There’s a noticeable drop in confidence and optimism among Canadian business leaders as they face economic challenges, tackle uncertainties over technology and consider other marketplace developments in the year ahead.

That’s according to the latest survey and Business Outlook Report from Zoho Canada: Nearly two-thirds (61.2 per cent) of respondents remain optimistic about their business prospects for the rest of 2024, but that’s down more than ten points from the 74.1 per cent who shared an optimistic sentiment last year.

The Zoho Canada Business Outlook Report explored several topics with 1,000 Canadian business leaders (enterprise managers and C-level execs, business owners and operators) to prepare its survey. Business performance, staffing trends and employee wellness, economic impacts, and technology usage were looked at. Participants represented small and large operations across a variety of industries including HR, legal, accounting, start-ups (businesses less than two years old), transportation & logistics, IT, financial services, retail, and marketing.

Zoho is an Indian multinational technology company that’s developed more than 50 computer- and web-based business tools, such as the Zoho Office Suite. Zoho Canada is based in Cornwall, ON.

Zoho found myriad reasons for the decline in business optimism among Canadian business leaders: broadly, a third of respondents (32.9 per cent) cite the economy overall as their biggest challenge. More directly, as many as 51.9 per cent reported seeing a decline in customer confidence – and spending.

It’s all contributing to tighter cash flows, increased capital concerns, and more than a little unease.

“Economic uncertainties are forcing Canadian businesses to be cautious and adapt,” said Chandrashekar LSP, Managing Director of Zoho Canada, when releasing the report. “But even as businesses work to manage external challenges, they remain somewhat optimistic about growth and enhanced customer experiences.” The optimism, he later told WhatsYourTech, could be seen in the stats that show 22 per cent of surveyed businesses reported an increase in customer spending and another 21 per cent said spending is stable.

Overall, in its most positive read, the survey indicates that 58 per cent of businesses say they are succeeding as planned.

The survey, conducted in April 2024, also highlights mixed priorities regarding technology use, particularly the seemingly ever-present new applications for Artificial Intelligence (AI). There’s a split among those who see it as the most critical technology for their business and those who don’t (45.4% of respondents are not considering it all that crucial); those businesses have other business priorities, LSP explained.

“Canadian businesses aren’t missing the boat by not seeing AI as so critical now. Instead, they’re focusing on tech priorities such as cybersecurity, CRM and collaboration tools, but AI is still part of the mix – more than 36 per cent of respondents say it’s important.”

Important yes, with certain codicils: Business leaders are concerned (moderately or very, 34.6 per cent combined) about AI replacing existing jobs; in fact, some see reducing head count as a primary reason for adopting AI (but just ten percent or so).

Staffing was an area of inquiry in the survey, and results show that most companies (57.2 per cent) plan to maintain current staffing levels. More than a third (34.5 per cent) intend to hire more staff, and less than ten per cent (8.3) say they plan layoffs.

As revealed by the survey and noted in remarks by LSP, many businesses want to enhance their customers’ experiences and they see how customer relationship management software can deliver better outcomes for businesses with teams working both in and out of the office. Zoho has recently announced early access to its CRM for Everyone platform which gives every team in any company their own space, or Team Module, to actively contribute and accelerate customer growth and improve the overall sales and marketing experience.

Knowing that hybrid work is an increasing reality for many Canadian businesses, the survey also tracks a stated desire by many businesses to strengthen data protection and to prevent breaches and attacks. Cybersecurity is a top-of-mind concern for many companies, and LSP reminds his corporate customers (and survey respondents) how important it is to help employees connect to the Internet securely; ensure employee access to the right set of apps based on their roles; create secure access to shared accounts, while adding an additional level of security for the most critical accounts.

An interesting aspect of this business confidence survey was that it inquired about the state of employee wellness at Canadian businesses.

Employee health and wellness can certainly have an impact on the success of any company, but the Zoho Business Report found that less than half of respondents had a wellness program in place.

Many employers say they do encourage a “work-life balance”, the survey found, but experts in the HR and employee relations field say that is a fallacious concept: the false equation that we have but two main aspects to our existence, one is work and the other is life (and somehow, they balance out) is dangerously misplaced. Some workplace wellness advocates suggest we use alternative ‘life-work-sleep’ balancing acts; others call for a ‘life-work-me’ balance; still others recognize that there should be an imbalance, that the scales should always be tipped towards life.

“As businesses navigate economic uncertainties and the technology that’s changing how we work, it’s important to consider ways to foster a healthier, more resilient workforce,” LSP observes. He notes that the survey results do show a trend towards more employee wellness activities among businesses, despite the overall low current numbers. “Given that there aren’t any workplace requirements for paid time off for mental health days, it may be that some employers see a benefit to offering them” on their own, as at least 15 per cent of survey respondent said they did.

While there may be some differing opinions of how to achieve it, most agree that employee wellness is good for business and the bottom line.

In an analysis from Deloitte Insights, the research arm of accounting giant Deloitte, researchers calculated the return on investment (ROI) of workplace mental health programs at various stages of maturity.

They examined 10 Canadian companies with established mental health programs or initiatives. The subjects were chosen to represent a variety of industries and locations across the country.

It found that for every $1 invested in workplace mental health, the median yearly return was $1.62, a figure that rises to $2.18 for programs that have been in place for three years or more.

With its insights into certain key areas of business in Canada, and despite its overall tracking of a confidence drop in Canada, the Zoho report does give some solid reasons for cautious but continued optimism: just over 63 per cent of respondents anticipate growth of between one and twenty per cent, the latter being cause for outright celebration in many businesses.

 

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