A majority of Canadian companies are actively preparing for a potential recession, with many shifting focus from long-term planning to short-term survival strategies, according to a survey.
Overall, 76% of businesses are bracing for a recession. Over half (51%) believe a recession will occur within the next 12 months, while 14% say Canada is already in a recession.
Ninety-three percent of companies say a recession would affect their organisation, with 55% anticipating a significant impact, found Express Employment Professionals.
One-third (33%) of respondents indicated their company may not survive a recession this year, a figure that rises to 46% among blue-collar employers.
Canadian small businesses are showing resilience in the face of economic uncertainty, with a majority expressing cautious optimism about both their current position and the future, according to a previous CIBC report.
Hiring plans amid economic uncertainty
Hiring plans are already being influenced by recession concerns, according to Express’ report based on a survey of 500 Canadian hiring decision-makers conducted in June.
Twenty-two percent of companies are not hiring or increasing headcount this year due to economic uncertainty. If a recession occurs, 30% of companies say they would reduce hiring, and 23% would freeze hiring altogether.
Proactive measures are being widely adopted. Eighty-one percent of employers have taken steps to prepare for a downturn, including:
However, these preparations come at a cost. Sixty-two percent of companies report that recession planning has taken time and resources away from efforts to improve their organisation’s long-term future.
Navigating an economic downturn
Despite these challenges, many employers remain cautiously optimistic. Seventy-one percent believe they will be in a better economic position at the end of the year than at the start, and 54% view a potential recession as more of a growth opportunity than a threat, found Express Employment Professionals.
Hiring managers identified several supports that would help them navigate a downturn, including:
- training and upskilling programmes (47%)
- mental health resources for employees (33%)
- flexible staffing solutions (33%)
- clearer communication from leadership (28%).
“The most resilient companies don’t just react to economic shifts; they use them as catalysts to become more efficient,” said Bob Funk Jr., CEO, president and chairman of Express Employment International. “By streamlining operations and investing in versatile talent, businesses can position themselves for long-term success in any environment.”
Seven in 10 Greater Toronto and Hamilton Area (GTHA) businesses are having difficulty attracting talent due to housing costs, according to a previous report.
Previously, the Canadian Federation of Independent Business (CFIB) called on governments to address the labour quality and mobility issues that small businesses are currently experiencing.