engineering Director, and Product/Brand Marketing Director as roles with the strongest headcount growth, reflecting shifting business needs.
Hybrid Work Becomes a Fixed Model
The survey also tracked workplace arrangements, finding that 71% of participating organizations now operate under a hybrid model, compared with 26% fully remote and 2.6% fully onsite. Among hybrid employers, three days onsite per week has become the most common arrangement, up from two days in 2025.
The report frames this as evidence that hybrid work has moved beyond a temporary policy debate and is becoming a fixed part of how organizations structure collaboration and workforce design.
Taken together, the findings describe a Canadian tech workforce that is more stable on the surface, even as the skills and capabilities employers require continue to evolve. TAP Network produces the annual survey in partnership with Marsh, formerly Mercer.
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