National Enterprise Leader, KPMG in Canada
CanadianSME sat down with Mary Jo Fedy, National Enterprise Leader, KPMG in Canada, earlier this year to discuss how it is important for small and medium-sized businesses to realize and invest in the latest digital innovations to better weather economic conditions while beautifully balancing investments in their overall infrastructure. She also shared some of the strategies that businesses can implement in order to mitigate cyber threats today since there is an increase in digitization. We also talked about the shortage of skilled labour which is turning a kind of risk to recovery, and how businesses can address this shortage. Finally, we talked about how business leaders and entrepreneurs can make their businesses thrive amidst the pandemic and beyond. Together, we explore Mary’s vision and strategies to better the present condition, ensuring robust growth.
Mary Jo Fedy proudly holds the role of National Enterprise Leader of KPMG in Canada. She has more than 35 years of experience serving privately held Canadian companies and owner-managed businesses. Mary Jo provides proactive, hands-on service to address her clients’ needs, which include financing, budgeting, strategic and succession planning, attestation services, tax planning, and tax compliance. For more information, visit home.kpmg/ca/enterprise or email firstname.lastname@example.org
Heading into the third year of the COVID-19 pandemic, what are you hearing from small- to medium-sized businesses across Canada?
If there is a silver lining to the pandemic on the business front, it’s that many Canadian small- to medium-sized businesses proved their resilience. Although there were many challenges, it was inspiring to see and work with businesses that adapted and innovated. This positive momentum continues today, as we are hopefully nearing the finish line of the pandemic.
What I am hearing from my clients echoes what more than 500 businesses across Canada told KPMG Enterprise in our recent poll: Business leaders remain optimistic for the future, with the vast majority (nine in 10) expressing confidence in their company’s growth prospects.
Of course, this optimism comes with concerns. Across sectors, businesses are faced with labour shortages and higher costs, as well as headwinds from the ongoing supply chain disruptions being felt around the world.
Digital transformation continues to be top of mind for businesses. In our poll, most business leaders (89 percent) indicated they must invest quickly in digital operations. However, skilled labour shortages remain a challenge. While the majority of businesses are looking to add to their headcount, 68 percent are struggling to hire people with the right skill sets—namely digital—to achieve growth.
How can businesses continue to invest in digital innovations to better weather economic storms while balancing investments in their infrastructure?
It’s no surprise that many small- and medium-sized businesses had to pivot during the pandemic and focus on digital innovations to unlock new business opportunities and revenue streams. However, successful digital initiatives can require a fair amount of resources—both financial and human.
Finding a balance between digital and other investments today is a challenge.
The appetite for government support remains strong. In our survey, 82 percent of business leaders believe their industry is in “for a major shakeup” and will require government support for them to invest in emerging and clean technologies. They also want measures that will support innovation and growth amid the latest risks to a global economy already struggling with rising inflation and supply chain issues.
We also found that 91 percent of business leaders believe businesses need more tax incentives/credits for investments in innovation; digital transformation; and research and development, such as software, automation, or patents, example.
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As digitization has increased, cyber-attacks have also accelerated. What can businesses do to better manage cyber risks?
As business leaders are well aware, cybersecurity incidents can result in the disruption of business operations and cause severe financial and reputational damage. In KPMG’s 2021 CEO Outlook, 94 percent of small- and medium-sized Canadian companies said they closely monitor for potential cyber-attacks, yet only 39 percent are “very confident” in their ability to detect and respond to an attack.
To mitigate risks, businesses need a robust cybersecurity strategy that is aligned with their objectives and risk priorities. While no two cybersecurity strategies are alike, all facets of cybersecurity—from preventing attacks to responding to them in the event they do occur to recovering from an incident—require a plan.
When implemented effectively, a strong cybersecurity strategy enhances product integrity, customer experience, operations, brand reputation, investor confidence, and more.Mary Jo Fedy – A Leader in Its Truest Sense Click To Tweet
Skilled labour shortages continue to represent a risk to recovery. How can businesses address this shortage?
Businesses increasingly require more employees with digital skills, especially in cybersecurity and data analytics. However, that is a challenge given today’s tight talent pool. Many businesses are considering recruiting outside of Canada, which presents a range of tax implications. To attract and retain great talent, businesses will need to meet employees’ evolving needs—for example, flexibility, inclusivity, and a sense of purpose—by adopting hybrid work models and addressing climate, equity and diversity issues.
Given the rising awareness of environmental, social and governance issues (ESG), stakeholders are expecting businesses to take action. Customers want organizations to take the lead on societal challenges such as racial and gender equality and climate change. Employees also expect their employers to tackle these issues, and it has become a baseline expectation for talent that companies are trying to attract and retain. Investors are demanding a commitment, a plan, and a measurement of outcomes, and leaders expect that banks will start to insert loan covenants related to climate change.
Organizations are listening to their stakeholders and addressing these issues. The pandemic and other recent events have increased business commitment to making a difference on social and environmental issues, and it’s important to ensure the workforce, too, is diverse.
The pandemic exposed many vulnerabilities in global and domestic supply chains. What can business leaders do to continue to grow their business amidst ongoing disruptions to supply chains?
The current supply chain disruption is on a scale most supply chain leaders have never experienced before. Canadian business leaders say they would source domestic supply if they could, but it’s not available. However, many are hopeful that over the next three years this will change and they will be able to source more product inputs within Canada to avoid supply chain disruptions and improve their operational resiliency.
The intention of Canadian companies to source more product inputs within Canada creates an opportunity for Canadian businesses and could bode well for future business investment.
About KPMG Enterprise
KPMG Enterprise is a dedicated audit, tax, advisory and law practice focused on supporting entrepreneurs, family businesses, not-for-profit organizations, privately held companies, and high net worth individuals and families. We are always looking at the big picture so we can strive to deliver ideas, provide insights and create opportunities to help businesses become even better.