Businesses facing supply chain difficulties increase retail costs
Canadian small businesses report facing a variety of operational challenges over the last year including supply chain disruptions, the national labour shortage, and increased cybersecurity risks. A new study from software solution provider Capterra found that 78 percent of small and medium-sized enterprises facing supply chain issues have already, or plan to, increase retail costs to offset rising expenses caused by supply chain disruptions.
Other highlights from Capterra’s Business Disruptions Survey include:
- 76% of product-selling companies have experienced supply chain disruptions over the last year
- 50% of managers struggling to hire are increasing salary offerings to attract new hires amid the labour shortage
- The majority of Canadian small and medium-sized enterprises have implemented digital solutions, such as antivirus software, to combat growing cybersecurity risks
- 19% of managers said that their company is not investing enough in business growth.
When asked about the most disruptive consequences of supply chain breakdown, 23 percent of respondents said they incurred a lack of sufficient inventory. Following this, 22 percent said they had to pay higher direct costs to suppliers, while an inability to meet customer demand and problems managing excess inventory were cited by 19 percent and nine percent of respondents respectively.
Canada’s labour shortage is having a direct impact on all aspects of business, Capterra’s research finds. Employees are experiencing higher workloads, and companies are suffering from declines in revenue and business plan disruptions.
In order to attract new hires, affected respondents have been testing a range of solutions, including: increasing salary offerings (50 percent), considering candidates outside of the job specifications (35 percent), and offering better benefits to candidates (32 percent), among others.
Fewer than a third (31 percent) of Canadian managers are confident that they currently face no cybersecurity challenges. Anti-virus software is deployed by 67 percent of respondents, followed by firewall software (56 percent) and data backup tools (51 percent).
However, the majority (69 percent) are reportedly aware of at least one cyber threat in their business. In 2022, 36 percent of Canadian small businesses have experienced an email-related attack, while 12 percent have had accounts hacked. Ransomware attacks are the least common cyber threat according to the research, with just eight percent of companies having experienced one in the last 12 months.
“Many of the business disruptions we see Canadian SMEs struggle with have been unpredictable, starting with the pandemic,” said Tessa Anaya, analyst for this study. “The best strategy is to incorporate risk management strategies and business continuity plans to mitigate disruptive effects. We see many companies turning to digital tools to protect their operations, as well as to help them carry out the creative strategies they need to move past market-wide bottlenecks.”
The survey of 500 local managers took place between August and September 2022.