Canadian small and medium-sized businesses remain broadly optimistic about the next six months but are taking a more selective approach to hiring and investment amid economic uncertainty, according to a new survey from Employment Hero.
The inaugural Employment Hero SME Pulse found 58 per cent of 600 Canadian senior business leaders surveyed are optimistic about their business outlook over the next six months, compared with 18 per cent who are pessimistic.
Hiring remains a priority, with 66 per cent of respondents expecting to add employees in some capacity. However, businesses appear to be taking a more measured approach to workforce growth, with 34 per cent expecting to expand hiring and 32 per cent planning to hire selectively.
“Canadian SMEs are entering the second half of the year from a position of cautious confidence,” said Chris Pinkerton, managing director of Employment Hero Canada. “Businesses haven’t stopped investing – they’re simply becoming much more intentional about where they invest. That means hiring strategically, improving productivity and looking for smarter ways to grow.”
Technology is also drawing increased investment, with 62 per cent of Canadian SMEs reporting that they are increasing their spending on artificial intelligence.
The survey suggests businesses are increasingly looking at AI as a tool for day-to-day operations rather than simply experimenting with the technology, with productivity and efficiency among the stated priorities.
“The conversation around AI has shifted,” added Pinkerton. “Businesses are no longer asking whether they should invest, they’re asking how they can use AI to help existing teams work smarter, improve productivity and remain competitive in an increasingly challenging operating environment.”
Productivity was identified as the leading business pressure among respondents, cited by 41 per cent. Wages followed at 39 per cent, while hiring and talent acquisition was cited by 36 per cent.
The findings indicate that businesses are weighing workforce and technology investments against those operating pressures as they plan for the next six months.
Longer-term growth also remains a focus. Twenty-six per cent of SMEs surveyed said expansion or growth is their primary financial focus over the next six months, while 41 per cent said they are focused on balancing growth with operational stability.
Employment Hero said the survey points to Canadian SMEs continuing to pursue growth while exercising greater discipline around hiring, investment and workforce planning as they enter the fall period.
In an interview with Retail Insider, Pinkerton discussed the survey results.
Question: What does the survey data tell you about how Canadian SMEs are balancing hiring plans with concerns about wages, productivity and the broader economic outlook?
Answer: Canadian SMEs are still looking to grow, but they are being much more deliberate about how they do it. What stands out to me is that optimism is still there, hiring is still on the table, but businesses are making more careful decisions about where they invest their time and money. When productivity, wages and hiring all sit near the top of the pressure list, it tells you leaders are trying to balance growth with discipline as they head into fall.
Q: With 62% of SMEs increasing their AI investment, what specific uses of AI are you seeing among Canadian businesses, and are those investments changing the types or number of employees they plan to hire?
A: What we are seeing is that AI is becoming part of how SMEs think about productivity and efficiency, not just a standalone technology conversation. For many businesses, the focus is on helping existing teams work smarter and reducing pressure on day-to-day operations. For example, a Canadian SME might use AI to summarize customer inquiries, draft routine responses, or turn meeting notes into follow-up tasks, freeing employees to spend more time on higher-value work. The survey shows that more businesses are increasing AI investment even as many still expect to hire, which suggests AI is shaping how they plan and prioritize, rather than simply replacing the need for people.
Q: Why has productivity emerged as the top business pressure for SMEs, and what are companies doing differently to address it heading into the fall?
A: Productivity is front and centre because SMEs are being asked to do more in a more cautious environment. Businesses are looking closely at how to support growth, manage wage pressure and hire strategically without overextending themselves. Heading into fall, that means more intentional hiring, more interest in AI, a sharper focus on operational efficiency and getting the most out of the teams they already have.
Q: The survey describes businesses as “more intentional” about where they invest. What does that look like in practice when it comes to hiring, technology spending and expansion?
A: In practice, it means businesses are being very selective. They are still optimistic, and many still plan to hire, but they are not taking a growth-at-all-costs approach. They are thinking more carefully about where headcount is needed, where technology can help improve efficiency, and where they can keep growing while maintaining operational stability. That kind of discipline is especially important for SMEs, because they do not always have the same room for error as larger organizations.
Q: How do you expect the retail and consumer-facing SME sector in particular to approach hiring and AI investment through the fall, given the pressures on wages, productivity and consumer spending?
A: My view is that retail businesses are taking a practical and selective approach to fall planning. Consumer-facing businesses feel changes in demand, staffing, and costs quickly, so I’d expect many to prioritize flexibility and be thoughtful about where they invest.
Our recent pulse check survey found that SMEs will continue hiring where there is a clear business need, while also looking for ways to improve productivity and get more from existing teams. AI is increasingly central to that conversation. Statistics Canada reports that 19.2% of Canadian businesses used AI in the past 12 months as of Q2 2026, while our research found that 62% of SMEs are increasing their investment in AI. The next challenge is turning that investment into results, with AI literacy emerging as a key unlock for driving adoption and realizing real productivity gains.
As we enter Q4, I see the theme as selective investment. Using technology where it delivers a clear productivity benefit, switching to vendors that can provide a technology and AI advantage, and staying flexible as demand changes.
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