The IT Nerd

The newly released Zoho Canada SMB Outlook Report by Zoho Corporation, a leading global technology company, reveals that Canadian small and medium-sized business leaders are optimistic about their business prospects. According to the survey, 62.1% of respondents expect to grow between 1% and 20+%. 

Surveying 1,016 Canadian business leaders (C-level to manager) in March about business performance, staffing, the economy, and tech usage, the Zoho Canada SMB Outlook Report additionally reveals that 64.6% of business respondents say their pricing has been impacted by inflation.

Key Survey Findings:

• Respondents continue to be optimistic about their business, with 62.1% expecting to grow between 1% and 20+%.
• Ontario respondents are particularly optimistic, with 63.8% expecting to grow between 1-20+%.
• Employees are key in terms of lessons learned, business challenges, and tech priorities. However, businesses are holding steady with their staffing plansbased on 70.1% indicating no change in their hiring plans, 25.8% hiring, and only 4.1% anticipating layoffs. 
• Inflation is nearly twice the challenge as interest rates are for businesses.
• Respondents seem to be confident with how cybersecurity and customer privacy are handled but this confidence may be misplaced since one-third of people indicate that they don’t know about their business’s efforts in these areas. 

The Zoho Canada SMB Outlook Report builds on three previous versions that surveyed individuals in October, 2022, May, 2022, and October, 2021. The previous October report indicated that 73% of respondents were optimistic about the future. Currently, optimism is down more than 10 percentage points. 

Note that Ontario businesses are the most optimistic about the next six months, replacing Quebec respondents who were the most positive according to their responses in the previous two surveys.

Business Growth:

Respondents continue to feel good about their business prospects with 62.1% of respondents expecting to grow between 1% and 20+%. This optimism includes 38.2% expecting growth of 1-10%, and 15.4% expecting growth of 10-20%, and 8.5% expecting 20+% growth. 

Conversely, 31.2% anticipate zero growth while only 7.8% expect declines.

• Alberta – 53% expecting to grow between 1-20+%
• BC – 65% expecting to grow between 1-20+%
• ON – 63.8% expecting to grow between 1-20+%
• Quebec – 59.7% expecting to grow between 1-20+%

Staffing:

Staffing plans indicate that respondents are holding steady with 70.1% projecting no change in their hiring plans, 25.8% hiring, and only 4.1% anticipating layoffs.

• Alberta – 41.8% hiring, 50.9% no change, 7.3% layoffs
• BC – 41.3% hiring, 53.3% no change, 5.4% layoffs
• ON – 43.6% hiring, 51.9% no change, 4.5% layoffs
• Quebec – 44.8% hiring, 48.7% no change, 6.5% layoffs

While respondents planning to hire have decreased 17.6% since the previous survey, fewer people currently anticipate layoffs. With nearly 20% more respondents indicating no change in hiring plans, it seems that they are optimistically holding steady with staffing plans.

Lessons learned from managing your business through the past 12 months. Staff were the priority based on the combined focus on pay/benefits and flexible work models, which was consistent across provinces.

• 22.1% – increased staff pay and benefits
• 20.6% – more aggressive pricing
• 20.5% – more flexible work models
• 19% – cost reductions
• 17.8% – increased efficiencies

The Economy:

Inflation continues to impact businesses with 49.8% of respondents saying they’ve been impacted and 19.2% indicating no changes.

• Alberta – 54.6% yes, 15.1% no change
• BC – 44.8% yes, 20.7% no change
• ON – 49.5% yes, 20.3% no change
• Quebec – 56.3% yes, 15.3% no change

Fewer respondents say inflation is impacting business versus the previous report’s 64.6%.

Response to interest rates: 28.2% increased prices, 18.1% delayed capital expenses, and 10.6% delayed hiring.

• Alberta – 33.6% increased prices, 15.1% delayed capital expenses, 8.4% delayed hiring
• BC –  31.6% increased prices, 18.4% delayed capital expenses, 5.7% delayed hiring
• ON –  27.3% increased prices, 16.8% delayed capital expenses, 12.3% delayed hiring
• Quebec –  25.7% increased prices, 27.1% delayed capital expenses, 11.1% delayed hiring

Notably, 43.1% of all respondents said rates didn’t impact their business.

