Recent productivity gains only 'scratching the surface' of what new technology can deliver
TORONTO, June 6, 2025 /CNW/ - While Canadian companies have been making technology investments to improve productivity, insufficient investments in their people have limited effectiveness and held back productivity gains, finds new KPMG in Canada research.
KPMG recently surveyed 250 business leaders across Canada to understand what actions they were taking to improve their operations in response to the trade war with the U.S. The results found that most had stepped up investments in technology to make their organizations more efficient and productive – and are seeing positive returns – but nearly two-thirds (63 per cent) say their employees aren't using new technologies effectively – holding back full returns on their tech spend.
"Investing in new technology tools and platforms can do wonders for an organization's productivity by streamlining processes, workflows and tasks," says Stavros Demetriou, Partner and National Leader of KPMG in Canada's People and Change practice. "The latest Stats Can data shows Canada has made productivity gains in each of the last two quarters, but this increase still trails improvements in the U.S. over the same period.
"Unless Canadian organizations undertake effective employee education and adoption plans, their people will barely scratch the surface on what the technology can do to make them more productive, and our gap to the U.S. and others will continue to widen."
Although nearly all (89 per cent) respondents say they're investing in upskilling employees, over half (53 per cent) say their company doesn't invest enough in employee training, workshops or continuous learning opportunities, and nearly six in 10 (56 per cent) say their organization lacks the internal resources and talent needed to implement and use technology effectively.
Survey highlights
- 63 per cent of 250 Canadian business leaders say technology isn't the productivity problem, their employees just aren't using technology effectively
- 89 per cent say they're investing in upskilling employees
- 53 per cent say their organization doesn't invest enough in employee training, workshops or continuous learning opportunities
- 56 per cent say their organization lacks the internal resources and talent needed to implement and use technology effectively
- 74 per cent of respondents believe AI will solve their productivity challenges
- 74 per cent say they underestimated the challenges of digitization (e.g., changing processes, working habits, etc.)
- 88 per cent say they need better processes in place to encourage their workers to use technologies, including case studies and incentives
- 87 per cent say their company could do a better job of creating a culture that encourages people to share ideas and take risks, fostering innovation and creativity.
- 86 per cent say they hope that more digital savvy younger generations will help our company become more productive through the easier adoption of new technologies
Mr. Demetriou notes that while three-quarters (74 per cent) of respondents believe AI will solve their productivity problem, the same proportion (74 per cent) admit they have underestimated the challenges of implementing new technologies such as AI. "An underappreciation of the impact of things like changing processes and working habits could explain why employees are not fully equipped to harness new technologies to their fullest potential," he says.
"There's a common belief that digitally transforming your company is primarily a technology upgrade exercise, but the reality is that technology implementation is just one part of a journey – digital transformation is just as much about advancing and elevating the workforce. It's a continuous, iterative process that, if done correctly, leads to higher productivity and innovation, and the ability to navigate the future more confidently," he adds.
Ineffective training
Megan Jones, National HR and Workforce Transformation Lead at KPMG in Canada, notes that nearly nine in 10 respondents say they need better processes in place to encourage their workers to use technologies, including case studies and incentives.
"Often, when organizations implement new tools and technologies, they don't completely understand or appreciate the full capabilities of these investments. As a result, employees are simply not adequately prepared to maximize the benefits these can bring to their jobs or customers. In some cases, organizations provide full training, but it's too technical or poorly delivered. Effective training and upskilling need to be targeted, relevant, engaging, and frequent. Much like exercising consistently to build muscle, technology training must happen regularly to make the workforce stronger and more agile," she says.
Ms. Jones notes that almost nine in 10 (87 per cent) respondents acknowledged their company could do a better job of creating a culture that encourages employees to share ideas and take risks, fostering innovation and creativity.
She recommends organizations provide incentives for employees to experiment with technology and explore new use cases for it. "Regular workshops or dedicated 'days' where employees are encouraged to play around with AI and develop new solutions can go a long way in sparking innovation. Also, showcasing wins by employees in one area of the business could help spark new ideas in other parts of the organization," she says.
The digital divide
Most respondents (86 per cent) hope that a more digitally-savvy younger generation will help their company become more productive through the easier adoption of new technologies such as AI, Web3, data and analytics, quantum and edge computing.
Lewis Curley, a Partner in KPMG in Canada's People and Change practice, says differences in workforce composition, skills and attitudes can create additional considerations for an organization's technology program, but organizations that engage all employees early in the journey as well as training and upskilling will have more success in leveraging new technologies such as AI and increasing overall productivity.
"If an organization is looking to implement AI, they must engage the entire workforce right from the beginning. If some employees don't feel like they are part of the journey, they might disengage from the process, lose trust in AI, or worry that the technology will replace them, which could deter them from using it," he says.
"Everyone has a role in a company's digital transformation, and every single employee – from the CEO to the most recent hire – plays a part in making their organization more productive, so transparency, communication and engagement are crucial."
About the KPMG in Canada Productivity Survey
KPMG in Canada surveyed 250 business leaders in all industry sectors across Canada between May 9 and May 20, 2025, on Sago's premier business panel, using Methodify's online research platform. Thirty-one per cent lead companies with annual gross revenue between $500 million and $1 billion, 25 per cent report revenue between $100 million and $300 million, 22 per cent have revenue between $300 million and $500 million, 12 per cent between $10 million and $100 million, and 10 per cent, over $1 billion. No companies under $10 million in annual revenue were surveyed. Over half (52 per cent) of the companies are privately held, 28 per cent are owned by private equity firms, 18 per cent are publicly traded with headquarters in Canada, and 2 per cent are foreign-owned subsidiaries.
About KPMG in Canada
KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country.
The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca
For media inquiries:
Alannah Page
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KPMG in Canada
306-934-6255
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Roula Meditskos
National Communications and Media Relations
KPMG in Canada
416-549-7982
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SOURCE KPMG LLP
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