Recently, it seems the Canadian economic outlook is far from ideal. But what does it mean for the country's biggest businesses? What are companies focused on in 2016 and beyond? What strategies are they employing to set up their organizations for long-term success, and how will these new priorities impact Canada's workforce?
To find answers to these questions and more, the ninth annual American Express/CFO Research Global Business & Spending Monitor surveyed senior finance executives at companies with annual revenues of $500 million or more located in Canada and around the globe. According to Canadian executives, here are some ways they plan to optimize operations in the year ahead:
Increased focus on domestic markets
Canadian businesses mostly have guarded optimism about their prospects for growth, with 63 per cent of CFOs still predicting economic expansion over the next twelve months; that's a slight drop from the 73 per cent reported last year. While more than half of the executives (55 per cent) reported their revenues as higher than a year ago, it seems as if economic uncertainty is motivating many companies (47 per cent) to reduce exposure and take an increased focus on domestic markets.
Look inward for optimization
Many companies are using 2016 to ensure their business processes are solid. Canadian CFOs might not be quite as optimistic as recent years, but they remain laser-focused on making targeted investments in their most important business lines.
For instance, compared to last year, companies plan to invest less in mergers and acquisitions (36 per cent) while spending more on sales and marketing activities (34 per cent), adding capacity for production or service delivery (24 per cent) and improving business and intelligence (23 per cent). Showing they're focused on the future, almost a third of CFOs also plan to increase spending on mobile technology.
More controlled spending
As a country, it's clear we're tightening our belts in 2016 as Canada saw a 30 per cent jump -- the largest global increase -- in the number of CFOs reporting tightly controlled spending and investment in an effort to preserve profitability and position themselves for future growth.
Bigger push to optimize cash flow
In 2015, 70 per cent of CFOs reported the availability of capital as the top factor accelerating growth, but that number sagged to only 40 per cent this year.
With less available capital, two-thirds (66 per cent) of CFOs reported that optimizing cash flow will be more important in 2016 than it was last year as Canadian companies look to obtain the necessary funding to secure and/or grow their business.
Seventy per cent of Canadian businesses plan to make greater use of temporary or contract workers in 2016, and almost two-thirds (60 per cent) of CFOs said that they expect non full-time employees to be central to, or an important part of, their business over the next two years.
Conversely, in the year ahead, half of companies also expect to offer flexible work schedules in order to attract and retain talent. A necessary move considering the majority of Canadian CFOs said they struggled to hire skilled or specialized workers and fill management positions this year, affecting their ability to meet performance goals.
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