Canadian SMBs Face HR Challenges

- According to a Folks HR report, 60% of Canadian organizations have identified company culture as a top priority for 2026, and 56% are prioritizing professional development to improve retention. - The average cost of employee turnover has risen to $30,680, with 28% of all hiring managers anticipating an increase in turnover this year. For larger companies with 100 or more employees, that number jumps to 37%. - While many SMBs are adopting AI, with 71% now using it in their operations, only a small fraction are seeing a return on their investment so far. A significant 80% of Canadian businesses, however, agree that keeping a human in the loop is important when using AI. - There is a notable gap in AI readiness, as 75% of large companies and 61% of mid-sized companies view it as essential for competitiveness, yet only 13% and 5%, respectively, are prioritizing hiring for AI skills. - Looking ahead, 34% of Canadian employees plan to search for a new job in 2026, a notable increase from the previous year. - Employee well-being is a growing concern, with only a quarter of global employees feeling appreciated at work in 2025. Those who do not feel appreciated are more than twice as likely to plan on leaving their jobs. - Work-life balance has become a primary driver for job seekers, with 83% of workers stating it is a top priority, surpassing compensation for the first time in 22 years of tracking. - Many employers are struggling to optimize their HR processes, as less than half rate their onboarding and hiring as highly efficient. This comes at a time when a competitive job market is cited by 29% of employers as a key reason for expected turnover.