Inflation’s impact on offers for new hires is limited with 34.6% saying it’s affected offers, 24.8% saying it hasn’t, and 40.5% saying the question isn’t applicable.

• Alberta – 37.8% said it’s affected offers, 22.7% said it hasn’t, and 39.5% said N/A
• BC – 31.6% said it’s affected offers, 28.7% said it hasn’t, and 39.7% said N/A
• ON – 34.7% said it’s affected offers, 23.5% said it hasn’t, and 41.8% said N/A
• Quebec – 36.8% said it’s affected offers, 25.7% said it hasn’t, and 37.5% said N/A

Inflation’s overall impact on new hire offers is down, with fewer people saying it’s impacted offers.

Inflation is nearly twice the challenge as interest rates are for businesses. 42.3% of respondents said high inflation is the bigger challenge, while 21.7% said it was high interest rates, and 36% weren’t sure which was more of a challenge.

• Alberta – 51.3% high inflation, 18.5% high interest rates, 30.3% weren’t sure
• BC – 44.3% high inflation, 21.3% high interest rates, 34.5% weren’t sure
• ON – 40.5% high inflation, 22.2% high interest rates, 37.3% weren’t sure
• Quebec – 42.4% high inflation, 24.3% high interest rates, 33.3% weren’t sure

High interest rates matter, but only for just over a third of respondents who say rates have caused them to adjust pricing: 36.2% say yes, 26% say no, 37.8% N/A

• Alberta – 39.5% yes, 25.2% no, 35.3% NA
• BC – 36.2% yes, 23% no, 40.8% NA
• ON – 36.5% yes, 26.2% no, 37.3% NA
• Quebec – 36.1% yes, 28.5% no, 35.4% NA

Technology

Customer experience is a business automation priority. Respondents indicated the following workflow automation priorities: 41.4% on customer experience, 15% on finance, 14.7% on custom applications, 7.8% on HR, 21.1% unknown.

• Alberta –  40.3% on customer experience, 17.6% on finance, 15.1% on custom applications, 9.2% on HR, 17.6% unknown.
• BC –  36.8% on customer experience, 16.1% on finance, 18.4% on custom applications, 13% on HR, 21.3% unknown.
• ON –  45% on customer experience, 13.7% on finance, 12.1% on custom applications, 7.4% on HR, 21.7% unknown.
• Quebec –  34.7% on customer experience, 16.7% on finance, 19.4% on custom applications, 8.3% on HR, 20.8% unknown.

Tech priorities focused on staffing, which was mirrored for provinces.

• 21.1% – facilitating remote work
• 20.5% – investing in talent and digital skills
• 20% – automating or digitizing processes

• 19.6% – creating or improving digital product and services
• 18.9% – improving decision-making processes

Respondents seem to be confident with how customer privacy is handled, but this confidence may be misplaced since one-third of respondents don’t know their business’ process. 53.8% yes, 12.9% no, 33.3% don’t know.

• Alberta – 45.4% yes, 10.1% no, 44.5% don’t know
• BC – 55.2% yes, 14.9% no, 29.9% don’t know
• ON – 53.5% yes, 11.9% no, 34.5% don’t know
• Quebec – 60.4% yes, 16.7% no, 22.9% don’t know

Respondents have some confidence in their cybersecurity, but this confidence may be misplaced given that more than one-third of respondents don’t know their business’ process: 50.8% yes, 13.4% no, 35.8% don’t know.

• Alberta – 48.7% yes, 13.4% no, 37.8% don’t know

• BC – 49.4% yes, 17.2% no, 33.3% don’t know
• ON – 49% yes, 12.8% no, 38.2% don’t know
• Quebec – 61.1% yes, 11.1% no, 27.8% don’t know

Report Methodology

Conducted in March, 2022, using Zoho Survey and Zoho Analytics, this study contacted 1,016 individuals across Canada. Participants in the study included a range of business leaders, from manager roles to the C-level, at small and large enterprises across a variety of industries.

The Canadian SMB Outlook Report builds on three previous versions that also surveyed individuals in October, 2022, May, 2022, and October, 2021.