Employers split when it comes to Canada’s economy

Many employers still struggling with recruitment, retention of talent, finds report

Employers split when it comes to Canada’s economy

Small employers in Canada are divided when it comes to their view of the economy in the country, according to a recent report from APD.

Overall, 53% are feeling negatively about the economy, including 19% who cite the current economy as a primary source of stress.

Meanwhile, 47% still feel optimistic despite the current economic climate.

Chief executive officers are "cautiously optimistic" this quarter and are planning to hoard employees amid persistent labour shortages concerns, according to a separate report.

How to hire in 2024?

With the current economic trend, nearly a third (32%) of small business owners are facing challenges in finding employees, according to ADP’s survey of 756 Canadian small business decision makers and employees conducted March 12-14, 2024.

Among these employers, 69% are taking action to combat hiring difficulties. About 3 in 10 (29%) have offered higher wages, and 26% have offered flexible work models to improve employee retention. Also, 20% have increased benefits (i.e., more vacation, perks).

Meanwhile, 21% say they have to let employees go due to inflation.

“The intricate dance between talent acquisition and retention becomes apparent, with small business owners navigating between economic constraints and the importance of retaining skilled employees. Innovative approaches, such as offering higher wages and flexible work models, underscore small businesses' commitment to adaptability and employee satisfaction,” says ADP.

Employees who feel confident in their job search saw a decline in the second quarter of 2024 as employers grow "increasingly strategic" in hiring, according to a previous report.

With these challenges before employers, they seem to be gaining the loyalty of workers. 

Employees say that the benefits of working at a small business might include a closer relationship with management (42%), a stronger team bond (41%) and better work-life balance (40%).

“Beyond monetary incentives and compensation, small businesses are recognizing the value of fostering a positive workplace culture. Strong relationships between owners/managers and employees, along with a supportive team environment, emerge as key drivers of employee engagement and satisfaction,” says ADP.

How can business processes be improved?

Six in 10 Canadian small business owners report taking action to ensure operational needs are still met, according to ADP.

Nearly one in five (19%) have tried to make their processes more efficient, aiming to optimize productivity and reduce costs.

About the same number of small employers (17%) have become more personally involved in the end-to-end running of the business, indicating a hands-on approach to managing operations.

And 15% have embraced innovation by hiring individuals with skill sets previously unexplored, demonstrating a commitment to adaptability and growth.

Overall, 49% of small business owners report not feeling worried about their ability to compete. This highlights “a resilient spirit amongst entrepreneurs,” says ADP.

Seventy percent of employers say that aggressive performance goals have exacerbated stress levels, while 61% cite increased employee monitoring as a significant stressor, according to a recent Dayforce report.

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