Rising costs top concern for Canadian SMBs: Report

As staffing continues to be a problem, how are employers coping?

Rising costs top concern for Canadian SMBs: Report

The year 2023 is behind us, but the rise in inflation that came last year will still have an impact on small- and medium-size businesses (SMBs) in 2024.

Canadian employers’ biggest concern this year is rising costs (82 per cent), according to a report.

This far eclipses labour shortages (47.8 per cent) and employee retention (45.6 per cent), the other two top concerns for employers.

Despite this, 44.7 per cent of Canadian employers’ main business goal for 2024 is growth.

“With the cost-of-living crisis and slowing economy in Canada in 2023, this year shows some promise and almost 45 per cent of businesses agree,” says Peninsula in the report. “With the steady inflation rate, and the increase in employment rate, 2024 should present some relief.”

A previous ATB Financial report found that 67 per cent employers are optimistic about the economic outlook today, 65 per cent have the same sentiment for the next 12 months and 73 per cent for the next five years.

Coping with staffing challenges

Recruiting top talent is the biggest challenge when it comes to staffing, according to 19.2 per cent of employers in Canada in the Peninsula survey of 79,000 SMBs across five countries – Australia, Canada, Ireland, New Zealand, and the U.K.

To ensure that they don’t lose the talent that they currently have, 80 per cent Canadian of SMBs have offered pay increases.

Those that cannot offer financial remuneration are offering flexible working hours (60 per cent). While 53.5 per cent of employees are already back in the office, 26.7 per cent have flexible working hours as standard.

Nearly six in 10 (58.7 per cent) employers have also turned to reward and recognition, and about half (50.8 per cent) have offered upskilling and training to address labour shortages.

Employee confidence continued its rise just before the year 2023 ended, according to a separate report from Glassdoor. The share of employees reporting a positive six-month business outlook stood at 47.2 per cent in December 2023, up from 46.8 per cent the month prior.

“In 2022, we found that the top two concerns for employers were labour shortages and employee retention,” says Raj Singh, CEO at Peninsula Canada. “Faced with these obstacles, SMBs acknowledged that fostering employee retention was key. And one of the best ways to overcome these challenges was to invest in their employees and that is what we saw happen last year.”

“By prioritizing the professional growth of their employees, businesses not only mitigate the effects of labour shortages but also cultivate a skilled and motivated workforce, fill in gaps in the workplace, and set the foundation for continued success in the ever-evolving business landscape.”

Skill mismatch and digital transformation can also be a challenge for employers this year, according to technology staff augmentation and software development company Xntric Techno Services.

“Rapid technological advancements mean that many roles require skills that are in short supply,” it said via LinkedIn

The company’s recommendation to address this: “Partner with educational institutions, offer in-house training, or employ reskilling programs for your workforce. Learning needs to be a continual process within the work environment.”

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