When Helen Huang, vice-president of HR at Ottawa software company DistillerSR, had to cut back on co-op hiring, she knew it would have ripple effects for the company.
“We had a bit of a dip in 2024,” Huang told OBJ in reference to co-op hiring. “There were some macroeconomic headwinds and there was this pre-emptive move for the organization to manage our risk in terms of expenses. So, of course, before you look at full-time permanent roles, you always look at the temporary positions.”
After years of consistent co-op hiring, Huang said the company cut back on the number of students it brought in starting in the last quarter of 2023 and into the first quarter of 2024. Throughout this year, she said hiring has ramped back up.
“We’re not fully back to where we were, but we’re pretty close,” she said.
For a SaaS company such as DistillerSR, Huang said co-op is an essential part of the talent pipeline, which is why a hiring slowdown can have ripple effects.
“It’s a way for us to get to know the talent,” she said. “We onboard them pretty consistently every semester. Our leaders get to work with them for four, sometimes eight, months and then they become a key tool for us if we’re hiring junior employees for full-time positions. They’ve always been a key source of permanent talent for us.”
For many students, co-op placements are essential in an increasingly competitive job market, according to Chantal Yelle, supervisor of business development and partnerships, which includes the co-op program, at the University of Ottawa.
“Having a degree no longer guarantees marketability due to the increased number of experienced workers becoming job-seekers,” Yelle told OBJ.
While the co-op market faced significant disruption during the pandemic, the past two years, Yelle said, have been slow for other reasons.
According to Yelle, co-op hiring grew after the 2020 downturn, peaking in 2022 with 4,500 uOttawa students finding placements. But since then the job market as a whole has slowed, she said, and the co-op market has felt the effects.
The rise of AI is one one factor at play, she said, leading some companies to cut junior-level jobs, but it is not the biggest issue.
“In 2023, we started seeing and hearing about a private-sector slowdown. It was big companies announcing big cuts. Then add to that, over the next year or two, provincial and federal elections, which cause a lot of uncertainty. The government started slowing down (co-op hiring) as well. Then it was all about the trade war, plus the federal government announcing major cuts,” said Yelle.
“It’s like a double-whammy right now for students. Employers, whether they’re government or private sector, are dealing with so much uncertainty.”
Yelle added that federal government hiring practices have an outsized impact in Ottawa, no matter what kind of placement students are looking for.
“The reality of our market is that we’re very dependent on the federal government, being in its backyard,” she said. “It can be very positive when things are going well, but not when things are slowing down politically.”
For organizations like DistillerSR, there are internal factors to consider.
“We need to make sure, before we make that commitment to a student, that there is a real learning and work opportunity here for that student. We won’t bring that student on unless we know that they can truly add value and there’s a body of work for that student,” said Huang.
“The second piece is that, to enable the first piece we need to have a seasoned employee or lead who can afford to mentor and teach that student. It does pull from their full-time workload.”
On the other side of the coin, some companies are growing their co-op program without taking on as many new students.
Waterloo-based software company Magnet Forensics, which has an office in Kanata, said its co-op hiring has grown over the past few years, but it has reduced the number of new postings because successful co-op hires are continuing or returning to the company for additional terms.
“When we consistently find strong matches from a particular school for specific roles, we continue to focus our posting and recruitment efforts there,” HR coordinator Meghan Eby told OBJ in an email.
In the past year, she said four students have extended their current term, 10 have requested an additional term and eight are already confirmed to be returning for the winter 2026 term.
She added that co-op has been essential to the company’s talent pipeline, with 15 per cent of students hired back as full-time employees.
“While our campus hiring has not dramatically increased, our program continues to gradually grow year after year,” Eby wrote. “Recently, we shifted our school partnerships and increased opportunities at the University of Ottawa. This change, combined with past strong matches with uOttawa students, has led us to increase hiring at this specific university.”
For post-secondary institutions hoping to encourage businesses to bring students on board, Eby said relationship-building with employers and easy access tools make the process smoother.
More training in soft skills, she added, better prepares students to jump into the work. “Providing students with clear guidelines on professional expectations,” she said. “This can include best practices if you are no longer available for an interview or need to reschedule, when and how to approach wage negotiations and the importance of formally accepting offers. These can help students present themselves more professionally and align with employer needs.”
The University of Ottawa is looking for ways to upskill students to help them compete in the current job market, according to Yelle. Given layoffs, potential government cuts and fewer junior roles, she said students and new grads are competing for jobs against experienced workers.
“They don’t quite understand that they’re in their student bubble,” said Yelle. “It’s a tough job market so a big part of what we’re trying to do is educate students. Our career corner has been developing workshops based on market surveys of industries about gaps in skill set: project management, professional communication and the power of data. These are all things we’re trying to teach so students can be better-equipped to compete once they graduate.”
After a few years of challenges, Yelle said co-op coordinators such as herself are starting to see an uptick in activity in the private sector.
“In the last eight months when we were trying to plan placements for summer, (companies) weren’t as active. They were posting but we weren’t converting to interviews,” she said. “Now, they’re posting jobs, they’re actually coordinating interviews … It’s always been cyclical. We’re optimistic right now. And we’re pretty confident that, once (the federal government) stabilizes, things will pick up again.”