TORONTO - Canadian companies are falling behind their counterparts in other industrialized nations in terms of productivity gains, and businesses in this country will have to improve their workplace operations in a number of critical areas if they are to remain competitive, says a major new international study.

Proudfoot Consulting yesterday released its Canadian Productivity Report, a companion study to its Global Productivity Report. The data compares workplace efficiency in Canada to 11 other countries - U.K, France, Germany, Spain, Russia, South Africa, U.S., Brazil, India, China and Australia. Proudfoot is the world's leading operations management consulting firm.

Only 11% of Canadian firms are experiencing productivity gains of 15% or more ('high performers') compared to 22% of companies internationally. As well, Canadian managers say they could increase productivity by 13% over the next two years, but expect to achieve gains of only 8% -- leaving 42% of potential productivity gains on the table.

"This less-than-stellar performance in Canada can be attributed to a number of factors, including the low level of relevant training for both staff and managers, the slower speed of decision-making, and problems with internal communications in Canadian organizations," said Jon Wylie, Proudfoot's Managing Director in Canada.

While Canadian companies identify a skills shortage as the number-one roadblock to efficiency improvements, at the same time they provide one of the lowest levels of training. Canadian workers receive an average of 8 days of training per year, the second lowest level of the 12 markets surveyed and 25% below the global norm. Not only that, but the usefulness of the training is questionable as only 55% of managers in this country say training needs within their company are formally and regularly assessed - the lowest score in the study.

"If the labour pool lacks the necessary skills, it is incumbent on companies to train and develop the required skills in order to be successful. This is one area where Canada falls short," noted Wylie.

Interestingly, Canadian managers also cite high staff turnover and low workplace morale as significant problems. "Recruitment, retention, and morale are closely linked to effective training and internal communications," Wylie explained. According to the report, Canadian managers are more likely than managers anywhere else to say staff turnover rates will get worse in the next 12 months.

Canada ranks second to last in terms of the ease with which information flows within companies. This inefficiency may indicate unnecessary bureaucracy, and is a major contributing factor to the slow speed of corporate decision-making in this country. Only 63% of Canadian managers report that decisions are made quickly in their companies - putting Canada well back in ninth position.

The good news is that Canadians are open to change. According to the study, only 7% of Canadian managers identify a lack of desire of the general workforce to adopt change programs as a barrier to productivity. This level is lower than all other countries studied. Similarly, only 5% of Canadian managers see a similar lack of desire to implement change among senior management.

"Enhanced productivity is critical if we want to continue to attract investment, grow our businesses and our economy, and provide a level of employment and a standard of living that Canadians want. Currently, we're losing ground. We simply have to learn how to run faster in order to keep up," Wylie said.