To say it’s been a challenging few years would be an understatement. The Covid-19 pandemic has upended all aspects of life, in all corners of the world. Businesses across the country have been faced with unprecedented challenges, and many have proven their resiliency multiple times over to make it through to today.
While we may be starting to see light at the end of the pandemic tunnel, continued supply chain challenges, labour shortages, climate events and employee morale issues will be pain points felt by businesses for years to come.
Canadian businesses appear to recognize this and are taking a closer look at shoring up operations closer to home in the short-term. But in doing so, are they at risk of falling behind their global counterparts?
We’ve recently released our new 2021 HSBC Navigator: The Voice of Business report, and the findings for Canada suggest that many businesses may be losing sight of long-term opportunities as they attempt to grapple with the continued fallout of the Covid-19 pandemic.
Just over half (56%) of the more than 500 Canadian business leaders and influencers polled say they are feeling more optimistic about their growth prospects today than they were at this time last year – significantly lower than the global average of 64%. They expect it will be another year – November 2022 – before they return to pre-Covid levels of profitability.
“The findings in this year’s Navigator report tell us that we may not be as far along in our recovery from the worst of the pandemic as we would like to believe,” says Alan Turner, Head of Commercial Banking, HSBC Canada. “For Canadian businesses, that means that we need to do what we can to improve things at home. However, if we do that at the expense of risking future opportunities abroad, we may find ourselves falling behind our global counterparts in the post-pandemic economy.”
“The next twelve months will be a delicate balancing act for Canadian businesses between improving our operations here at home, and planning to capitalize on opportunity in other markets,” adds Turner.
The 2021 HSBC Navigator: The Voice of Business report also revealed a number of important insights on high-priority areas for Canadian businesses, including sustainability, trade, talent and tech.
Sustainability : Canada has long been viewed as a leader in sustainable business practice, but the pandemic may be turning Canadian businesses into climate skeptics. More than one-in-ten (11%) businesses in Canada say they believe global climate pacts and accords will have zero effect on making meaningful impacts in the fight against climate change. And while 39% of global companies say climate meetings like the recent COP26 are crucial to driving policy and action, only 27% of Canadian businesses say the same.
Trade : With 14 free trade deals signed, granting access to more than 50 nations, 1.5 billion consumers and 60% of the world’s GDP, Canadian businesses have a world of opportunity when it comes to trade. However, less than a third (29%) of Canadian businesses say they’ve increased the number or international suppliers they work with in the past year (global average: 36%), and only one-in-10 (12%) say they expect international trade to become easier next year (global average: 20%).
Talent and Tech : While a resurgence of Covid-19 (43%) is seen as the biggest threat for Canadian businesses over the coming year, nearly a third (28%) say low employee morale could have a significant negative impact on growth prospects in the future. To try and counteract this, more than a third (38%) of business leaders and influencers say they’re investing in technology and digital tools to try to help keep their remote workforce together, with nearly as many (32%) putting more resources into upskilling and training their teams.
As the fallout from the pandemic persists, Canadian businesses will continue to be forced to make difficult decisions on whether to focus efforts and resources at home or abroad being one of them.
The decisions made today could have long-term impacts for those same businesses and their employers, so it’s critical they are made strategically. Working with strong partners that understand their business, and can bring both a local and global focus to meaningful decision making in the short-term, can help Canadian businesses ensure they are able to manage and overcome the challenges of today without losing sight of their long-term opportunities.
Find out more from the 2021 HSBC Navigator.
Trying to decide whether to double-down at home, or charge forward abroad? Contact HSBC today.