Supporting adaptability for small and medium-sized enterprises
Small and medium-sized enterprises (SMEs) power the majority of Canada’s workforce and are vital to local economies. Yet they face growing challenges in adapting to rapid technological, demographic and environmental change. Limited human resource capacity, financial constraints, and competing operational priorities often make it difficult for SMEs to invest in workforce training, or plan for long-term transformation.
When employers struggle, workers feel it too
These constraints also impact workers too. Without access to ongoing training and development, many SME employees risk falling behind as new tools and technologies reshape jobs. Smaller firms’ limited HR capacity can also create barriers to more inclusive workplaces, particularly for equity-seeking groups such as women, newcomers, Indigenous and racialized workers, LGBTQ2S+ workers, and workers with disabilities.
A deepening skills gap
As Canada confronts economic uncertainty, automation, and a wave of retirements, skills shortages are widening across sectors. Despite the central role of skills in driving productivity, SME-focused training and workforce development remain underfunded and fragmented compared to other priorities such as financing, innovation, and export development. Better coordination between skills development and broader economic objectives is needed to improve the effectiveness of government programs supporting SMEs.
Key Insights
SMEs accounted for 99.6% of employer businesses in Canada as of December 2023, with small enterprises alone making up 98.1%.
Canadian firms invest an estimated $240 per employee annually, lagging behind other OECD countries.
Only three percent of the smallest Canadian firms (5 - 19 employees) had adopted AI as of 2021, compared to 20 percent of firms with 100 or more employees.
Are Canadian employers providing skills training opportunities?
How mid-career workers are supported to upskill
How can SMEs manage their skills needs in a post-pandemic labour market?
Highlights of our impact
We are working with partners across Canada to test innovative, scalable approaches that lower time and cost barriers, and drive greater investment in training and employee development. Our work is uncovering solutions that are helping smaller firms adapt to change, build capacity and seize new opportunities for growth.
Using evidence to drive change
Our State of Skills report series brings together lessons from across our network — highlighting the innovative approaches, partnerships, and insights helping workers and businesses succeed through change.
Key questions we’re investigating
- How can effective approaches to investment in training and HR for SMEs be scaled up to become sustainable?
- What are the best approaches or tools to help SMEs assess and recognize skills in the labour market?
- How do SMEs in Canada make decisions around investment in skills and human resources development, including those who have high levels of investment?
- Under what conditions do digital platforms for training, recruitment and skills assessment encourage investment by SMEs?
Learn more about our projects and research on SME Adaptability
Environmental, Social, Governance Disclosure: SMEs and the Transition to Net Zero
Bridging the AI Skills Gap in Small and Medium-Sized Organizations in Canada
