Majority of businesses looking to increase hiring in 2015
Toronto - Revenues are up and growth is top of mind for mid-sized Canadian companies over the next year according to the American Express Multinational Survey of Mid-sized Companies. The annual survey, revealed an overwhelming sentiment that the economy will positively impact business prospects over the next year. A nearly unanimous group of financial decision-makers surveyed (99%) say their companies are planning to grow their business, and of those, 42 per cent say growth is their top priority over the next 12 months. This increased focus on growth also comes after 57 per cent reported already seeing a rise in revenues compared to last year.
Furthermore, the survey results disclosed 37 per cent of mid-sized companies are looking to acquire new customers as their number one strategy to achieving this growth. When asked how they will acquire these new customers, 30 per cent stated it would be through introducing new products or services.
"Mid-sized companies continue to move through 2015 with confidence, likely a result of their steady increase in revenues since 2014," said Paul Parisi, Vice President & General Manager, Global Corporate Payments, American Express Canada. "Not surprisingly, there is an extreme push towards growth in the wake of their success and companies are moving full steam ahead with a desire to expand product offerings."
Concern over cash flow
Despite confidence levels regarding revenue, almost a quarter of companies (23%) admit their biggest challenge while continuing to grow is managing the rising costs of doing business. With the Canadian dollar's persistent drop, and considering it hasn't been above parity with the U.S. dollar since February 2013, it's clear mid-sized business owners are dealing with an increase in expenses.
Just under a quarter (24%) are concerned about not having enough cash flow on-hand to win new business - an increase of five percentage points over last year (19%). Another 19 per cent reported concern over the ability to accurately track cash flow for their business. Overall, 19 per cent note that managing cash flow is their single most important priority.
"Expense management really stood out as a clear area of concern for these business owners," says Parisi. "They are looking to take strategic measures to better handle cash flow so it doesn't get in the way of their desired growth trajectory."
Tapping international markets
Businesses aren't limiting themselves geographically when it comes to generating growth. Over three quarters (78%) of mid-sized companies admit to tapping international markets. Almost half (48%) are doing so primarily as a way to acquire new customers. Additional reasons include:
• Obtain new suppliers for products/services (34%)
• Save on costs (31%)
• Manufacture products/services (26%)
The top three markets where mid-sized companies are looking to enter in the future are China (20%), United States (18%) and Mexico (11%).
Hiring remains top of mind
With a growth in revenue often comes a need to boost staff. The majority of mid-sized businesses (85%) have plans to hire this year with over a third (38%) saying they are hiring full time and 13 per cent hiring for part time. Over half (61%) of mid-sized companies who are planning to hire staff report a need to hire in order to support business volume, compared to 47 per cent last year. Additional reasons for hiring include:
• New business venture (30%)
• Company finally finding the right candidate/positions that they have been trying to fill for some time (21%)
• Seasonal help (19%)
Almost half (48%) also stated turnover at the organization is steady, but not a concern as they continue to retain high performers. Over a quarter (30%) attributed employee retention to mission and culture an increase of nine percentage points compared to last year (21%).
On average, the companies surveyed in Canada have been in business 36 years and employ 2,000 people. More than three-quarters (77%) are privately-owned with over a quarter being either founder or majority-owned (28%) or partner-owned (26%). Of the Canadian companies surveyed, the mean revenue reported was $223.7 million CDN in the last fiscal year.