Survey: Canadian firms worried about talent, weak demand
February 13, 2012
Small business owners in Canada are increasingly worried about the availability of talent in the nation's workforce, even going as far as to cite the perceived skills gap as the preeminent threat to their operations, according to a survey released this week by consultant firm the Alternative Board.
Specifically, the study found 40 percent of surveyed Canadian small business owners report weak demand and the inability to attract top talent as their two main challenges. This compares to the U.S., where small business owners are more worried about excessive regulations and a lack of credit financing opportunities.
"Small business owners face many difficult decisions during these economic times and finding top talent is a big concern," said Jason Zickerman, president and CEO of the Alternative Board, in a statement.
However, respondents also showed greater optimism for their businesses. More than half reported that their business improved overall from 2010 to 2011.
Last week, the Canadian Federation of Independent Business reported a slight increase in its January Business Barometer Index, reaching 65.2 points, up from 65 in December.
"There are signs of strength though, the natural resources sector including manufacturing and wholesale industries remain quite upbeat, with index levels approaching 70," said Ted Mallett, vice president and chief economist at the CFIB. "And, finance, insurance and real estate industries also appear to have shaken off some of its earlier caution."
But some analysts maintain that Canada must uphold its manufacturing sector to sustain growth in small business activity, as well as the wider national economy. The Royal Bank of Canada recently reported lower readings for new factory orders, output and employment in January, as the manufacturing purchasing managers index fell to 50.6 last month, down from 54 in December.
Although not directly related to consumer activity, which accounts for the bulk of the Canadian economy, manufacturing provides insight into the state of overseas demand and nationwide employment, especially in the private sector. Many analysts point out, however, that manufacturing productivity is no longer proportional to hiring trends, as investment in new equipment and technology may drive up output while sustaining payrolls.